Babiah Weaker Section & Waddera Labour Contract Co-op Society ltd, Hyd, Hyderabad V. ITO Ward 11(1), Hyderabad

ITA 1023/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59085 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: T SRINIVASA MURTHY
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1023/HYD/2011 ASSESSMENT YEAR 2006-2007 BABAIAH WEAKER SECTION & WADDERA LABOUR CONTRACT COOPERATIVE SOCIETY LTD. HYDERABAD PAN AAEFB2283L VS. INCOME TAX OFFICER WARD 11(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. T. SRINIVASA MURTHY FOR REVENUE : SMT. K. HARITHA DATE OF HEARING : 16.04.2014 DATE OF PRONOUNCEMENT : 17.04.2014 ORDER PER B.R. BASKARAN, A.M. THE APPEAL FILED BY THE ASSESSEE IS DIREC TED AGAINST THE ORDER DATED 31.01.2011 PASSED BY LD CIT (A)-VI, HYDERABAD AND IT PERTAINS TO THE A.Y. 2006-2007. TH E ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN C ONFIRMING THE ASSESSMENT MADE BY THE A.O. 2. THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE ASSESSEE IS A COOPERATIVE SOCIETY FORMED BY DAI LY WAGE EARNERS. IT FILED ITS RETURN OF INCOME DECLARING TO TAL INCOME AT RS.1,05,221/-. THE A.O. COMPLETED THE ASSESSMENT UN DER SECTION 144 OF THE ACT BY ESTIMATING INCOME AT 10% OF THE GROSS RECEIPTS DECLARED BY THE ASSESSEE. THE A.O. A LSO TOOK THE STATUS OF THE ASSESSEE AS PARTNERSHIP FIRM. 2 ITA.NO.1023/HYD/2011 BABAIAH WEAKER SECTION & WADDERA LABOUR CONTRACT CO.OP SOCIETY LTD. 3. IN THE APPEAL PROCEEDINGS BEFORE LD CIT(A), THE A.O. FURNISHED A REMAND REPORT WHEREIN HE EXPRESSED THE VIEW THAT THE ASSESSEE SHOULD NOT BE ASSESSED AS PARTNER SHIP FIRM. HE ALSO SUBMITTED THAT HE WAS CONSTRAINED TO TAKE T HE STATUS OF THE ASSESSEE AS PARTNERSHIP FIRM, SINCE THE PAN WAS ALLOTTED TO THE ASSESSEE IN THE STATUS OF PARTNERSHIP FIRM. ACCORDINGLY, THE LD. CIT(A) DIRECTED THE A.O. TO TREAT THE STATU S OF THE ASSESSEE AS SOCIETY. WITH REGARD TO INCOME ESTIM ATED BY THE ASSESSEE, LD. CIT(A) DIRECTED THE A.O. TO ESTIMATE THE INCOME AT 6% OF THE GROSS RECEIPTS. IT IS PERTINENT TO NOTE T HAT THE ASSESSEE SUBMITTED A CLAIM BEFORE THE CIT(A) SEEKIN G DEDUCTION UNDER SECTION 80P(2)(VI) OF THE I.T. ACT, 1961 ON T HE GROUND THAT THE ASSESSEE FALLS IN THE CATEGORY OF A SOCIE TY ENGAGED IN THE COLLECTIVE DISPOSAL OF LABOUR. IN THE REMAND RE PORT, THE A.O. HAD EXPRESSED THE VIEW THAT THE ASSESSEE CANNO T BE CONSIDERED AS SOCIETY ENGAGED FOR THE COLLECTIVE DI SPOSAL OF LABOUR, SINCE IT HAS UNDERTAKEN NORMAL CIVIL CONTRA CT WORKS. THE LD. CIT(A) ACCEPTED THE VIEW EXPRESSED BY THE A .O. AND ACCORDINGLY, REJECTED THE CLAIM FOR DEDUCTION UNDER SECTION 80P OF THE ACT. AGGRIEVED, ASSESSEE HAS FILED THIS APP EAL BEFORE US. