M/s. Lalitamba Pattina Souharda Sahakari Niyamita, Gadag V. Principal Commissioner Of Income Tax, Hubballi

ITA 1196/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4455 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-02-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUZAFFAR HUSSAIN BENGALURU
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Co-operative Credit Society; Set aside
• Section: 143(3); 80P; 2(19); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN , ACCOUNTANT MEMBER IT A NO. 1196/BANG/2019 ASSESSMENT YEAR : 2014 - 15 M/S LALITAMBA PATTINA SOUHARDA SAHAKARI NIYAMITHA, VIVEKANANDA ROAD, BEHIND PRASAD NURSING HOME, GADAG 582 101. PAN: AAATL 5716G VS. THE PRINCIPAL COMMISSIONER OF INCOME TAX. HUBBALLI. APPELLANT RESPONDENT APPELLANT BY : SHRI S.V. RAVISHANKAR, ADVOCATE RESPONDENT BY : MR. MUZAFFAR HUSSAIN, CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 17 .0 2 .2020 DATE OF PRONOUNCEMENT : 26 .0 2 .2020 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 27.3.2019 OF THE PRINCIPAL CIT, HUBBALLI [PR.CIT] PASSED U/S. 263 OF THE INCOME-TAX ACT, 1961 IN RELATION TO ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE IS A CO-OPERATIVE CREDIT SOCIETY R EGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 AND IS ENGAGE D IN THE ACTIVITY OF ACCEPTING DEPOSITS AND PROVIDING CREDIT FACILITIES TO ITS MEMBERS. FOR THE AY 2014-15, THE ASSESSMENT WAS COMPLETED BY THE AO IN WHICH DEDUCTION ITA NO.1196/BANG/2019 PAGE 2 OF 4 U/S. 80P WAS ALLOWED. THE ORDER OF ASSESSMENT U/S. 143(3) WAS PASSED ON 25.11.2016. 3. THE PR.CIT WAS OF THE VIEW THAT THE AFORESAID OR DER OF AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE BECAUSE THE AO HAD ALLOWED DEDUCTION TO THE ASSESSEE U/S. 80P OF THE A CT. ACCORDING TO THE PR. CIT, THE SOCIETY REGISTERED UNDER THE KARNATAKA STA TE SAHAKARI SOUHARDA ACT, 1997 CANNOT BE REGARDED AS A CO-OPERATIVE SOCI ETY ENTITLED TO BENEFIT OF DEDUCTION U/S. 80P(2) OF THE ACT. ACCORDINGLY, A SHOW CAUSE NOTICE DATED 30.11.2012 WAS ISSUED BY THE PR. CIT U/S. 263 OF THE ACT. AFTER RECEIVING REPLY FROM THE ASSESSEE HE SET ASIDE THE ORDER OF ASSESSMENT AND DIRECTED THE AO TO PASS A FRESH ASSESSMENT ORDE R AFTER DUE OPPORTUNITY TO THE ASSESSEE. FOLLOWING ARE THE RELEVANT CONCLU SIONS OF THE CITA:- 8. IN VIEW OF THE ABOVE, THE ASSESSEE CANNOT CLAI M DEDUCTION U/S 80P, IN THE ABSENCE OF REGISTRATION UNDER THE K ARNATAKA CO- OPERATIVE SOCIETIES ACT. THE IMPUGNED ORDER ALLOWIN G DEDUCTION U/S 80P, IS ERRONEOUS AND PREJUDICIAL TO THE INTERE STS OF THE REVENUE. RELIANCE IS PLACE ON THE DECISION OF C B ENCH ITAT, IN ITA 2831/BANG/2017 DATED 17/08/2018 IN THE CASE OF M/S UDAYA SOUHARDA CREDIT CO-OPERATIVE SOCIETY LTD VS I TO W- 5(2)(4) BANGALORE. 9. IN VIEW OF THE FOREGOING, I HAVE NO HESITATION T O COME TO THE CONCLUSION THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) ON 25/11/2016 IS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE AND AS SUCH, UNDER THE POWERS VESTED IN ME, UNDER SECTION 263 OF THE INCOM E TAX ACT, 1961, THE SAID ASSESSMENT ORDER IS SET ASIDE WITH A DIRECTION TO THE ASSESSING OFFICER TO PASS A FRESH ASSESSMENT ORDER, AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 4. AGGRIEVED BY THE AFORESAID ORDER DATED 27.3.2019 OF THE PR. CIT, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.1196/BANG/2019 PAGE 3 OF 4 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE PRIMAR Y REASON FOR THE CIT TO PASS THE IMPUGNED ORDER IS THE DECISION OF T HE ITAT BANGALORE BENCH IN THE CASE OF UDAYA SOUHARDA CREDIT CO-OPERATIVE SOCIETY LTD. (SUPRA) IN WHICH IT WAS HELD THAT REGISTRATION UNDER THE K ARNATAKA CO- OPERATIVE SOCIETIES ACT IS NECESSARY TO CLAIM DEDUC TION U/S. 80P OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS, HOWEVER, BROU GHT TO OUR NOTICE THAT THAT THE HONBLE HIGH COURT OF KARNATAKA IN WP NO.4 8414/2018 IN THE CASE OF SWABHIMANI SOUHARDA CREDIT LTD. V. GOI & ORS. IN ITS ORDER DATED 16.1.2020 HAD TO DECIDE THE FOLLOWING QUESTION OF L AW:- WHETHER AN ENTITY REGISTERED UNDER THE KARNATAKA S OUHARDA SAHAKARI ACT , 1997 FITS INTO THE DEFINITION OF CO- OPERATIVE SOCIETY AS INDICATED BY SECTION 2(19) OF THE INCOME-TAX ACT , 1961 FOR THE PURPOSE OF SECTION 80P THEREOF? 6. THE COURT ANSWERED THE AFORESAID QUESTION IN THE AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE. IN VIEW OF THE AFORESAID D ECISION, WE ARE OF THE VIEW THAT THE ORDER OF PR. CIT U/S. 263 REQUIRES TO BE SET ASIDE AND REMANDED TO THE PR. CIT FOR FRESH CONSIDERATION IN THE LIGHT OF THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA REFERRED TO ABOVE. 7. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF FEBRUARY, 2020. SD/- SD/- ( B R BASKARAN ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE PRES IDENT BANGALORE, DATED, THE 26 TH FEBRUARY, 2020. / DESAI S MURTHY / ITA NO.1196/BANG/2019 PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FIL E BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.