The Coffee Board Employees, Bangalore V. Income-Tax Officer, Bangalore

ITA 1037/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7040 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 11-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR AJIT CIT BENGALURU
• Assessee Lawyers: CHAITANYA V MUDRABETTU
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV , JUDICIAL MEMBER ITA NO. 1037/BANG/2017 ASSESSMENT YEAR : 2007 - 08 THE COFFEE BOARD EMPLOYEES CO-OPERATIVE SOCIETY LTD., NO.1, DR. AMBEDKAR VEEDHI, COFFEE BOARD BUILDING, BENGALURU 560 001. PAN: AABAT 3006B VS. THE INCOME TAX OFFICER (EXEMPTIONS), WARD 2, BENGALURU. APP ELLANT RESPONDENT APP ELLANT BY : SHRI CHAITANYA V. MUDRABETTU, ADVOCATE RESPONDENT BY : SHRI KUMAR AJIT, ADDL. CIT (DR)(ITAT), BENGALURU DATE OF HEARING : 14.12.2017 DATE OF PRONOUNCEMENT : 22 .12.2017 O R D E R 1. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF THE CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDER PASSED BY THE AUTHORITIES BELOW TO THE EXTENT WHICH IS AGAINST THE APPELLANT IS BAD IN LAW AND CO NTRARY TO THE SETTLED PRINCIPLES OF LAW. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE TAXED ON A TOTAL INCOME OF RS. 8,71,009/- AS ASSESSED BY THE LEARNED ASSESSING OFFICER AS AGAINST THE RETURN INCOME OF RS. NIL UND ER THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT. 3. THE ASSESSING OFFICER HAS ERRED IN DISALLOWING THE CLAIM OF DEDUCTION OF AN AMOUNT OF RS.8,71,009/- U/S.80P( 2)(A)(I) OF THE ACT ON THE FACT AND CIRCUMSTANCES OF THE CASE. ITA NO.1037/BANG/2017 PAGE 2 OF 4 4. THE ASSESSING OFFICER AND CIT(A) ERRED IN NOT H OLDING THAT THE APPELLANT IS NOT A PRIMARY CO-OP BANK AS R EFERRED IN SECTION 5(CCV) OF THE BANKING REGULATION ACT, 1949 ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE ASSESSING OFFICER AND CIT(A) ERRED IN COMING TO THE CONCLUSION THAT, THE APPELLANT IS ENGAGED IN THE BA NKING AS DEFINED IN SECTION 5 OF THE BANKING REGULATION ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE CIT(A) FAILED TO APPRECIATE THAT, INSERTION OF CLAUSE (VIIA) IN SECTION 2(24) OF THE ACT DOES NOT ALTER T HE POSITION SO FAR AS EXEMPTION U/S.80P(2)(A)(I) OF THE ACT IS CONCERN ED TO A CO-OP CREDIT SOCIETY WHICH IS ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 8. IN VIEW OF THE ABOVE AND THE OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL, YOUR AP PELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF E QUITY AND JUSTICE. 2. THERE IS A DELAY OF 58 DAYS IN FILING THE APPEAL AND APPLICATION FOR CONDONATION OF THE SAME HAS BEEN FILED BY THE ASSES SEE WHEREIN IT IS STATED THAT THE ASSESSEE WAS WRONGLY ADVICED BY THE COUNSEL FOR THE ASSESSEE THAT THERE WAS NO MERIT IN THE CASE FOR FI LING AN APPEAL. HOWEVER, ON THE PROFESSIONAL ADVICE OF ANOTHER COUNSEL SUGGE STING FOR FILING OF AN APPEAL, SOON THEREAFTER AN APPEAL WAS FILED BEFORE THE TRIBUNAL WHICH LED TO A DELAY OF 58 DAYS. I AM SATISFIED THAT THERE WAS REASONABLE CAUSE FOR THE DELAY IN FILING THE APPEAL AND THEREFORE THE DELAY IN FILING OF THE APPEAL IS CONDONED. 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE ACTIV ITY OF COLLECTING FUNDS BY WAY OF DEPOSITS FROM ITS MEMBERS AND OTHERS RAISING LOANS. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U /S. 80P(2)(A)(I) OF THE ACT WHICH WAS DENIED BY THE LOWER AUTHORITIES. IN SUPPORT OF HIS ITA NO.1037/BANG/2017 PAGE 3 OF 4 CONTENTIONS, RELIANCE WAS PLACED UPON THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF SRI BILURU GURUBASAVA PAT TINA SAHAKARI SANGHA NIYAMITHA, BAGALKOT IN ITA NO.5006/2013. 4. THE LD. DR RELIED UPON THE ORDERS OF THE LOWER A UTHORITIES. 5. WE HAVE CAREFULLY EXAMINED THE MATERIAL ON RECOR D IN THE LIGHT OF RIVAL SUBMISSIONS AND WE FIND THAT THE HONBLE APEX COURT IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD., HYDERABAD V. ACIT IN CIVIL APPEAL NO.10245 OF 2017 DATED 08.08.2017, CONSIDERED IDENTICAL ISSUE IN WHICH THE MATTER WAS RESTORED BACK TO THE ASSESSING OFFIC ER TO VERIFY WHETHER CREDIT FACILITIES WERE GIVEN BY THE ASSESSEE COOPER ATIVE BANK TO OUTSIDERS ALSO. SINCE THE HONBLE SUPREME COURT HAS CLARIFIE D THE LEGAL POSITION IN THIS REGARD, THE IMPUGNED ISSUE IS TO BE ADJUDICATE D IN THE LIGHT OF THE JUDGMENT OF THE HONBLE SUPREME COURT. ACCORDINGLY , I SET ASIDE THE ORDER OF THE CIT(APPEALS) ON THIS ISSUE AND REMAND THE MA TTER TO THE ASSESSING OFFICER WITH A DIRECTION TO READJUDICATE THE ISSUE IN THE LIGHT OF JUDGMENT OF HONBLE APEX COURT IN THE CASE OF CITIZEN CO-OPERATIVE SOCIETY LTD . ( SUPRA ). 6. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF DECEMBER, 2017. SD/- ( SUNIL KUMAR YADAV ) JUDICI AL MEMBER BANGALORE, DATED, THE 22 ND DECEMBER, 2017. / D ESAI S MURTHY / ITA NO.1037/BANG/2017 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.