ITO-20(3)(1) , MUMBAI V. THE K E M HOSPITAL & SETH GSM COLLEGE EMPLOYEES CO-OP CREDIT SOCIETY LTD, MUMBAI

ITA 103/MUM/2023

AI Insights

The case involves the Income Tax Department (Revenue) appealing against the decision of the Commissioner of Income Tax (Appeals) which allowed a deduction claimed by The KEM Hospital & Seth GSM College Employees Co Op Credit Society Ltd. under section 80P(2) of the Income Tax Act, 1961 for the Assessment Year 2017-18. The primary legal issue was whether the assessee, a co-operative credit society, could claim deductions under section 80P(2) despite the provisions of section 80P(4) which apply to primary co-operative banks. The Tribunal referenced its previous decisions and the consistent rulings in favor of the assessee for earlier assessment years, leading to the dismissal of the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136071 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 13-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 11-01-2023
• Other Referred Cases: ITA No.4986/Mum/2016, ITA No.6366/Mum/2019, ITA No.864/Mum/2017, ITA No.4552/Mum/2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Co-operative Credit Society

Judgement Text

म ु ंबई ठ “एच ”,म ु ंबई , ए ं ए . ! "# हम न, ेख े म( IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ H ”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER& SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ं.103/म ु ं/2023 ( न. . 2017-18) ITA NO.103/MUM/2023(A.Y.2017-18) The ITO 20(3)(1),Mumbai, Room No.622, 6 th Floor, Piramal Chamber, Lal Baug, Mumbai – 400 012 ...... ./Appellant बन म Vs. The KEM Hospital & Seth GSM College Employees Co Op Credit Society Ltd., Ground Floor, Old Building, KEM Hospital, Parel, Mumbai 400 012. PAN: AAAAT-5055-H ...../ 0 /Respondent . 1 / Appellant by : Smt. Sujatha Iyangar / 0 1 /Respondent by : None ु न ई 2 0 / Date of hearing : 14/03/2023 345 2 0 / Date of pronouncement : 16/03/2023 ेश/ORDER PER VIKASH AWASTHY, JM: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [ in short ‘the CIT(A)’] dated 29/11/2022, for the Assessment Year 2017-18. 2 ITA NO.103/MUM/2023(A.Y.2017-18) 2. In appeal the Revenue has assailed the findings of CIT(A) deleting disallowance u/s. 80P(2) of the Income Tax Act, 1961 [in short ‘the Act’]. 3. The brief facts of the case as emanating from records are: The assessee is a Co-operative Credit Society engaged in providing credit facilities to its members. The assessee accepts various types of deposits only from its members and give loans only to its members. The members of appellant Co- Op Credit society are the employees of KEM Hospital & Seth GSM College. For the Assessment Year 2017-18, the assessee filed return of income on 13/10/2017 declaring total income as ‘Nil’ after claiming deduction of Rs.2,96,10,186/- u/s. 80P(2) of the Act. The Assessing Officer disallowed assessee’s claim of deduction by invoking the provisions of section 80P(4) of the Act. We find that this issue is perennial. The assessee’s claim of deduction u/s. 80P(2) of the Act was disallowed by the Assessing Officer for identical reasons in Assessment Year 2012-13. The assessee carried the issue in appeal before the CIT(A). The CIT(A) allowed assessee’s claim of deduction u/s. 80P(2) of the Act. The matter further travelled to the Tribunal in appeal by the Revenue in ITA No.4986/Mum/2016. The Tribunal dismissed the appeal of Revenue vide order dated 15/03/2018. Thereafter, in subsequent Assessment Years i.e. assessment year 2013-14, 2014-15 and 2015-16, the Assessing Officer consistently disallowed assessee’s claim under section 80P(2) of the Act on identical grounds. The Tribunal in the orders for the respective Assessment Years accepted assessee’s claim for parity of reasons. For the sake of completeness relevant extract of the findings of Tribunal in Revenue’s appeal in ITA No.6366/Mum/2019 for Assessment Year 2015-16 decided on 07/04/2021 are reproduced herein below: “ 7. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as 3 ITA NO.103/MUM/2023(A.Y.2017-18) considered the judicial pronouncements that have been relied upon by the lower authorities. After deliberating at length on the orders of the lower authorities, we are persuaded to subscribe to the observations of the CIT(A) that as the assessee which is a co-operative credit society is not a primary co-operative bank, hence, it would not be hit by the provisions of Sec.80P(4) as had been made available on the statute vide the Finance Act, 2006 w.e.f 01.04.2007. Our said view is fortified by the fact that it is absolutely mandatory for a co-operative society to seek a licence from the Reserve Bank of India to form and operate as a co-operative bank. Further, a perusal of Circular No. 312 of the Reserve Bank of India reveals the process involved for conversion of a co-operative society into a primary co-operative bank. Admittedly, in the case before us as the assessee being a co-operative credit society is neither authorized nor had undertaken any of the banking business activities as are carried out by a primary co-operative bank, but had only provided financial assistance/credit to its members, therefore, it can safely be concluded that it cannot be held to be a co- operative bank. Apart from that, we find that as stated by the ld. A.R, and rightly so, the issue involved in the present appeal in squarely covered by the orders of the Tribunal in the assessee’s own case for the preceding years, viz. A.Y. 2012-13, ITA No. 4986/Mum/2018, dated 15.03.2018; A.Y 2013-14, ITA No. 864/Mum/2017, dated 20.06.2018; and A.Y 2014-15, ITA No. 4552/Mum/2019, dated 07.01.2021. On the basis of our aforesaid deliberations, we are persuaded to be in agreement with the observations of the CIT(A) that the assessee would not be hit by the provisions of Sec. 80P(4) of the Act. We, thus, being in agreement with the view taken by the CIT(A) that the claim of the assessee under Sec. 80P(2)(a)(i) was in order, uphold the same.” The Revenue has not been able to show any distinguishing feature in the impugned assessment year. Thus, we see no reason to deviate from the consistent view taken by the Tribunal in assessee’s own case in the past on same set of facts. The appeal of Revenue is thus, dismissed and the impugned order is upheld for parity of reasons. 4. In the result, appeal by the Revenue is dismissed. Order pronounced in the open court on Thursday the 16 th day of March, 2023. Sd/- Sd/- (SHRI S.RIFAUR RAHMAN) (VIKAS AWASTHY) ेख /ACCOUNTANT MEMBER /JUDICIAL MEMBER म ु ंबई/ Mumbai, 7 न ं /Dated 16/03/2023 Vm, Sr. PS(O/S) 4 ITA NO.103/MUM/2023(A.Y.2017-18) त ल प अ े षतCopy of the Order forwarded to : 1. ./The Appellant , 2. / 0 / The Respondent. 3. ु 80( )/The CIT(A)- 4. ु 80CIT 5. : ; / 0 न , . . ., म ु बंई/DR, ITAT, Mumbai 6. ; <= " > /Guard file. BY ORDER, //True Copy// (Dy./Asstt.Registrar)/Sr. Private Secretary ITAT, Mumbai