Kanaka Credit Co.operative Soceity Ltd, Hosadurga V. Income-tax Officer, Ward-1, Chitradurga

ITA 1068/BANG/2014

• Counselvise Citation: 106821114 RSA 2014
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C H SUNDAR RAO
• Assessee Lawyers: PRATEEK MARLECHA
• Keywords: Assessment record
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE , ACCOUNTANT MEMBER ITA NO. 1 068 / BANG/20 1 4 (ASSESSMENT YEAR: 2010 - 11) KANAKA CREDIT CO - OPERATIVE SOCIETY LTD. MAIN RO AD, HOSADURGA - 577527 PAN: AAAK1889N APPELLANT VS. COMMISSIONER OF INCOME - TAX, DAVANGERE. RESPONDENT APPELLANT BY: SHRI PRATEEK MARLECHA , CA. RESPONDENT BY: SHRI C.H.SUNDAR RAO, CIT(DR) DATE OF HEARING : 16 / 12 /2014 . DATE OF PRONOUNCEMENT: 30 /12/2014. O R D E R PER SMT. P.MADHAVI DEVI, JM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX , [CIT], DAVANGERE , DATED 20/03/2014 HOLDING THAT THE ASSESSEE IS NOT ELIGIBLE FOR D EDUCTION U/S 80P(2)(A)(I) OF THE INCOME - TAX ACT, 1961[HEREINAFTER REFERRED TO AS 'THE ACT'] IN VIEW OF THE PROVISIONS OF SEC.80P(4) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CREDIT CO - OPERATIVE SOCIETY. IT FILED ITS RETURN OF INCOME FOR THE RELEVANT ITA NO . 1 068 /BANG/201 4 KANAKA CREDIT CO - OPERATIVE SOCIETY LTD. PAGE 2 OF 3 ASSESSMENT YEAR CLAIMING EXEMPTION U/S 80P OF THE ACT. THE ASSESSING OFFICER (AO) ACCEPTED THE RETURN FILED BY THE ASSESSEE. THEREAFTER, THE CIT PERUSED THE ASSESSMENT RECORDS AND FOUND THAT THE ASSESSMENT ORDER IS ERRONEOUS AND P REJUDICIAL TO THE INTERESTS OF THE REVENUE AS THE BUSINESS ACTIVITY OF THE ASSESSEE IS AKIN TO A CO - OPERATIVE BANK AND CONSEQUENT TO AMENDMENT TO SEC.80P(4), THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. HE, ACCORDINGLY, REVISED THE ASSESSMENT ORDER BY ISSUANCE OF NOTICE U/S 263 OF THE ACT AND THEREAFTER DIRECTED THE AO TO VERIFY THE ISSUE REGARDING ELIGIBILITY OF THE SOCIETY FOR DEDUCTION U/S 80P OF THE ACT. AGGRIEVED BY THE SAID ORDER OF THE CIT U/S 263, THE ASSESSEE IS IN APPE AL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S.VASAVI CREDIT CO - OPERATIVE SOCIETY LTD., IN ITA NO.1 18/2012 DATED 27/06/2014 . THUS ACCORDING TO HIM, THE ORDER OF THE AO WAS NOT ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND HENCE, THE ORDER US 263 IS NOT MAINTAINABLE. THE LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVER SUPPORTED THE ORDER OF THE CIT. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE HON BLE HIGH COURT OF ITA NO . 1 068 /BANG/201 4 KANAKA CREDIT CO - OPERATIVE SOCIETY LTD. PAGE 3 OF 3 KARNATAKA IN A NUMBER OF CASES, INCLUDING THE CASE OF M/S.VASAVI CREDIT CO - OPERATIVE SOCIETY LTD., CITED SUPRA, HAS HELD THAT IF THE ASSESSEE IS NOT A CO - OPERATIVE BANK CARRYING EXCLUSIVELY BANKING BUSINESS AND IF DOES NOT POSSESS A LICENSE FROM THE RESERVE BANK OF INDIA TO CARRY ON BANKING BUSINESS, THEN IT IS NOT A CO - OPERATIVE BANK BUT A CO - OPERATIVE SOCIETY WHICH CARRIES ON BUSINESS OF MONEY LENDING TO ITS MEMBERS WH ICH IS COVERED U/S 80P(2)(A)(I) OF THE ACT AND THEREFORE IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT AND DOES NOT ATTRACT THE PROVISIONS OF SEC.80P(4) OF THE ACT. RESPECTFULLY FOLLOWING THE SAME, WE HOL D THAT THE ORDER OF THE CIT U/S 263 IS NOT MAINTAINABLE AND ACCORDINGLY SET ASIDE THE SAME. 5. IN THE RESULT, THE ASSESSEE S APPEAL IS ALLOWED. PRON OUNCED IN THE OPEN COURT ON 30 TH OF DECEMBER , 201 4. SD/ - SD/ - ( ABRAHAM P GEO RGE ) ( SMT. P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER E KSRINIVASULU COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE