The Rupana M.P. Coop Socity Ltd, Bathinda V. The Deputy Commissioner of Income tax, Bathinda

ITA 113/ASR/2010

• Counselvise Citation: 11320914 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 03-03-2010
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: S K BANSAL
• Keywords: Maximum Marginal Rate; Rule of consistency
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, HONBLE VICE PRESIDENT AND SH. D.K. SRIVASTAVA, ACCOUNTANT MEMBER I.T.A. NO. 112(ASR)/2010 ASSESSMENT YEAR: 2006-07 THE RUPANA M.P. CO-OP. SOCIETY LTD. VS. DEPUTY COMM R. OF INCOME-TAX, VILL. RUPAM, DISTT BHATINDA. CIRCLE-2, BHATINDA. PAN:AABTT1578M (APPELLANT) (RESPONDENT) I.T.A. NO. 113(ASR)/2010 ASSESSMENT YEAR: 2006-07 THE RUPANA M.P. CO-OP. SOCIETY LTD. VS. DEPUTY COMM R. OF INCOME-TAX, VILL. RUPAM, DISTT BHATINDA. CICLE-2, BHATINDA. PAN:AABTT1578M (APPELLANT) (RESPONDENT) I.T.A. NO. 114(ASR)/2010 ASSESSMENT YEAR: 2006-07 THE PATHRALA M.P. CO-OP. SOCIETY LTD. VS. DEPUTY CO MMR. OF INCOME-TAX, VILL. PATHARALA. DISTT BHATINDA. CICLE-2, BHATIND A. PAN:AACFT7064R (APPELLANT) (RESPONDENT) APPELLANT BY: SH. S.K. BANSAL, ADV RESPONDENT BY: SH. AMRIK CHAND, DR DATE OF HEARING : 07.12.2011 2 DATE OF PRONOUNCEMENT:08.12.2010 ORDER PER BENCH: THESE THREE APPEALS FILED BY DIFFERENT ASSESSEES A GAINST THE SEPARATE ORDERS OF CIT(A), BHATINDA, RELATING TO ASSESSMENT YEAR 2006-07, WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER FOR THE SAKE OF CONVENIENCE SINCE SOME OF THE ISSUES ARE COMMON. 2. FIRSTLY, WE WILL TAKE UP APPEAL IN ITA NO.112(ASR)/2010. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE ACTION OF T HE CIT(A) IN CONFIRMING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80O(2)( A)(IV) OF THE INCOME-TAX ACT, 1961 ( IN SHORT THE ACT). THE ASSESSEE IS A AGRICULTURAL MULTIPURPOSE CO-OPERATIVE SOCIETY REGISTERED UNDER THE PUNJAB C O-OP. SOCIETIES ACT, 1961 AND IS PROVIDING BASIC FACILITIES LIKE FINANC ING AT A LOWER RATES, AGRICULTURE IMPLEMENTS, SUPPLY OF SEEDS ETC. TO THE AGRICULTURIST, WITHOUT ANY PROFIT MOTIVE. WHILE FRAMING ASSESSMENT, THE AO TOO K THE VIEW THAT INTEREST INCOME ON THE SUPPLY OF AGRICULTURAL COMMODITIES/I MPLEMENTS TO ITS MEMBERS IS NOT COVERED UNDER ANY SECTION. THE A.O. OBSERVED THAT SECTION 80P(2)(A)(IV) PROVIDES DEDUCTION IN RESPECT OF INCO ME WHICH IS RECEIVED BY THE SOCIETY FROM THE SUPPLY OF IMPLEMENTS AND OTHER COMMODITIES TO ITS 3 MEMBERS AND IT DOES NOT SPEAK OF DEDUCTION OF INTER EST INCOME RECEIVED FROM ITS MEMBERS WHICH IS ENTIRELY OF DIFFERENT NA TURE. THE AO TOOK THE VIEW THAT ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80P OF THE ACT. 3. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ORDER OF THE A.O. AND HENCE, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 4. BEFORE US, SH. S.K. BANSAL, THE LD. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE RETURNED INCOME OF THE ASSESSEE- SOCIETY WAS ACCEPTED BY THE A.O. IN THE PRECEDING AND SUCCEEDING YEARS I.E. 2003-04, 2004-05, 2005- 06 & 2006-07 ON SAME FACTS AND ACTIVITIES. HE FURTH ER SUBMITTED THAT THE A.O. HAS NOT BROUGHT ON RECORD ANY NEW FACTS TO DIS TINGUISH THE CASE BEFORE MAKING THE DISALLOWANCE. THE LD. COUNSEL FURTHER ST ATED THAT THE ASSESSEE IS DEALING WITH MEMBERS WHO ARE AGRICULTURIST AND ALLO WED CREDIT FACILITY ON SALE OF SEEDS AND IMPLEMENTS TO THE SAME MEMBERS TO WHOM THE LOAN WAS GIVEN IN THE NORMAL COURSE. HE, THEREFORE, SUBMITTE D THAT THE CLAIM OF THE ASSESSEE MAY BE ALLOWED. HE ALSO RELIED ON THE DECI SION OF THIS BENCH OF THE TRIBUNAL, DATED 10 TH JUNE, 2011, IN THE CASE OF THE PACCA KALAN MULTIPURPOSE CO-OP. SOCIETY, PACCA KALAN VS. DY. CO MMR. OF INCOME-TAX, CIR.II, BHATINDA, PASSED IN ITA NO. 109(ASR)/2011 R ELATING TO ASSESSMENT YEAR 2006-07. 4 5. SH. AMRIK CHAND, LD. DR, ON THE OTHER HAND, PLAC ED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. WE, BY OUR ORDER OF EVEN DATE, HAVE DECIDED A SIMILAR ISSUE IN THE CASE OF THE JEEDA MULIPURPOSE CO-OP. SOCIETY LTD. VS. DCIT, CIRCLE II, BHATINDA, IN ITA NO.81(ASR)/2010. IN THE SAID CASE, THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE WERE AS UNDER: 5. IN THIS CASE, THE ASSESSEE HAS SUBMITTED WRITTE N SUBMISSIONS, WHICH ARE AVAILABLE ON RECORD. IN THE WRITTEN SUBMI SSIONS, THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS ERRE D IN UPHOLDING THE ADDITION OF RS.2,37,790/-, WHICH WAS REDUCED TO RS. 1,82,790/- AS THE A.O. GAVE RELIEF U/S 80P(2)(C)(II) READ WITH SECTIO N 154 ON THE APPLICATION OF THE ASSESSEE VIDE HIS ORDER DATED 25 .05.2010. FURTHER, THE ASSESSEE HAS SUBMITTED THAT THERE CAN BE NARROW INTERPRETATION THAT CREDIT SHOULD BE ONLY OF CASH AND NOT ON ACCOU NT OF GOODS SOLD ON CREDIT BASIS. THIS IS ALSO AS PER THE ACCOUNTING PR INCIPLES THAT CREDIT IS TO BE TAKEN NOT ONLY FOR LOAN BORROWED BUT ALSO FO R THE GOODS SOLD ON CREDIT TO CUSTOMERS/MEMBERS. THE CREDIT CAN BE OF M ONEY OR GOODS AS PER DEFINITION OF THE WORD CREDIT AT PAGE 331 GI VEN IN BLACKS LAW DICTIONARY (5 TH EDITION), WHICH IS REPRODUCED BELOW: CREDIT THE ABILITY OF A BUSINESS OR PERSON TO BORROW MONE Y, OR OBTAIN GOODS ON TIME, IN CONSEQUENCE OF THE FAVOURA BLE OPINION HELD BY THE PARTICULAR LENDER AS TO SOLVENC Y AND RELIABILITY. 5.1. THE ASSESSEE FURTHER SUBMITTED THAT LIBERAL AP PROACH SHOULD BE TAKEN AS SECTION 80P HAS BEEN ENACTED WITH A VIEW T O ENCOURAGE AND PROMOTE GROWTH OF CO-OPERATIVE SECTOR IN THE ECONOM IC LIFE OF THE COUNTRY AND IN PURSUANCE OF THE DECLARED POLICY OF THE GOVERNMENT. 5 5.2. IT IS ALSO SUBMITTED BY THE ASSESSEE IN ITS WR ITTEN SUBMISSIONS THAT THE DEPARTMENT HAS NOT IMPOSED TAX ON THE ASSE SSEE IN THE PRIOR ASSESSMENT YEARS TO THE ASSESSMENT YEAR UNDER APPEA L AS MENTIONED IN PARA 2 & 3 OF THE ASSESSMENT ORDER. SIMILARLY, THE A.O. HAS NOT IMPOSED TAX ON THE ASSESSEE IN THE NEXT FOUR ASSESS MENT YEARS SO BY APPLYING THE RULE OF CONSISTENCY THE TAX CANNOT BE IMPOSED ON THE ASSESSEE ON SUCH INCOME. RELIANCE WAS PLACED ON THE DECISION OF THE ITAT, AMRITSAR BENCH, DATED 10.06.2011 IN THE CASE OF THE PACCA KALAN MULTI-PURPOSE CO-OP. SOCIETY, PACCA KALAN VS. DCIT, CIRCLE- II, BHATINDA, PASSED IN ITA NO.109(ASR)/2010, RELAT ING TO ASSESSMENT YEAR 2006-07. 6.1. WE HAVE ALSO FOLLOWED THE DECISION OF THIS BEN CH OF THE TRIBUNAL DATED 10 TH JUNE, 2011 IN THE CASE OF THE PACCA KALAN MULTI-P URPOSE CO-OP. SOCIETY, PACCA KALAN VS. DIT, CIR.II, BHATINDA, PAS SED IN ITA NO.109(ASR)/2010 RELATING TO ASSESSMENT YEAR 2006-0 7. IN THE SAID CASE, THE TRIBUNAL HAS HELD AS UNDER: 6. WE HAVE CAREFULLY PERUSED AND CONSIDERED THE ENTIRE FACT SITUATION OF THE CASE AS WELL AS RIVAL SUBMISSIONS MADE BY THE CONTENDING PARTIES. IT IS AN UNDISPUTED FACT THAT THE AO UNDER IDENTICAL SET OF FACTS AND CIRCUMSTANCES OF THE CAS E, DULY CONSIDERED AND ACCEPTED THE CLAIM OF THE ASSESSEE FOR THE ASSE SSMENT YEARS 2003- 04, 2004-05 & 2009-10 UNDER SCRUTINY ASSESSMENT MAD E UNDER SECTION 143(3) OF THE ACT. HOWEVER, DURING THE ASSESSMENT Y EAR 2006-07, THE CLAIM WAS NOT ACCEPTED. IN VIEW OF THIS, THE QUASI -JUDICIAL AUTHORITY LIKE A.O. CANNOT CHANGE HIS OPINION ON THE FOUNDATI ON OF SUBJECTIVITY, ARBITRARINESS AND SURMISES WITHOUT BRINGING ON RECO RD CLEARLY DIFFERENT SET OF FACTS AND CIRCUMSTANCES. IN THE AS SESSMENT YEAR UNDER CONSIDERATION, THIS BECOMES MORE IMPERATIVE AND RE LEVANT PARTICULARLY, WHEN THE AO HAS ACCEPTED THE CLAIM O F THE ASSESSEE UNDER SCRUTINY ASSESSMENT, AS MENTIONED EARLIER. TH EREFORE, THE CONCEPT OF CONSISTENCY AND DOCTRINE OF RES-JUDICATA IS APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN THIS CASE, THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS : 6 I) BERGER PAINTS INDIA LTD. CIT, 266 ITR 99 (SC) II) RADHASOAMI SATSANG VS. CIT 193 ITR 321 (SC) 6.1 THE CASE OF THE ASSESSEE IS THAT THE APPELLANT IS CO-OPERATIVE CREDIT SOCIETY, WHEREAS THE CASE LAWS RELIED UPON B Y THE AO PERTAIN TO CONSUMER CO-OPERATIVE SOCIETY. WE HAVE GONE THROUGH THE CASE LAWS RELIED UPON BY THE AO AND FOUND THE SAME ARE NOT A PPLICABLE TO THE FACT SITUATION OF THE PRESENT CASE, AS THE OBJECT O F THE ASSESSEE, IN SUCH A CASE IS DIAMETRICALLY OPPOSITE, TO THE OBJECT OF THE PRESENT ASSESSEE. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE PHRASE ATTRIBUTABLE IS APPEARING UNDER SECTION 80P, HAS WIDE AMBIT VIS-- VIS, THE PHRASE DERIVED FROM. HE SUBMITTED HIS CONT ENTION ON THE BASIS OF THE DECISION OF CAMBAY ELECTRIC SUPPLY INDUSTRI AL CO., LTD. VS. CIT 113 ITR 84 (SC). WE ARE IN COMPLETE AGREEMENT WITH THE CONTENTION RAISED BY THE ASSESSEE AND FOUND THAT TH E CONTENTION HAS MERIT BASED ON THE PHRASE USED UNDER SECTION 80P(2) (A)(IV) OF THE ACT. IN VIEW OF THIS, THE FINDINGS OF THE LD. CIT(A) ARE SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 6.2. IN VIEW OF THE ABOVE ORDERS OF THE TRIBUNAL, W E ALLOW THE APPEAL OF THE ASSESSEE. 7. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA NO. 114(ASR)/2010 FOR THE ASSESSMENT YEAR 2006-07. IN THIS APPEAL, THE AS SESSEE HAS CHALLENGED THE ACTION OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.3,40,493/- CLAIMED BY THE ASSESSEE UNDER SECTION 80P(2)(A)(IV ) OF THE INCOME-TAX ACT, 1961 ( IN SHORT, THE ACT). 8. THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THA T OF THE CASE OF M/S. RUPANA MULTIPURPOSE CO-OP. SOCIETY LTD. (SUPRA), IT A NO.112(ASR)/2010, 7 EXCEPT THE AMOUNT OF DISALLOWANCE. FOR THE DETAILED REASONS GIVEN IN ITA NO.112(ASR)/2010 (SUPRA), WE ALLOW THE APPEAL OF TH E ASSESSEE. 9. NOW, WE WILL TAKE UP APPEAL IN ITA NO.113(ASR)/2010 RELATING TO ASSESSMENT YEAR 2006-07. THIS APPEAL FILED BY THE A SSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), BATHINDA, DATED 15 .12.2009, IN CONFIRMING THE PENALTY OF RS.67,008/- UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 ( IN SHORT, THE ACT). 10. IN THIS CASE, THE AO IMPOSED A PENALTY OF RS.67 ,008/- UNDER SECTION 271(1)(C) OF THE ACT, ON THE AMOUNT OF RS.2,09,075/ - STATING THAT THE SOCIETY COULD NOT GIVE ANY JUSTIFICATION REGARDING ITS CLAI M OF DEDUCTION U/S 80P(2)(A)(IV) OF THE ACT, IN RESPECT OF THE INTERES T RECEIVED BY THE SOCIETY FROM ITS MEMBERS ON THE SUPPLY OF AGRICULTURE COMMO DITIES. 11. ON APPEAL, THE LD. CIT(A) CONFIRMED THE PENALTY AND HENCE, THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. WHILE DECIDING THE QUANTUM APPEAL OF THE ASSESSEE I.E. IN ITA NO.112(ASR)/2010, IN ASSESSEES OWN CASE (SUPRA ), WE HAVE DELETED THE DISALLOWANCE OF RS.2,09,075/-. IN OUR CONSIDERED VI EW, NO PENALTY SURVIVES 8 AFTER DELETION OF THE ADDITION MADE. IT IS SETTLED LAW WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER, ON THE BASIS OF WHICH PENALTY FOR CONCEALEMTN WAS LEVIED, ARE DELETED THERE REMAINS NO BASIS AT A LL FOR LEVYING THE PENALTY FOR CONCEALMENT AND, THEREFORE, IN SUCH CASE NO SUC H PENALTY CAN SURVIVE AND THE SAME IS LIABLE TO BE CANCELLED. IN VIEW OF THE SETTLED LEGAL POSITION, WE CANCEL THE PENALTY OF RS.67,008/- LEVIED U/S 271(1) (C) OF THE ACT. 13. IN THE RESULT, ALL THE THREE APPEAL FILED BY TH E ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8TH DECEMBER, 2011. SD/- SD/- (D.K.SRIVASTAVA) (H.L. KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 8TH DECEMBER, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE: (1) THE RUPANA M.P. CO-OP.SOCIETY LTD . VILL. RUPAM, DISTT BHATINDA. 2. THE DCIT, CIR.II, BHATINDA. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR. 9