M/s. Hubli Taluka Primary School Teachers Co-operative Society, Hubli V. Income Tax Officer, Ward -1(3), Hubli

ITA 1354/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8502 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 31-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHANDRASHEKAR R. DAVALAGI
• Keywords: Reasonable cause; Set aside
• Section: 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC A BENCH : BANGALORE ` BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT ITA NO. 1354/ BANG / 2019 ASSESSMENT YEAR : 2 016 - 17 HUBLI TALUKA PRIMARY SCHOOL TEACHERS CO-OPERATIVE SOCIETY, BAKALE GALLI, GANESHPETH, HUBLI 580 020. PAN: AABAH 3916N VS. THE INCOME TAX OFFICER, WARD 1(3), HUBLI. APPELLANT RESPONDENT APPELLANT BY : SHRI CHANDRASHEKAR R. DAVALAGI, FCA RESPONDENT BY : SHRI GANESH R. GHALE , STANDING COUNSEL FOR DEPT. DATE OF HEARING : 13 . 0 7 .20 20 D ATE O F PRONOUNCEMENT : 13 . 0 7 .20 20 O R D E R THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORD ER DATED 27.03.2019 OF THE CIT(APPEALS), HUBBALLI, RELATING TO ASSESSME NT YEAR 2016-17, 2. THE ASSESSEE IS A CO-OPERATIVE SOCIETY PROVIDI NG CREDIT FACILITIES TO ITS MEMBERS. IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE AY 2016-17, THE ASSESSEE CLAIMED DEDUCTION U/S. 80P(2) (A)(I) OF THE INCOME- TAX ACT, 1961 [THE ACT] OF A SUM OF RS.47,96,497 AND RS.43,220 U/S. 80P(2)(D) OF THE ACT. 2. WITH REGARD TO DEDUCTION CLAIMED U/S. 80P(2)(A)( I) OF THE ACT, THE AO CALLED UPON THE ASSESSEE TO FURNISH THE DETAILS OF THE MEMBERS TO WHOM CREDIT FACILITIES WERE EXTENDED BY THE ASSESSEE AND TO VERIFY AS TO WHETHER THE ASSESSEE DEALT ONLY WITH ITS MEMBERS SO AS TO B E ELIGIBLE TO CLAIM ITA NO.1354/BANG/2019 PAGE 2 OF 3 DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CITIZEN CO-OPERATIVE SOCIETY LTD. V. ACIT [2017] 84 TAXMANN.COM 114 [SC]. SIMILARLY WITH REFERENCE TO DEDUCTION U/S. 80P(2)(D) OF THE ACT, THE AO WAS OF THE VIEW THAT SURPLUS FUNDS OF THE ASSESSEE WERE INVESTED IN BANKS AND TH EREFORE THE INCOME WAS TO BE ASSESSED UNDER THE HEAD INCOME FROM OTHE R SOURCES AND SINCE INCOME WAS DERIVED FROM BUSINESS OF THE ASSESSEE, D EDUCTION 80P(2)(D) OF THE ACT WAS TO BE DENIED. 3. THE AO COMPLETED THE ASSESSMENT SINCE PROPER DET AILS WERE NOT FURNISHED BY THE ASSESSEE AND DENIED CLAIM FOR DEDU CTION AS MADE BY THE ASSESSEE IN ITS RETURN OF INCOME. 4. BEFORE THE CIT(APPEALS), THE ASSESSEE SOUGHT TO FILE THE DETAILS WITH REGARD TO ITS MEMBERSHIP AND CLAIMED THAT IT WAS EN TITLED TO DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. THE CIT(A) IN PARA 5 OF H IS ORDER TOOK THE VIEW THAT THE ASSESSEE WAS UNABLE TO GIVE A REASONABLE CAUSE THAT PREVENTED IT FROM SUBMITTING THE DETAILS DURING THE REGULAR ASSESSMEN T PROCEEDINGS LIKE DETAILS OF REGULAR AND NOMINAL MEMBERS, ETC. THE C IT(APPEALS) THEREFORE CONFIRMED THE ORDER OF THE AO. 5. IN THIS APPEAL BEFORE THE TRIBUNAL, THE ONLY GRO UND RAISED BY THE ASSESSEE IS WITH REGARD TO DENIAL OF DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. 6. THE PRIMARY CONTENTION OF THE LD. COUNSEL FOR TH E ASSESSEE IS THAT THE INCOME WAS EARNED ONLY FROM PROVIDING CREDIT FACILI TIES TO MEMBERS AND THAT THE ASSESSEE DID NOT HAVE OPPORTUNITY OF GIVING THE DETAILS IN THIS REGARD. THE LD. DR RELIED ON THE ORDER OF CIT(APPEALS). 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, I AM OF THE VIEW THAT THE QUESTION WITH REGARD TO DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT HAS TO BE EXAMINED AFRESH BY THE AO IN THE LIGHT OF THE DETAI LS WITH REGARD TO THE BYE- ITA NO.1354/BANG/2019 PAGE 3 OF 3 LAWS OF THE ASSESSEES SOCIETY, PROVISIONS OF KARNA TAKA STATE CO-OPERATIVE SOCIETIES ACT AND OTHER RELEVANT FACTS AND CIRCUMST ANCES. IT IS ONLY IN THE LIGHT OF THESE AVAILABLE DETAILS THAT THE PRINCIPLE LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CITIZEN CO-OPERATIVE SOCIETY LTD. (SUPRA) CAN BE EXAMINED. I THEREFORE SET ASIDE THE ORDER OF CI T(APPEALS) AND REMAND THE ISSUE OF DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT TO THE AO FOR FRESH DECISION, AFTER AFFORDING OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE ALL THE REQUIRED DETAI LS ALONG WITH ENGLISH TRANSLATION BEFORE THE AO. 8. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF JULY, 2020. SD/- ( N.V. VASUDEVAN ) VICE PRESIDENT BANGALORE, DATED, THE 13 TH JULY, 2020. / DESAI SMURTHY / 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.