DCIT, Bangalore V. M/s ITI Employees Union Co-Op Credit Society, Bangalore

ITA 1169/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8628 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-01-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 03-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.1169/B/2016 ASSESSMENT YEAR : 2012-13 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(2)(1), BENGALURU. VS. M/S. ITI EMPLOYEES UNION CO- OPERATIVE CREDIT SOCIETY, NORTH AVENUE, DOORVANINAGAR, BENGALURU 560 016. PAN : AAAAI0333H APPELLANT RESPONDENT REVENUE BY : SHRI. M. K. BIJU, JCIT ASSESSEE BY : SHRI. SANDEEP C , CA DATE OF HEARING : 17.1.2017 DATE OF PRONOUNCEMENT : 20.1.2017 O R D E R PER GEORGE GEORGE, JUDICIAL MEMBER THIS APPEAL AT INSTANCE OF THE REVENUE IS DIRECTED AGAINST CIT(A)S ORDER DATED 18.03.2016. THE RELEVANT ASSESSMENT Y EAR IS 2012 2013. ITA NO.1169/B/2016 PAGE 2 OF 4 2. THE SOLITARY ISSUE THAT ARISES FOR OUR CONSIDERA TION IS WHETHER THE CIT(A) IS JUSTIFIED IN GRANTING DEDUCTION UNDER SEC TION 80P(2) OF ACT TO THE ASSESSEE SOCIETY. 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS : THE ASSESSEE IS A CO-OPERATIVE SOCIETY ENGAGED IN T HE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS. FOR TH E AY 2012-13, THE RETURN OF INCOME WAS FILED ON 15.9.2012 DECLARING NIL INCOM E AFTER CLAIMING DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ENTIRE PROFITS OF RS.71,58,598/-. THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED VIDE ORDER DATED 6.3.2015. THE AO HELD THAT PROVISIONS OF SECTION 8 0P(4) ARE ATTRACTED IN THE INSTANT CASE AS THE ASSESSEES ACTIVITY OF GRANTING FINANCIAL CREDIT CONSTITUTES INCOME FROM BANKING AND WAS NOT ENTITLED TO THE DED UCTION U/S 80P(2). 4. AGGRIEVED BY THE DENIAL OF THE BENEFIT U/S 80P(2 ), THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORIT Y. THE CIT(A), FOLLOWING THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. VILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA (369 ITR 86) AND THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FO R AY 2009-10, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND DIRECTED TH E AO TO GRANT BENEFIT OF DEDUCTION U/S 80P(2) OF THE ACT. THE RELEVANT FIND ING OF THE CIT(A) READS AS FOLLOWS: IT IS APPARENT FORM THE ABOVE DISCUSSION THAT THE HONBLE ITAT, BANGALORE, IN ASSESSEES OWN CASE, (IN ITS OR DER DATED 14.08.2015 FOR A.Y. 2009-10 IN ITA NO.659/BANG/2014 ) HAS QUASHED THE ORDER U/S. 263 DATED 27.03.2014, IN PUR SUANCE TO WHICH THE ORDER OF ASSESSMENT U/S. 143(3) R.W.S. 26 3 WAS PASSED BY ITA NO.1169/B/2016 PAGE 3 OF 4 THE AO IN RESPECT OF PRECEDING A.Y. 2009-10. THE H ONBLE ITAT, IN ITS ORDER HAS HELD THAT SECTION 80P(4) IS APPLIC ABLE ONLY TO CO- OPERATIVE BANKS AND NOT TO CREDIT CO-OPERATIVE SOCI ETIES AND THAT THE APPELLANT WAS NOT A CO-OPERATIVE BANK, AS ENVIS AGED IN SECTION 80P(4). THE ITAT THEREFORE, HELD THAT THE ASSESSEE WAS ENTITLED TO THE CLAIM MADE U/S. 80P(2)(A)(I). RELI ANCE HAS ALSO BEEN PLACED BY THE ITAT, ON THE DECISION OF THE KAR NATAKA HIGH COURT IN THE CASE OF CIT V. BILURU GURUBASAVA PATTI NA SAHAKARI SANGHA NIYAMITHA (369 ITR 86). IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ISS UE HAVING BEEN DECIDED IN PRINCIPLE, IN THE FAVOUR OF THE ASS ESSEE, IN ITS OWN CASE BY THE ITAT, BANGALORE, THE DISALLOWANCE OF RS .71,58,598/- ON REJECTION OF ASSESSEES CLAIM U/S. 80P(2)(A)(I) OF THE I.T. ACT, IS DELETED. 5. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. AT THE VERY OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THE ISSUE IN QUESTION IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN TH E ASSESSEES OWN CASE FOR AY 2009-10 WHICH HAD IN TURN FOLLOWED THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. V ILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA (SUPRA). THE LEARNED DR PRESENT WAS DULY HEARD. 6. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED T HE MATERIAL ON RECORD. IT IS ADMITTED THAT THE ISSUE IN QUESTION IS COVERED IN FAVOUR OF ASSESSEE BY THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. VILURU GURUBASAVA PATTINA SAHAKARI SANGHA N IYAMITHA (SUPRA) AND THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FO R AY 2009-10. FOLLOWING THE ABOVE TWO JURISDICTIONAL PRONOUNCEMENTS, WE HOL D THAT ASSESSEE IS NOT CO-OPERATIVE BANK AND PROVISIONS OF SECTION 80P(4) OF THE ACT WILL NOT HAVE APPLICATION TO THE FACTS OF THE INSTANT CASE. THER EFORE, ORDER OF THE CIT(A) GRANTING THE BENEFIT OF DEDUCTION UNDER SECTION 80P (2) IS CORRECT IN ITA NO.1169/B/2016 PAGE 4 OF 4 ACCORDANCE WITH THE LAW AND NO INTERFERENCE IS CALL ED FOR. IT IS ORDERED ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-1-2017. SD/- SD/- (INTURI RAMA RAO) (GEORGE GEOR GE K) ACCOUNTANT MEMBER JUD ICIAL MEMBER BANGALORE. DATED: 20 TH JANUARY, 2017. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.