The Khedbrahma Taluka Primary Teachers Co.Op. Credit Society Ltd., Himatnagar V. The Income Tax Officer, Ward-1, Himatnagar

ITA 115/AHD/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0553 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-07-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 27-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FORTHEASSESSEEALSORELIEDUPONTHE
• Assessee Lawyers: SHRIRUSHINPATEL; FOLLOWINGTHEDECISIONOFHONBLEKARNATAKA; .THEISSUEFORCONSIDERATIONBEFOREUSISWHETHER

Judgement Text

THEINCOMETAXAPPELLATETRIBUNAL AHMEDABADDIVISIONBENCH,“A”BENCH,AHMEDABAD Before:ShriRamitKochar,AccountantMember& ShriTRSenthilKumar,JudicialMember TheKhedbrahma TalukaPrimary TeachersCo-operative CreditSocietyLimited StationRoad,Near DaveHospital, Khedbrahma-383255 Gujarat PAN:AABTT2489D (Appellant) v. TheIncomeTax Officer,Ward-1 Himatnagar IncomeTax Office,Near GandhiTown Hall,SH-76A, Sabarkanta, Himatnagar- 383001,Gujarat (Respondent) Assesseeby:ShriRushinPatel,AR Revenueby:Ms.BhavnasinghGupta,Sr.D.R. Dateofhearing:31-07-2024 Dateofpronouncement:01-08-2024 आदेश/ORDER ThisappealinITANo.115/Ahd/2023forassessment year2018-19isfiledbytheassesseebeforeIncomeTax AppellateTribunal,AhmedabadBench,Ahmedabad,which ITANo.115/Ahd/2023 AssessmentYear2018-19 I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 2 hasarisenfromtheappellateorderdated21-12-2022videDIN &OrderNo.ITBA/NFAC/S/250/2022-23/1048137719(1) passedbyld.CommissionerofIncome-Tax(Appeals),NFAC, Delhiu/s250oftheIncome-taxAct,1961,whichinturnhas arisenfromtheassessmentorderdated09-02-2021passedby learnedAssessingOfficeru/s.143(3),143(3A)AND143(3B)of theIncome-taxAct,1961(OrderNo.ITBA/AST/S/143(3)/ 2020-21/10304713151). 2.Attheoutset,itisobservedthatthisappealisfiled belatedlyby9daysbeyondthetimestipulatedu/s253(3)of the1961Act.TheassesseehasfiledAffidavitprayingfor condonationofdelay,whereinitisaverredthatthereisa delayof9daysinfilingthisappealbelatedlywithTribunalas theconcernedaccountantwasgiventheappellateorderbuthe forgottofiletheappealintime,andwhenitwasenquiredby theSecretaryoftheassesseeSociety,thenherecalledthat theappealisnotfiledandthenimmediatestepsweretakento filethisappealwithTribunal,butbythattimeoffilingthere wasdelayof9daysinfilingthisappealbelatedlywith Tribunal.Prayersaremadethatthisdelayof9daysbe condoned.Theld.Sr.DRdidnothaveseriousobjectionifthe delayof9daysarecondonedbyBench.Theappellateorderof theLd.CIT(A)isdated21.12.2022,andtheappealoughtto havebeenfiledbytheassesseewithTribunalwithin60days I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 3 ofserviceoftheorderoftheLd.CIT(A),whichasperForm36 wasreceivedbytheassesseeon21.12.2022itself.Thusthe appealoughttohavebeenfiledwithTribunalonorbefore19 th February2023,buthasbeenfiledon28.02.2023belatedlyby 9daysbeyondthetimestipulatedu/s253(3).Thereasonfor delayinfilingappealisinadvertentmistakebytheconcerned accountant,whoforgotthefiletheappealwithTribunalin time.Thus,theassesseepleadedthattheaforesaiddelayof9 daysmaybecondoned.TheLd.D.R.didnothaveserious objectiontothecondonationofdelaybyTribunal.Wehave consideredthecontentionofboththeparties,andweareof theconsideredviewthattheassesseehasshownreasonable andsufficientcauseforfilingthisappealbelatedlywithITAT of9daysbeinginadvertentmistakeofconcernedaccountant oftheassessee.Underthesefactsandcircumstances,weare oftheconsideredviewthattheassesseehasshownreasonable andsufficientcauseinfilingthisappealbelatedlywithITAT beyondthetimestipulatedu/s253(3),anddelayneedstobe condonedandtheappealbeheardonmerits.When technicalitiesarepittedagainstthesubstantialjustice,the Courtswillleantowardsadvancementofsubstantialjustice ratherthantechnicalities,unlessthemalafideonthepartof theassesseeisatwritlarge.Underthefactsand circumstances,wedonotfindanymalafideonthepartofthe assesseeinfilingthisappealbelatedly,andintheinterestof I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 4 justice,wecondonethedelayof9daysandproceedto adjudicatethisappealonmeritsinaccordancewithlaw. ReferenceisdrawntothedecisionofHon’bleSupremeCourt inthecaseofCollectorofLandAcquisition,Anantnagv. Mst.Katiji(1987AIR1353(SC)). 3.ThegroundsofappealraisedbytheassesseeinMemoof AppealfiledwiththeITAT,AhmedabadBench,Ahmedabad, readsasunder:- 1)TheLearnedCommissionerofIncomeTax(Appeals)has erredinlawandonfactsofthecaseinsustainingthe disallowanceofdeductionu/s.80P(2)(d)oftheIncomeTax Act,1961. 2)Theappellantcravesleavetoadd,amend,alterordelete thegroundsofappealatthetimeofhearing,ifneedarises.” 4.Thebrieffactsofthecasearethatthecaseoftheassessee wasselectedbyRevenueforframinglimitedscrutinythrough CASS.Reasonsforselectingthecaseoftheassesseefor framinglimitedscrutinyassessmentarespecifiedbytheAOin itsassessmentorderatpageno.1and2.Oneofthereasonfor selectionofcaseforlimitedscrutinyassessment,andwhichis relevantforusinthisappeal,wasthedeductionfromTotal Income(ChapterVI-Adeductions)claimedbytheassesseein itsreturnofincomefiledwiththeRevenue.Theassesseeis Co-operativesocietyhavingfileditsreturnofincomeon I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 5 29.10.2018declaringNilIncomeafterclaimingdeductionu/s 80PtothetuneofRs.37,16,371/-.TheAOissuedstatutory noticesu/s143(2)and142(1),duringthecourseof assessmentproceedings.Theassesseefileditsreply,during thecourseofassessmentproceedings.TheAOwhileframing assessmentmadeadditionstothetuneofRs.2,55,000/-by denyingthedeductionu/s80Pwithrespecttointerest receivedbytheassesseefromTheSabarkanthaDistrict CentralCo-operativeBank,Khedbrahma. 5.Aggrieved,theassesseefiledfirstappealwithld.CIT(A), whichstooddismissedbyLd.CIT(A)bymainlyrelyingonthe judgmentandorderofHon’bleSupremeCourtinthecaseof TheTotgarCo-operativeSaleSocietyLimitedv.ITO(2010)188 Taxmann282(SC) .However,theld.CIT(A)observedthatthe assesseeisentitledfordeductionofpro-rataexpensesu/s57, byrelyingontheorderofITAT,AhmedabadinThe Uttar GujaratUmaCo-operativeCreditSocietyLimitedv.ITOinITA No.1670&1671/Ahd/2018. 6.Stillaggrieved,theassesseehasnowfiledsecondappeal withtheTribunal,andthelearnedcounselfortheassessee reliedupontheappellateorderdated27.10.2023passedby ITAT,AhmedabadBench,AhmedabadinITAno. 499/Ahd/2022initsowncaseforimmediatelypreceding I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 6 assessmentyeari.e.2017-18,readwithCorrigendumdated 20.03.2024,inwhichoneofusbeingHon’bleJudicialMember ispartoftheDivisionBenchwhopronouncedthesaidorder. Theld.Counselfortheassesseealsorelieduponthe AhmedabadSMCBenchorderinthecaseof KalolCo-operative CreditandSupplySocietyLimitedv.ITOinITAno. 135/Ahd/2024andITANo.267/Ahd/2024,dated18.07.2024, inwhichoneofusbeingHon’bleAccountantMemberwasthe MemberofSMCwhopronouncedthesaidorder.Itisalso submittedthattheAhmedabadTribunalinseveralcaseshave decidedthisissueinfavouroftheassessee,relyingonthe judgment(s)andorder(s)ofHon’bleGujaratHighCourtinthe caseofSBIv.CIT,reportedin(2016)389ITR578(Guj),Surat VankarSahkariSanghLimitedv.ACIT,reportedin(2016)72 taxmann.com169(Guj.)andKatlaryKariyanaMerchantSahkari SarafiMandaliLimited,reportedin(2022)140taxmann.com 602(Guj.) whichjudgmentandorderin Katlary (supra)stood modifiedbytheorderofHon’bleGujaratHighCourtvideorder inMAdated26.04.2024inR/SpecialCivilApplicationNo. 20585of2019.ItissubmittedthattheassesseeisaCredit Co-operativesocietyandiseligiblefordeductionu/s.80P(2)(d) oftheAct,withrespecttointerestreceivedfromdepositswith Co-operativeBanks. I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 7 6.2TheSr.Ld.D.R.ontheotherhandreliedupontheorders ofauthoritiesbelow,andprayedthattheappellateorderofld. CIT(A)beconfirmed. 7.Wehaveconsideredrivalcontentionsandperusedthe materialonrecord.Thesolitaryissueinthisappealwhichhas arisenforouradjudicationiswithrespecttoallowabilityof deductionofRs.2,55,000/-u/s.80P(2)(d)ofthe1961Act, withrespecttointerestreceivedbytheassesseefromtheCo- operativeBanki.e.TheSabarkanthaDistrictCentralCo- operativeBank,Khedbrahma.Theissuebeforeusisof deductionofinterestondepositsearnedbyCreditCo- operativesocietyfromdepositswithCo-operativeBankswhich isnomoreresintegra,astheHon’bleJurisdictionalHigh CourtinthecaseofSuratVankarSahakariSanghLtd.v.ACITreported in(2016)72taxmann.com169(GujHC)andStateBankofIndiav.CIT reportedin(2016)72taxmann.com64(GujHC)hasdecidedthisissue infavourofthetax-payerbyholdingthatinterestincome receivedbyCreditCo-operativeSocietyfromdepositsmade withCo-operativeBankregisteredundertheCo-operative SocietiesActorundertheStateAct,shallbeallowedas deductionu/s80P(2)(d),andtheITATinseveralcaseshas alreadydecidedthisissueinfavourofthetax-payer, includinginthecaseoftheassesseeitselfforimmediately precedingassessmentyeari.e.2017-18inITANo. I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 8 499/Ahd/2022,dated27.10.2023readwithCorrigendum dated20/03/2024,inwhichoneofusbeingHon’bleJudicial MemberwaspartoftheDivisionBenchwhopronouncedthe saidorder,aswellinthecaseofTheSardarPatelCo-operative CreditSocietyLtd.v.ACIT (ITAno.525&526/Ahd/2023vide orderdated02.04.2024)inwhichoneofusbeingHon’ble AccountantMemberwaspartoftheDivisionBenchwhich decidedtheissueinfavouroftheassessee.,byholdingas under(ITANo.525&526/Ahd/2023):- “7.Wehaveconsideredrivalcontentionsandperusedthe materialonrecord.Wehaveobservedthattheassesseeis Co-operativeCreditSocietyengagedinprovidingcredit facilitytoitsmembers.Thecaseoftheassesseewas selectedbyRevenueforframinglimitedscrutiny assessmentunderCASS. *** 7.2Theassesseehasalsoclaimeddeductionu/s80P(2)(d) ofRs.1,62,24,334/-towardsinterestearnedfrom depositsmadewithCo-operativebanks,detailed hereunder: Sr. No. NameofBankInterest receipt (Rs.l I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 9 1.Interestincome fromMehsana UrbanCo-op.Bank Ltd. 1,59,13,24 6/- 2.Interestincome fromKukarwada NagrikBankLtd 3,02,706/- 3.Interestincome fromMehsanaDist. Bank 159/- 4.InterestIncome fromVijapur NagarikSahakari BankLtd. 31.168/- TheAOhasdeniedthedeductionu/s80P(2)(d)tothe assesseebyfollowingthedecisionofHon’bleKarnataka HighCourtinthecaseofPCITv.TotgarCo-operativeSale Society(supra),whileld.CIT(A)hadallowedthededuction byfollowingthedecisionofITAT,AhmedabadBenchin theassessee’sowncaseforassessmentyear2016-17. Thetribunalwhileallowingtheclaimoftheassesseefor assessmentyear2016-17(immediatelypreceding assessmentyear)hasfollowedthedecision(s)ofHon’ble GujaratHighCourtinthecaseofStateBankofIndiav. CIT,reportedin(2016)389ITR578(Guj.)andSurat VankarSahakariSanghLimitedv.ACIT,reportedin (2016)72taxmann.com169(Guj).TheTribunalinITANo 1404/Ahd/2019inassessee’sowncaseforassessment I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 10 year2016-17allowedtherelieftotheassessee,by holdingasunder: “5.1Theissueforconsiderationbeforeusiswhether theassesseeiseligibletoclaimdeductiononinterest earnedfromCo-OperativeBanksu/s80P(2)(d)ofthe Act.TheHon’bleGujaratHighCourtinthecaseof StateBankofIndiaVs.CIT(2016)389ITR578(Guj), heldthatthattheinterestincomeearnedbyaco- operativesocietyonitsinvestmentsheldwitha cooperativebankwouldbeeligibleforclaimof deductionunderSec.80P(2)(d)oftheAct.The HonourableGujaratHighCourtmadefollowing observationsinrespectofinterestearnedfrom depositskeptwithacooperativebank: Therefore,itisonlytheinterestderivedfromthe creditprovidedtoitsmemberswhichis deductibleundersection80P(2)(a)(i)oftheAct andtheinterestderivedbydepositingsurplus fundswiththeStateBankofIndianotbeing attributabletothebusinesscarriedonbythe appellant,cannotbedeductedundersection 80P(2)(a)(i)oftheAct.Iftheappellantwantsto availofthebenefitofdeductionofsuchinterest income,itisalwaysopenforittodepositthe surplusfundswithaco-operativebankand availofdeductionundersection80P(2)(d)ofthe Act. 5.2InthecaseofSuratVankarSahakariSanghLtd. vAssistantCommissionerofIncome-tax[2016]72 taxmann.com169(Gujarat),theGujaratHighCourt I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 11 heldassessee-co-operativesocietywaseligiblefor deductionundersection80P(2)(d)inrespectofgross interestreceivedfromcooperativebankwithout adjustinginterestpaidtosaidbank. 5.3InthecaseofSurendranagarDistrictCo-op.Milk ProducersUnionLtd.vDeputyLd.CIT(A)111 taxmann.com69(RajkotBench)theITATheldthat assessee-co-operativesocietycouldnotclaimbenefit ofsection80P(2)(d)inrespectofinterestearnedbyit fromdepositsmadewithnationalised/privatebanks, however,saidbenefitwasavailableinrespectof interestearnedondepositsmadewithco-operative bank. 5.4InthecaseofPr.CommissionerofIncomeTax andAnr.Vs.TotagarsCooperativeSaleSociety(2017) 392ITR74(Karn),theKarnatakaHighCourthas heldthattheinterestincomeearnedbyacooperative societyonitsinvestmentsheldwithaco-operative bankwouldbeeligibleforclaimofdeductionunder Sec.80P(2)(d)oftheAct. 5.5Respectfully,followingthedecisionofHonourable HighCourtofGujaratandothercasescitedabove,in ourview,interestearnedbytheassesseeonsurplus heldwithcooperativebankswouldbeeligiblefor deductionunderSec.80P(2)(d)oftheAct. 6.Intheresult,theappealoftherevenueis dismissed.” I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 12 RespectfullyfollowingtheaforesaiddecisionofITAT, AhmedabadBench(whichhasfollowedthedecisionof jurisdictionalHighCourt),inassessee’sowncase,for assessmentyear2016-17whichisimmediatelypreceding year,andinordertomaintainconsistency,weallowthe claimoftheassesseefordeductionu/s80P(2)(d)with respecttointerestincomeearnedfromCo-operativeBanks. However,noneoftheauthoritiesbelowhavegivena findingthatthesefourentitiesfromwhomtheinterest incomeisearnedbytheassesseeareCo-operativeBanks whichareco-operativesocietiesdulyregisteredunderthe Co-operativeSocietiesActorundertheStateActandto thislimitedextentwearedirectingAOtoverifythefacts beforegrantingrelieftotheassessee.Whileallowingthe claimoftheassessee,wenotethatprinciplesofres judicatearenotapplicabletotheincometaxproceedings, butprinciplesofconsistencyistobemaintained. ReferenceisdrawntothedecisionofHon’bleSupreme CourtinthecaseofRadhasoamiSatsangv.CIT,reported in(1992)193ITR321(SC).Theassesseesucceedsonthis issueinthemannerasindicatedabove.Weorder accordingly.” TheHon’bleGujaratHighCourtinthecaseof KatlaryKariyana MerchantSahkariSarafiMandaliLtd.v.ACIT,reportedin(2022)140 taxmann.com602(Guj.HC)videorderdated04.01.2022has decidedtheissueinfavourofRevenue,butbyorderinMA dated26.04.2024inR/SpecialCivilApplicationNo.20585of2019, theaforesaidorderdated04.01.2022wasmodifiedbyHon’ble GujaratHighCourt,andthisissuestooddecidedinfavourof thetax-payer.SimilarviewhavebeentakenbytheBenchesof I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 13 ITAT,Ahmedabadinthecaseofothertax-payersincluding decisionofITAT,AhmedabadSMCBench,inthecaseofThe KalolCo-operativeCreditandSupplySocietyLimitedinITAno. 135/Ahd/2024andITANo.267/Ahd/2024,videorderdated 18.07.2024 ,inwhichoneofusbeingHon’bleAccountant MemberwasthememberofSMCBenchwhopronouncedthe saidorders.We,thusdecidethisissueinfavourofthe assesseethatinterestincomeearnedfromdepositswithCo- operativeBanksshallbeallowedasdeductionu/s80P(2)(d). However,similardirectionsasweregivenbyDivisionBenchin theappellateorderinthecaseofSardarPatelCo-operative CreditSocietyLimited(ITANo.525&526/Ahd/2023) arenow givenbyustotheAOtoverifythattheentityfromwhomthe interestincomeofRs.2,55,000/-isclaimedtohavebeen earnedbytheassesseenamelyTheSabarkanthaDistrict CentralCo-operativeBank,Khedbrahmawhichisclaimedto beaCo-operativesocietiesisdulyregisteredundertheCo- operativeSocietiesActorundertheStateAct,andtothis limitedextent,wearedirectedAOtoverifythefactsbefore grantingrelieftotheassessee.Theappealoftheassesseeis allowedasindicatedabove.Weorderaccordingly 8.Intheresult,appealoftheassesseeinITAno. 115/Ahd/2023forassessmentyear2018-19isallowedas indicatedabove. I.T.ANo.115/Ahd/2023A.Y.2018-19PageNo. TheKhedbrahmaTalukaPrimaryTeachersCo.OperativeCreditSocietyltd.v.ITO 14 9.OrderpronouncedinaccordancewithRule34(4)ofthe IncomeTaxAppellateTribunalRules,1963atAhmedabadon 01.08.2024. Sd/-Sd/- (TRSenthilKumar)(RAMITKOCHAR) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad:Dated01/08/2024 आदेशकीप्र्ि्िअगे्ेर/CopyofOrderForwardedto:- 1.Assessee 2.Revenue 3.ConcernedCIT 4.CIT(A) 5.DR,ITAT,Ahmedabad 6.Guardfile. Byorder/आदेशसे, उि/सहायकिंजीकार आयकरअिीिीयअ्िकरण, अहमदाबाद