M/s. The State Bank Employee's Co-operative Credit Society Limited, Bangalore V. Principal Commissioner Of Income Tax, Bangalore

ITA 1204/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4690 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-02-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 27-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SHRIC. RAMESH
• Keywords: Revision of order; Set aside
• Section: 263; 63; 143(3); 142(1); 80P; 201; 143(2); 13; 119; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO S . 1203 & 1204 /BANG/201 9 (ASSESSMENT YEAR: 201 4 - 15 & 2015 - 16 ) THE STATE BANK EMPLOYEES CO - OPERATIVE CREDIT SOCIETY LTD., SBM MAIN BRANCH PREMISES, NO.1, AVENUE ROAD, BANGALORE - 560 001 .APPELLANT PAN AADAT 3173B VS. PR . COMMISSIONER OF INCOME TAX, BANGALORE - 5, B ANGALORE. RESPONDENT. ASSESSEE BY: SHRI C. RAMESH,C.A. REVENUE BY: MS. NEERA MALHOTRA, CIT (D.R) DATE OF HEARING : 20.02 .20 20 DATE OF PRONOUNCEMENT : 24 .02. 20 20 O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST DIFFERENT ORDERS OF PR.CIT, BANGALORE - 5 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1 961 ('THE ACT').SINCE THE ISSUES ARE IDENTICAL AND SIMILAR, THEY A RE CLUBBED AND HEARD TOGETHER AND CONSOLIDATED ORDER IS PASSED. FOR THE SAKE OF CONVENIENCE, WE SHALL TAKE UP THE 2 ITA NOS.1203 & 1204/BANG/2019 APPEAL ITA NO.1203/BANG/2019 AND THE FACTS NARRATED THEREIN. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 2. THE ASSES SEE IS A S OCIETY R EGI STERED UNDER KARNATAKA SOCIETIES ACT. THE MEMBERSHIP OF THE SOCIETY IS FOR THE STAFF OF STATE BANK OF MYSORE AND OUTSIDERS ARE NOT ELIGIBLE TO BECOME MEMBERS, AND THE AMOUNT COLLECTED BY THE SOCIETY IS UTILIZED FOR THE BENEFIT OF THE EMPLOYEES . THE ASSESSE FILED THE RETURN OF INCOME ON 9.10.2014 WITH TOTAL INCOME RS NIL AFTER CLAIMING DEDUCTION U/SEC80P OF THE ACT . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE UNDER SE CTION 143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIO NNAIRE WERE ISSUED. IN 3 ITA NOS.1203 & 1204/BANG/2019 COMPLIANCE, THE LEARNED AUTHORIZED REPRESENTATIVE APPEARED FROM TIME TO TIME AND SUBMITTED T H E DETAILS AND THE R ETURN OF INCOME WAS ACCEPTED. SUBSEQUENTLY , REVISION NOTICE UNDER SECTION 2 63 OF THE ACT WAS ISSUED , THAT NO ENQUIRY WAS CONDUCTED IN RESPECT OF DETAILS SUBMITTED BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER HAS FAILED TO EXAMINE THE ALLOW ABILITY OF DEDUCTION UND ER SECTION 80P OF THE ACT. THE ASSESSEE HAS FILED REPLY WITH DETAILS SUPPORTING THE C LAIM OF DEDUCTION U/SEC 80P OF THE ACT AND OBJECTIONS ON 11.2.2019 REFERRED AT PAGE 3 TO 11 O F THE REVISION ORDER, AND FILED WRITTEN SUBMIS SIONS. THE CONTENTIONS OF THE ASSESSEE, THAT AN ENQUIRY CONDUCTED BY THE A SSESSING OFFICER AND ACCEPTED CLAIM UNDER SECTION 80P OF THE ACT AND RELIED ON JUDICIAL DECISIONS. WHEREAS PR CIT HAS SET ASIDE THE ORDER OF ASSESSING OFFICER AND DIRECT ED THE ASSESSING OFFICER TO MAKE FRESH EXAMINATION OF CLAIM OF DEDUCTION U/SEC80P OF THE ACT AND TO MAKE ENQUIRY IN TO THE NATURE OF INCOME EARNED BY THE AS SESSEE ATTRIBUTABLE TO THE PROVIDING CREDIT FACILITIES TO MEMBERS OF THE SOCIETY AND PASSED R EVISION ORDER UNDER S EC263 OF THE ACT ON 26.03.2019. AGGRIE VED BY THE ORDER PR CIT, THE ASSESSEE HAS FILED AN APPEAL WITH THE TRIB UNAL. 3. THE LEARNED AUTHORIZED REPRESENTATIVES CONTENTIONS ARE THAT THE PRI CIT HAS IGNORED THE DEDUCTION UNDER SECTION 80P OF THE ACT, WHICH WAS EXAMINED IN THE COURSE OF ASSESSMENT PROCEEDINGS . T HE ASSESSING OFFICER HAS MADE ENQU I RIES AND FOR EARLIER ASSESSMENT YEAR S THE EXEMPTION WAS GRANTED . THEREFORE, THE ORDER 4 ITA NOS.1203 & 1204/BANG/2019 PASSED U/ SEC 143 ( 3)OF THE ACT IS NOT ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF R EVENUE AND PRAYED FOR QUASH ING THE ORDERS OF THE PRCIT. CONTRA, THE LEARNED DEPARTMENTAL REPRESENTA TIVE SUPPORTED THE ORDER OF PRCIT AND FILED WRITTEN SUBMI SSIONS AND RELIED ON JUDICIAL DECISIONS , THAT WHEN NO ENQUIRY WAS CONDUCTED BY THE AO, AS PER PROVISIONS OF SECTION 263 OF THE ACT, THE OR DER IS SUBJECT ED TO REVISION AND THE PR CIT HAS ONLY DIRE CTE D FOR FRESH EXAMINATION . 4. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, THE DISPUTED ISSUE IS WITH RESPECT TO SATIS FACTION OF TWIN CONDITIONS FOR REVISION UNDER SECTION 263 OF THE ACT BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE LEARNED AUTHORIZED REPRESENTATIVE HAS EMPHASIZED THAT THE ORDER PASSED BY THE PRIN. CIT IS BAD IN LAW AS IT DOES NOT SATISFY THE TWIN CONDITION S, AND EMPHASIZED THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER SECTION 80P OF THE ACT AND IN THE SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER HAS CONDUCTED ENQUIRIES IN R ESPECT OF INCOME AND CLAIMS. WE ON PERUSA L OF THE ASSESSMENT ORDER, FIND THAT THE ASSESSING OFFICER HAS ISSUED NOTICE UNDE R SECTI ON 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE, BUT THERE ARE NO FINDINGS OR OBSERVATIONS OF THE AS SESSING OFFICER THAT HE HAS CONDUCTED ENQUIRIES IN RESPECT OF INCOME AND CLAIM S MADE BY THE ASSESSEE. IN THE COURSE OF HEARING, THE BENCH WANTED THE LDAR TO FURNISH DETAILS FILED IN RESPONSE TO N OTICE UNDER SECTION 142(1) OF THE ACT AND QUESTIONNAIRE, THE LEARNED AUTHORI ZED REPRESENTATIVE COULD NOT 5 ITA NOS.1203 & 1204/BANG/2019 SUBSTANTIATE WITH MATERIAL EVIDENCES FILED IN THE ASSESSMENT PROCEEDINGS. THE FACT REMAINS THAT THE ORDER PASSED BY THE ASSESSING OFFICER PRIMA FACIE , IS WITHOUT CONDUCT OF ENQUIRY. WE FOUND THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN SMT. M ALINI SUBRAMANIAN VS PRIN. CIT IN ITA NO.935/BANG/2016 DT.27.09.2019 OBSERVED AT PARA 6 , WHICH IS READ AS UNDER : 6 . THE HONBLE SUPREME COURT HAS HELD THAT THE EXISTENCE OF TWIN CONDITIONS, VIZ., THE ASSESSMENT ORDER SHOULD BE ERRONEOUS AND IT SHOULD BE PREJUDICIAL TO THE INTERESTS OF REVENUE, SHOULD BE SHOWN IN THE REVISION ORDER PASSED U/S 263 OF THE ACT. THE HONBL E APEX COURT HAS FURTHER HELD THAT NON - APPLICATION OF MIND ON THE PART OF THE INCOME - TAX OFFICER WOULD MAKE THE ASSESSMENT ORDER ERRONEOUS. IN THE INSTANT CASE, WE NOTICE THAT THE ASSESSING OFFICER DID NOT CONDUCT ANY ENQUIRY AT ALL WITH REGARD TO THE CLAI M OF GOOD WILL MADE BY THE ASSESSEE. THE LD A.R ALSO COULD NOT DEMONSTRATE THAT THE AO DID CONDUCT ENQUIRY AND HAS TAKEN A POSSIBLE VIEW. 5. SIMILARLY, THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF MYSORE MINERALS LIMITED VS. CIT (ITA NO.4 64/B ANG/2014 DT.25.01.2019 OBSERVED AT PAGE 9 PARA 13 READ AS UNDER : 13. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. AT THE OUTSET WE AGREE WITH THE SUBMISSIONS MADE BY THE LD DR THAT IN THE PRESENT CASE, THE CIT HAS NOT EXERCISED J URISDICTION U/S 263 OF THE ACT ON THE GROUND OF NO ENQUIRY MADE BY THE AO OR LACK OF ENQUIRY MADE BY THE AO. THE CIT HAS HELD THAT CONCLUSIONS DRAWN BY THE AO IN ALLOWING EXPENDITURE SET OUT IN THE SHOW CAUSE U/S 263 OF THE ACT OUGHT NOT TO HAVE BEEN A LLOWED AS DEDUCTION. WE, THEREFORE, HOLD THAT THE JURISDICTION U/S 263 OF THE ACT WAS VALIDLY INVOKED BY THE CIT. 6 ITA NOS.1203 & 1204/BANG/2019 PRIMA FACIE, ON APPLYING THE RATIO OF DECISION TO THE PRESENT CASE , WE FIND THAT THE ASSESSING OFFICER COULD NOT CONDUCT ENQUIRY INTO INCOM E AND CLAIMS MADE BY THE ASSESSEE NOR THE ASSESSEE COULD DEMONSTRATE WITH EVIDENCE S THAT THE ASSESSING OFFICER HAS CONDUCT ED THE ENQUIRY. WE FIND AS PER PROVISIONS OF SECTION 263 O F THE ACT EXPLN.2 W.E.F 1.6.2015 IS AS UNDER - SECTION 263 (1) EXPLANATION 1 . EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, ( A ) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; ( B ) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; ( C ) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119 ; OR ( D ) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OTHER PERSON. CONSIDERING THE FACTS AND CIRCUMSTANCES, PROVISIONS OF LAW AND JUDICIAL DECISIONS , WE ARE OF THE OPINION THAT THE ASSESSING OFF ICER HAS PASSED THE ORDER WITHOUT CONDUCTING ENQUIR IES OR VERIFICATIONS, AND THE PR CIT HAS SET ASIDE THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT BY THE ASSESSIN G OFFICER AND DIRECTED THE A.O FOR FRESH EXA MINATION IN RESPECT OF INCOMES AND CLAIMS. ACCO RDINGLY , WE ARE NOT INCLINED TO INTERFERE WITH TH E ORDER OF PRCIT AND OF THE VIEW THAT THERE IS NO INFIRMIT Y IN THE REVISION ORDER OF PR CIT AND UPHELD THE SAME AND DISMISSED THE GROUNDS OF APPEAL OF ASSESSEE. 7 ITA NOS.1203 & 1204/BANG/2019 6. SIMILARLY, FOR THE ASSESSMENT YEAR 2015 - 16, THE FACTS AND ISSUES ARE IDENTICAL . AND THE DECISION HELD IN ITA NO.1203/BANG/2018 FOR THE ASSESSM ENT YEAR 2014 - 15 SHALL APPLY. ACCORDINGLY, THE GROUNDS OF APPEAL OF ASSESSEE FOR THE ASSESSMENT YEAR 2015 - 16 ARE DISMISSED. 7. IN THE RESULT, BOTH TH E APPEALS FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. S D / - S D / - ( CHANDRA POOJARI ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 4 .02 . 20 20 . *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE