Pandyan Grama Bank, Virudhunagar V. ACIT, Virudhunagar

ITA 1092/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64186 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-08-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 18-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SHUKLA IRS
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Revised return
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH CHENNAI BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SHRI V. DURGA RAO, JUDICIAL MEMBER .. ITA NOS. 1088, 1091 & 1092/MDS/2012 ASSESSMENT YEARS : 2007-08, 2008-09 & 2009-10 M/S. PANDYAN GRAMA BANK, NO.2-70-1, COLLECTORATE COMPLEX, VIRUDHUNAGAR-626002. (PAN : AAAAP0895P) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-I, VIRUDHUNAGAR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE RESPONDENT BY : MS. ANUPAMA SHUKLA, IRS CIT DATE OF HEARING : 23.0 8.2012 DATE OF PRONOUNCEMENT : 23.08.201 2 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS DATED 23-03-2012 PASSED BY THE CIT(APPEALS)-II, MAD URAI FOR THE ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10. AS COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, THEY WERE HEARD TOGETHER ITA NOS.1088, 1091 & 1092/MDS/2012 2 AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. ITA NO. 1088/MDS/2012: BRIEF FACTS ARE THAT THE ASSESSEE M/S. PANDYAN GRAMA BANK FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 DISCLOSING NIL INCOME. SUB SEQUENTLY, THE ASSESSEE FILED A REVISED RETURN AND THE INCOME BEFO RE CLAIMING DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT, 1961 ('THE ACT' FOR SHORT) WAS SHOWN AT ` 7,03,54,000/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT AND THE ASSESSING O FFICER HAS COMPLETED THE SCRUTINY ASSESSMENT AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT NIL TREATING THE STATUS OF THE ASSE SSEE AS ASSOCIATION OF PERSONS. THE SCRUTINY ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS SET ASIDE BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT VIDE HIS ORDER DATED 28-10-2 009. THE ASSESSING OFFICER SUBSEQUENTLY PASSED AN ORDER UNDE R SECTION 143(3) READ WITH SECTION 263 OF THE ACT WHEREIN THE ASSESS ING OFFICER HAS ASSESSED THE TOTAL INCOME AT ` 7,03,53,650/- HOLDING THAT THE ASSESSEE WAS NOT ENTITLED TO THE DEDUCTION UNDER SE CTION 80P W.E.F. 01-04-2007, IN VIEW OF THE INSERTION OF SUB-SECTION (4) OF SECTION 80P OF THE ACT. ITA NOS.1088, 1091 & 1092/MDS/2012 3 3. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE L EARNED CIT(APPEALS) IN ITA NO. 10/2010-11. THE ASSESSEE A LSO FILED RECTIFICATION APPLICATION BEFORE THE ASSESSING OFFI CER ON 20-10-2009 ON WHICH NO ORDER HAS BEEN PASSED. THE ASSESSEE FI LED AN APPEAL AGAINST THE RECTIFICATION BEFORE THE LEARNED CIT(AP PEALS) IN ITA NO. 18/2011-12. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ISSUE INVOLVED IN THE APPEAL IS WHETHER THE ASSESSEE IS E LIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT OR NOT. IT W AS SUBMITTED BEFORE THE LEARNED CIT(APPEALS) THAT THE ISSUE INVOLVED IN THIS APPEAL IS COVERED BY THE ORDER OF THE TRIBUNAL IN THE ASSESSE ES OWN CASE IN ITA NO. 1941/MDS/2009 FOR THE ASSESSMENT YEAR 2007- 08 DATED 13- 08.2010. THE LEARNED CIT(APPEALS) AFTER CONSIDERIN G THE ORDER OF THE TRIBUNAL HAS OBSERVED THAT THE ORDER OF THE TRIBUNA L DATED 13-08- 2010 WAS RENDERED IN AN ALTOGETHER DIFFERENT CONTEX T, VIZ. APPEAL AGAINST ORDER U/S 263 OF THE ACT. HE FURTHER OBSER VED THAT AS PER THE BOARDS CIRCULAR NO. 6/2010 DATED 20-09-2010, REGION AL RURAL BANKS ARE NOT ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. AS THE BOARDS CIRCULAR WAS ISSUED SUBSEQUENT TO THE ORDER OF THE TRIBUNAL, THE TRIBUNAL DID NOT HAVE THE BENEFIT OF DECIDING THE I SSUE OF DEDUCTION ITA NOS.1088, 1091 & 1092/MDS/2012 4 UNDER SECTION 80P(4) OF THE ACT IN UNISON WITH CIRC ULAR NO.6/2010 AND HELD THAT, IN VIEW OF THE AMENDMENT OF THE ACT AND CONSEQUENTIAL CIRCULAR NO.6 DATED 20-09-2010 SPECIFICALLY