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MEMBERS OF THE SOCIETY ARE ILLITERATE PERSONS A ND HAVE NO KNOWLEDGE ABOUT THE PROVISIONS OF THE ACT RELATING TO EXEMPTION. HENCE, THEY FILED THE RETURN OF INCOME W ITHOUT CLAIMING DEDUCTION UNDER SECTION 80P OF THE ACT. HE FURTHER SUBMITTED THAT THE PAN NUMBER WAS ALLOTTED TO THE A SSESSEE IN THE STATUS OF PARTNERSHIP FIRM, EVEN THOUGH IT IS A COOPERATIVE SOCIETY. THE LD. COUNSEL SUBMITTED THAT THE ASSESS EE COULD NOT PROPERLY PUT ITS CASE FOR CLAIMING DEDUCTION UN DER SECTION 3 ITA.NO.1023/HYD/2011 BABAIAH WEAKER SECTION & WADDERA LABOUR CONTRACT CO.OP SOCIETY LTD. 80P OF THE ACT EVEN BEFORE THE LD. CIT(A). HE SUBM ITTED THAT THE ASSESSEE SOCIETY FALLS IN THE CATEGORY OF SOCIE TY ENGAGED IN COLLECTIVE DISPOSAL OF LABOUR, SINCE THE MEMBERS TH EMSELVES ARE EXECUTING THE CIVIL CONTRACT WORKS. ACCORDINGLY, HE SUBMITTED THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80P OF THE ACT AND ACCORDINGLY PRAYED THAT THE MATTER MAY BE SET A SIDE TO THE FILE OF A.O. FOR FRAMING THE ASSESSMENT AFRESH BY D ULY CONSIDERING THE CLAIMS PUT FORTH BY THE ASSESSEE. 4. WE HAVE HEARD THE LEARNED D.R. AND SHE DID NOT OBJECT TO THE PRAYER PUT FORTH BY THE LEARNED A.R. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. ADMITTEDLY, THE ASSESSEE HAS BEEN ASSES SED UNDER THE STATUS OF PARTNERSHIP FIRM. IT IS ALSO AN ADMIT TED FACT THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND HENCE, IT COULD NOT BE CONSIDERED AS PARTNERSHIP FIRM. WE ALSO NOTICE THAT THE ASSESSEE DID NOT CLAIM DEDUCTION UNDER SECTION 80P OF THE ACT IN THE RETURN OF INCOME FILED BEFORE THE A.O. AND T HE SAID CLAIM WAS PUT FORTH BEFORE THE CIT(A) IN THE APPELLATE PR OCEEDINGS. THOUGH THE A.O. AND LD. CIT(A) HAVE EXPRESSED THE V IEW THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SE CTION 80P OF THE ACT, YET LEARNED A.R. SUBMITTED THAT THE ASSESS EE WOULD BE IN A POSITION TO SUBSTANTIATE ITS CLAIM WITH SUPPOR TING MATERIAL AND CASE LAW, IF ONE MORE OPPORTUNITY IS GIVEN TO T HE ASSESSEE. LEARNED A.R. ALSO SUBMITTED THAT THE PRESENT SOCIET Y HAS BEEN FORMED BY ILLITERATE LABOURERS. CONSIDERING THE FAC TS OF THE CASE, WE ARE OF THE VIEW THAT, IN THE INTEREST OF N ATURAL JUSTICE, THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO SUBSTANTIATE ITS CLAIM FOR DEDUCTION UNDER SECTION 80P OF THE 4 ITA.NO.1023/HYD/2011 BABAIAH WEAKER SECTION & WADDERA LABOUR CONTRACT CO.OP SOCIETY LTD. ACT. FURTHER THE IMPUGNED ASSESSMENT HAS BEEN FRAM ED U/S 144 OF THE ACT AND FOR THAT REASON ALSO, THE ASSESS EE IS SEEKING ONE MORE OPPORTUNITY. ACCORDINGLY, WE SET ASIDE TH E ORDER OF THE LD. CIT(A) AND RESTORE ALL THE ISSUES TO THE FI LE OF THE A.O. WITH A DIRECTION TO FRAME FRESH ASSESSMENT BY CONSI DERING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 8 0P OF THE ACT AND ALSO ANY OTHER CLAIM THAT MAY BE PUT BEFORE HIM. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17.04.2014 SD/- SD/- (SAKTIJIT DEY) (B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 17 TH APRIL, 2014 VBP/- COPY TO : 1. BABAIAH WEAKER SECTION & WADDERA LABOUR CONTRACT COOPERATIVE SOCIETY LTD. 22-40, GIRI NAGAR, IDP L COLONY, QUTUBULLAPUR, HYDERABAD C/O. T. SRINIVAS MURTHY , ADVOCATE, 3-5-1107, 4 TH FLOOR, NARAYANGUDA, HYDERABAD 500 029. 2. ITO, WARD 11(1), HYDERABAD. 3. CIT(A)-VI, 6A, I.T. TOWERS, A.C. GUARDS, HYDERAB AD-500004. 4. CIT-V, HYDERABAD 5. D.R. ITAT, A BENCH, HYDERABAD.