ITO, Bagalkot V. M/s Gayatri Sahakar Sangh Niyamit, Bagalkot

ITA 1210/BANG/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95388 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-12-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 04-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: PRATIBHA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE A BENCH, BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.1210(BNG)/2015 (ASSESSMENT YEAR : 2012-13) THE INCOME-TAX OFFICER, WARD-1, BAGALKOT APPELLANT VS M/S GAYATRI SAHAKARI SANGH NIYAMIT, NEAR BANSHANKARI TEMPLE, SULEBHAVI, TQ. HUNGUND. DIST. BAGALKOT RESPONDENT REVENUE BY : DR.P.K.SRIHARI, ADDL.CIT ASSESSEE BY : SMT PRATIBHA, AD VOCATE DATE OF HEARING : 09-12-201 5 DATE OF PRONOUNCEMENT : 11-12-2015 O R D E R PER SHRI INTURI RAMA RAO, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), BELAGAVI DATED 05-06-2015 FOR THE ASSESSMENT YEAR 2 012-13. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APP EAL; 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THE ASSESSEE IS A CO-OPE RATIVE SOCIETY WHICH FULFILLS ALL THE THREE CONDITIONS OF BEING HELD A PRIMARY CO-OP. BANK, AS SPECIFIED IN SEC.5(CCV) OF THE BANKING REGULATION ACT, 1949. 2 ITA NO.1210(B)/2015 2. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE DEFINITION OF A CO-OP.BANK, WHEREI N THE EXPLANATION TO SEC.80P(4) OF THE IT ACT CLARIFIES T HAT THE CO-OP. BANK SHALL HAVE THE MEANING ASSIGNED TO IT IN PART- V OF THE BANKING REGULATION ACT, 1949. 3. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THE ASSESSEE SOCIETY BEI NG A CREDIT CO-OP. SOCIETY WHICH IS ENGAGED IN BANKING BUSINESS IS A PRIMARY CO-OP. BANK WITHIN THE DEFINITION OF SEC.5( CCV) OF THE BANKING REGULATION ACT, 1949 AND AS SUCH, IS NOT EL IGIBLE FOR DEDUCTION U/S 80P(2)(I) OF THE IT ACT, 1961. 4. THE LD. CIT(A) ERRED IN NOT APPRECIATING THEFAC TS OF THE CASE AND ALSO RELYING UPON THEZ DECISION OF THE HIG H COURT OF KARNATAAKA IN CIT VS SRI BILURU GURUBASAVA PATTIN SAHAKARI SANGH NIYAMITT, BAGALKOT IN ITA NO.5006/20 13 DATED 5.2.2014 AND OTHER DECISIONS, IGNORING THE DE CISION OF THE ITAT, PANAJI BENCH. THE HONBLE BENCH IN THE CA SE OF SRI DURDUNDESHWAR WAS URBAN CO-OP.CREDIT SOCIETY LTD. H AS UPHELD THE STAND OF THE DEPARTMENT AND HAS CATEGORI CALLY DISTINGUISHED THE DECISION OF SRI BILURU GURUBASAVA PATTIN SAHAKARI SANGH NIYAMIT, IN VARIOUS CASES OF CO-OP. SOCIETIES. 3. THE ASSESSEE IS A CO-OPERATIVE SOCIETY REGIST ERED UNDER THE PROVISIONS OF KARNATAKA STATE CO-OPERATIVE ACT, 195 9 FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 24-09-201 2, DECLARING THE TOTAL 3 ITA NO.1210(B)/2015 INCOME AT NIL AFTER CLAIMING DEDUCTION A SUM OF RS.26,53,250/- U /S 80P(2)(A)(I) OF THE ACT. AGAINST THE SAID RETURN O F INCOME, THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT, VIDE ORDER DATED 1 8-10-2014 THE AO HAD DISALLOWED THE ASSESSEES CLAIM FOR DEDUCTION U/S 8 0P(2)(A)(I)OF THE ACT AND DETERMINED THE TOTAL INCOME AT RS.26,53,250/-. 4. AGGRIEVED BY THIS ORDER AN APPEAL WAS PREFERRED BEFORE THE LEARNED CIT(A), WHO VIDE IMPUGNED ORDER ALLOWED THE APPEAL FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT, BY HOLDING AS UNDER; 8.2 THE FACT THAT THE ASSESSEE IS A CO-OPERATIVE SOCIETY REGISTERED UNDER THE KARNATAKA CO-OP. SOCIETIES ACT, 1959 ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS HAS BEEN CLEARLY MENTIONED BY THE AO IN PARA-3 OF HIS AFORESAID ASSESSMENT ORDER. IT IS ALSO NOT THE CASE OF THE AO THAT THE ASSESSEE IS REGISTERED WITH THE RBI AS A BANK. IN ITS AFORESAID SUBMISSION DATED 22/05/2015 THE ASSESEE HAS CLEARLY STATED WITH THE HELP OF NECESSARY EVIDENCE AND AN AFFIDAVIT DATED 21/05/2015 TO THIS EFFECT THAT THE ASSESEE IS A CO-OPERATIVE SOCIETY REGISTERED UNDER THE KARNATAKA CO-OP.SOCIETIES ACT, 1959 ENGAGED IN PROVIDING CREDIT FACILITIES ONLY TO ITS MEMBERS AND 4 ITA NO.1210(B)/2015 IT DOES NOT POSSESS ANY BANKING LICENSE FROM THE RBI. IT IS THEREFORE, CLEAR THAT THE ASSESSEES CASE IS SQUARELY COVERED BY THE AFORESAID DECISIONS OF THE JURISDICTIONAL HIGH COURT OF KARNATAKA IN THE CASES OF CIT VS SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA, WHIC H WAS FOLLOWED IN THE CAW OF GENERAL INSURANCE EMPLOY EES COOPERATIVE CREDIT SOCIETY LTD AND KARNATAKA HIGH COURT DECISION IN THE CASE OF VASAVI MULTIPURPOSE SOUHARDA SAHAKARI NIYAMITA, ITA NO. 505/2013 DATED 27/06/2014. THEREFORE, IN VIEW OF THE FOREGOING DISCUSSION AND RESPECTFULLY FOLLOWING THE AFORESAI D DECISIONS OF THE JURISDICTIONAL HIGH COURT OF KARNA TAKA, IT IS HELD THAT THE ASSESSEES CASE IS NOT COVERED BY SECTION 80P(4) AS IT IS NOT A CO-OPERATIVE BANK AND THEREFO RE, IT IS ENTITLED TO THE EXEMPTION U/S 80P(20(A)(I) OF THE IT ACT. 5. BEING AGGRIEVED BY THE AFORESAID ORDER, THE REV ENUE IS IN APPEAL BEFORE US. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARN ED SR.DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSU E IN THIS APPEAL IS NO LONGER RES-INTEGRA, AS THE ISSUE WAS SETTLED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS SRI BILURU GURUBASAVA PATTINA SAHAKARI 5 ITA NO.1210(B)/2015 SANGHA NIYAMITHA AND ALSO IN THE CASE OF VASAVI MU LTIPURPOSE SOUHARDA SAHAKARI NIYAMITA, SUPRA. THE LEARNED CI T(A) FOLLOWED THE AFORESAID DECISIONS WHILE ALLOWING THE APPEAL. TH EREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A) HENCE, WE DISMISS THE APPEAL FILED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 11 TH DECEMBER, 2015. SD/ - (VIJAYPAL RAO) SD/ - (INTURI RAMARAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE D A T E D : 11-12-2015 AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR,ITAT, BANGALORE