RE-ITERATING THAT RRBS ARE NOT ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT FROM ASSESSMENT YEAR 2007-08 ONWARDS AND CIRCULAR NO. 319 STANDS WITHDRAWN W.E.F. ASSESSMENT YEAR 2007-08, RRBS CAN NO LONGER BE DEEMED TO BE A CO-OPERATIVE SOCIETY FO R THE PURPOSE OF INCOME TAX ACT W.E.F. ASSESSMENT YEA R 2007-08. ASSESSEE IS NEITHER A PRIMARY AGRICULTURA L CREDIT SOCIETY NOR A PRIMARY CO-OPERATIVE AGRICULTU RAL AND RURAL DEVELOPMENT BANK WHICH ALONE QUALIFIED FOR DEDUCTION U/S 80P(4) OF THE ACT. HE CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 5. ON BEING AGGRIEVED, THE ASSESSEE HAS CARRIED THE MATTER BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL I N THE ASSESSEES OWN CASE IN ITA NO. 1941/MDS/2009 FOR THE ASSESSMEN T YEAR 2007- 08 DATED 13-08-2010 WHEREIN SIMILAR ISSUE WAS DECID ED ON MERITS BY THE TRIBUNAL. 6. ON THE OTHER HAND, THE LEARNED DR STRONGLY SUPPO RTED THE ORDER PASSED BY THE LEARNED CIT(APPEALS). ITA NOS.1088, 1091 & 1092/MDS/2012 5 7. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE O NLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT OR NOT. THE TRIBUN AL WHILE DECIDING THE ASSESSEES OWN CASE IN ITA NO. 1941/MDS/2009 DA TED 13-08- 2010 FOR THE ASSESSMENT YEAR 2007-08 AGAINST THE OR DER U/S 263 OF THE ACT, ON MERITS HAS HELD AS UNDER : WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. IT IS NOT DISPUTED THAT IF THE ASSESS EE IS TO BE TREATED AS A CO-OPERATIVE SOCIETY, THEN THE DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT IS AVAILABLE TO IT. THE ONLY DISPUTE HERE IS THAT AS SESSEE BEING A AREGIONAL RURAL BANK ESTABLISHEDU UNDER RRB ACT, 1976, WAS TO BE TREATED AS A CO-OPERATIVE BANK OR COULD BE CONSIDERED AS A CO-OPERATIVE SOCIETY. NO DOUBT, SUB-SECTION (4) OF SECTION 80P INTRODUCED BY FINANCE ACT 2006 CLEARLY TAKES A CO-OPERATIVE BANK OUT OF THE PURVIEW OF DEDUCTION AVAILABLE UNDER 80P(2)(A)(I) OF THE ACT. THUS, IF THE ASSESSEE IS A CO- OPERATIVE BANK, IT WOULD NOT BE ELIGIBLE FOR SUCH DEDUCTION. CONTENTION OF THE ASSESSEE IS THAT IN V IEW OF SECTIONS 22 AND 23 OF THE RRB ACT, 1976, IT WAS T O BE TREATED AS A CO-OPERATIVE SOCIETY AND THE SAID SECTIONS HAVING NOT BEEN OVERRIDDEN, IT COULD ONLY BE TREATED AS A CO-OPERATIVE SOCIETY. FURTHER, RELYIN G ON DEFINITION OF CO-OPERATIVE BANK AS GIVEN IN THE ITA NOS.1088, 1091 & 1092/MDS/2012 6 BANKING REGULATION ACT, 1949, ASSESSEE SUBMITS THAT IT IS NEITHER A STATE CO-OPERATIVE BANK NOR A CENTRAL C O- OPERATIVE BANK NOR A PRIMARY CO-OPERATIVE BANK, AND THEREFORE, NOT A CO-OPERATIVE BANK AT ALL. WHATEVE R THAT MAY BE, THERE IS MUCH STRENGTH IN THE ARGUMENT OF THE ASSESSEE THAT IT IT IS TO BE TREATED AS CO- OPERATIVE SOCIETY IN VIEW OF THE PROVISIONS CONTAIN ED IN RRB ACT, 1976. IF SO, IT WOULD BE ELIGIBLE UNDER SE CTION 80P(2)(A)(I) OF THE ACT. 8. THE TRIBUNAL WHILE DECIDING THE ISSUE GAVE A FIN DING THAT THE ASSESSEE HAS TO BE TREATED AS A CO-OPERATIVE SOCIET Y IN VIEW OF THE PROVISIONS CONTAINED IN REGIONAL RURAL BANKS ACT, 19 76. IF SO, IT WOULD BE ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. IN VIEW OF THE SPECIFIC FINDING GIVEN BY THE TRIBUNAL IN THE A SSESSEES OWN CASE, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH OF THIS TRIBUNAL, THE GROUND OF APPEAL RAISED BY THE ASSESS EE IS ALLOWED. IN THE CIRCUMSTANCES, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 9. ITA NOS. 1091 & 1092/MDS/2012: THE FACTS IN THESE APPEALS ARE SIMILAR AND THE ISS UE INVOLVED IS ALSO SIMILAR AS IN ITA NO. 1088/MDS/2012. IN VIE W OF OUR DECISION IN ITA NO. 1088/MDS/2012 ABOVE, THESE TWO APPEALS F ILED BY THE ASSESSEE ARE ALSO ALLOWED. ITA NOS.1088, 1091 & 1092/MDS/2012 7 10. IN THE RESULT, ALL THE THREE APPEALS FILED BY T HE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 23 RD OF AUGUST, 2012 AT CHENNAI. SD/- SD/- (DR. O. K. NARAYANAN) ( V.DURGA RAO ) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 23 RD AUGUST, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE