ITO-WARD-7(2), Nagpur V. M/S YUVA JAGRUTI SAHAKARI PAT SANSTHA, Nagpur

ITA 141/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1670 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: AMIT SAOJI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER ITA NO. 141/NAG./2014 ( ASSESSMENT YEAR : 2009-10 ) INCOME TAX OFFICER WAD-7(2), MECL BUILDING NAGPUR 440 006 .... APPELLANT V/S M/S. YUVA JAGRUTI SAHAKARI PAT SANSTHA UMRED, DISTRICT NAGPUR 440 203 PAN AAAAY044IN .... RESPONDENT ITA NO. 142/NAG./2014 ( ASSESSMENT YEAR : 2010-11 ) INCOME TAX OFFICER WAD-7(2), MECL BUILDING NAGPUR 440 006 APPELLANT V/S M/S. YUVA JAGRUTI SAHAKARI PAT SANSTHA UMRED, DISTRICT NAGPUR 440 203 PAN AAAAY044IN RESPONDENT ASSESSEE BY : SHRI AMIT SAOJI REVENUE BY : SHRI NARENDRA KANE DATE OF HEARING 22.07.2015 DATE OF ORDER 18.08.20 15 M/S. YUVA JAGRUTI SAHAKARI PAT SANSTHA 2 O R D E R PER BENCH THESES APPEALS FILED BY THE REVENUE, EMANATING FROM TH E ORDERS OF EVEN DATED 6 TH JANUARY 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS)-II, NAGPUR, FOR THE ASSESSMENT YEAR 2009-10 A ND 2010-11, RESPECTIVELY. SINCE COMMON ISSUE INVOLVE, EXCEPT VARIA TION IN FIGURES, IN BOTH THESE APPEALS, THEREFORE, AS A MATTER OF CONVEN IENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WA Y OF THIS CONSOLIDATED ORDER:- GROUND OF APPEAL FOR A.Y. 2009-10 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION UNDER SECTION 80P OF THE ACT OF RS.13,54,799/-? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE CIT(A) HAS ERRED IN IGNORING THE FACTS THAT T HE MAIN MOTTO OF THE ASSESSEE IS LENDING FOR ITS MEMBER, WHICH IS IN THE NATURE OF BANKING TRANSACTION AND C OMES UNDER THE PURVIEW OF SECTION 80P(4) OF THE ACT? GROUND OF APPEAL FOR A.Y. 2010-11 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION UNDER SECTION 80P OF THE ACT OF RS.12,57,878/-? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE CIT(A) HAS ERRED IN IGNORING THE FACTS THAT T HE MAIN MOTTO OF THE ASSESSEE IS LENDING FOR ITS MEMBER, WHICH IS IN THE NATURE OF BANKING TRANSACTION AND C OMES UNDER THE PURVIEW OF SECTION 80P(4) OF THE ACT? M/S. YUVA JAGRUTI SAHAKARI PAT SANSTHA 3 2. AT THE OUTSET, PARTIES APPEARING BEFORE ME HAVE INFORM ED THAT THE ISSUE, AS RAKED UP BY THE REVENUE, NOW STOOD SETT LED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF THIS VERY TRIBU NAL. AN ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT , 1961 (FOR SHORT 'THE ACT' ) DATED 29 TH JULY 2011, WAS COMPLETED WHEREIN IT WAS HELD BY THE ASSESSING OFFICER THAT THE ASSESSEE IS A CO -OPERATIVE CREDIT SOCIETY, INVOLVING IN BANKING BUSINESS BY PROVI DING CREDIT FACILITIES TO ITS MEMBERS. THE ASSESSEE HAD CLAIMED A DEDUCTION UNDER SECTION 80P OF THE ACT OF ` 13,54,799 FOR A.Y. 2009-10 AND ` 12,57,878 FOR A.Y. 2010-11. THE ASSESSING OFFICER HAS MENTI ONED THAT SECTION 80P(4), WHICH WAS INSERTED BY FINANCE ACT, 2 006, W.E.F. 1 ST APRIL 2007, ACCORDING TO WHICH, EXEMPTION PROVISIONS O F SECTION 80P, SHALL NOT APPLY IN RELATION TO ANY CO-OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO -OPERATIVE AGRICULTURAL AND RURAL BANK. THE ASSESSING OFFICER HAS ALSO REFERRED EXPLANATION THEREIN ACCORDING TO WHICH THE PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK MEANS A SOC IETY HAVING ITS AREA OF OPERATION CONFINED TO A TALUKA AND THE PRINCIPLE OBJECT IS TO PROVIDE FOR LONG TERM CREDIT FOR AGRICULTURAL AND RUR AL DEVELOPMENT ACTIVITIES. AFTER INVOKING THE SAID PROVISIONS, THE ASS ESSEE WAS DENIED THE EXEMPTION OF SECTION 80P AND THE CLAIM WAS DISALLOWED. M/S. YUVA JAGRUTI SAHAKARI PAT SANSTHA 4 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLAT E AUTHORITY, THE LEARNED CIT(A) HAS QUOTED FEW DECISIONS OF THE AP PELLATE TRIBUNAL AND ALLOWED THE CLAIM. BEING AGGRIEVED, NOW THE REVENUE IS BEFORE ME. 4. SINCE THE RESPECTED COORDINATE BENCH HAS ALREADY TAK EN A VIEW IN SEVERAL CASES IN THE PAST, THEREFORE, WE HAVE NO RE ASON TO TAKE ANY OTHER VIEW BUT TO FOLLOW THE VIEW ALREADY TAKEN. WE R EPRODUCE BELOW THE VIEW TAKEN BY THE ITAT IN SOME CASES:- 1) ITA NO. 393/NAG/2013 & C.O.NO. 23/NAG/2013 DATED 5 TH JUNE, 2015 IN THE CASE OF ITO V/S. VISHAL NAGRI SAHAKARI SANSTHA LTD. RELEVANT PORTION REPRODUCED BELOW:- 2.1 APART FROM DECISION PRONOUNCED BY RESPECTED CO-ORDINATE BENCH NAGPUR IN ASSESSEE'S OWN CASE, WE HAVE ALSO BEEN INFORMED THAT IN THE BUNCH OF CASES ITAT 'E' BENCH, NAGPUR VIDE AN ORDER DATED 1ST FEBRUARY, 2013 OF CASES OF IT AT 'E' BENCH, (AT SERIAL NO. 1, VIDE ITA NO. 68/NAG/2012 (AY 2008-09) IN THE CASE OF ITO VS. M/S SHREE GOPALAKRISHNA URBAN CREDIT CO-OPERATIVE SOCIETY MARYADIT, NAGPUR) & OTHERS, WHEREIN E-BENCH OF NAGPUR TRIBUNAL, WHILE GRANTING THE BENEFIT OF DEDUCTION IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE, HELD AS UNDER:- 'WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. WE ARE OF THE OPINION THAT ORDERS OF THE FAAS DO NOT SUFFER FROM ANY LEGAL INFIRMITY. AFTER ANALYZING THE VARIOUS PROVISIONS OF THE ACTS AND THE CIRCULARS (ISSUED BY THE RBI AND CBDT) THEY HAVE HELD THAT ASSESSEES WERE NOT A CO- OPERATIVE BANKS AS ENVISAGED BY THE AOS IN THEIR ASSESSMENT ORDERS. IN OUR CONSIDERED OPINION, ASSESSEE CO-OPERATIVE SOCIETIES CANNOT BE DEPRIVED OF THE BENEFITS OF DEDUCTIONS AVAILABLE AS PER THE PROVISIONS OF SECTION 80P(2)(A) OF THE ACT BY INVOKING THE PROVISIONS OF SECTION 80P(4) OF THE ACT, AS DONE BY THE AOS. WE FULLY AGREE WITH THE F'AAS THAT THE APPELLANTS ARE CREDIT CO-OPERATIVE SOCIETIES AND NOT M/S. YUVA JAGRUTI SAHAKARI PAT SANSTHA 5 CO-OPERATIVE BANKS AND THEREFORE THEY ARE ENTITLED TO CLAIM DEDUCTION AVAILABLE UNDER CHAPTER VI-A OF THE ACT. AS POINTED OUT BY THE ARS OF THE ASSESSEES, WE HAVE PASSED SIMILAR ORDER IN THE CASE OF MEDICAL COLLEGE HOSPITAL EMPLOYEES CREDIT CO-OP. SOCIETY LTD., (SUPRA). FOLLOWING OUR OWN SAID ORDER, WE DECIDE THE ALL THE GROUNDS OF APPEALS AGAINST THE AOS'. AND, THEREFORE, UNDER THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE, AS ALSO RESPECTFULLY FOLLOWING THE PRECEDENTS HEREINABOVE, WE FIND NO FORCE IN THIS GROUND OF THE REVENUE HENCE, DISMISSED. 2) ITA NO. 391/NAG/2013 & ITA NO. 397/NAG/2013 DATED 2 7-05- 2015 IN THE CASE OF ITO V/S. M/S BLACK DIAMOND KARMACHARI CREDIT CO-OP. SOCIETY. RELEVANT PORTION REPRODUCED BELOW:- 2. UPON HEARING LEARNED DEPARTMENTAL REPRESENTATIVE AND THE MANAGER OF THE SOCIETY, WE FIND THAT ITAT NAGPUR BENCH IN ASSESSEES OWN CASE IN ITA NO.156/NAG/2012 FOR ASSESSMENT YEAR 2009-10 VIDE ORDER DATED 06.02.2013 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. WE ARE OF THE OPINION THAT ORDERS OF THE FAAS DO NOT SUFFER FROM ANY LEGAL INFIRMITY. AFTER ANALYZING THE VARIOUS PROVISIONS OF THE ACTS AND THE CIRCULARS (ISSUED BY THE RBI AND CBDT) THEY HAVE HELD THAT ASSESSEES WERE NOT A CO-OPERATIVE BANKS AS ENVISAGED BY THE AOS IN THEIR ASSESSMENT ORDERS. IN OUR CONSIDERED OPINION, ASSESSEE CO-OPERATIVE SOCIETIES CANNOT BE DEPRIVED OF THE BENEFITS OF DEDUCTION AVAILABLE AS PER THE PROVISIONS OF SECTION 80P(2)(A) OF THE ACT BY INVOKING THE PROVISIONS OF SECTION 80P(4) OF THE ACT, AS DONE BY THE AOS. WE FULLY AGREE WITH THE FAAS THAT THE APPELLANTS ARE CREDIT CO-OPERATIVE SOCIETIES AND NOT CO -OPERATIVE BANKS AND THEREFORE THEY ARE ENTITLED TO CLAIM DEDUCTION AVAILABLE UNDER CHAPTER VI-A OF THE ACT. AS POINTED OUT BY THE ARS OF THE ASSESSEE, WE HAVE PASSED SIMILAR ORDER IN THE CASE OF MEDICAL COLLEGE HOSPITAL EMPLOYEES CREDIT CO.-OP. SOCIETY LTD., (SUPRA). FOLLOWING OUR OWN SAID ORDER, WE DECIDE THE ALL THE GROUNDS OF APPEALS AGAINST THE AOS. M/S. YUVA JAGRUTI SAHAKARI PAT SANSTHA 6 3. SINCE THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ITATS DECISION IN ASSESSEES OWN CASE, WE UPHOLD THE ORDER OF LEARNED CIT(A). 3) ITA NOS. 357/NAG/2012, 359/NAG/2013, 361/NAG/2013 & 371/NAG/2013 DATED 27-05-2015 IN THE CASE OF ITO V/S. Z.P. PRIMARY TEACHERS CREDIT CO-OP. SOCIETY LTD. AND OTHERS. RELEVANT PORTION REPRODUCED BELOW:- 7. NOW, WE FIND THAT IT IS UNDISPUTED, THAT THESE CO- OPERATIVE SOCIETIES ARE ENGAGED IN PROVIDING CREDIT FACILIT IES TO ITS MEMBERS. IT IS NOT AT ALL THE CASE THAT THEY ARE PROVID ING SERVICES OR FACILITIES TO THE PUBLIC AT LARGE. THE DECISI ON REFERRED BY THE LD. DR IN THE CASE OF 144 CTR 240, IS THE JUDGMENT OF HONBLE MADRAS HIGH COURT AND SAME WAS DELIVERED IN THE CONTEXT OF EXGIBILITY TO INTEREST TAX ACT. IN OUR CONSIDERED OPINION, THE FACTS OF THE CASE AND RATIO EMANATING THEREFROM ARE NOT AT ALL APPLICABLE TO THE FACTS OF THE CA SE. WE NOTE THAT NAGPUR TRIBUNAL ITSELF HAS DECIDED THE ISSUE IN FAV OUR OF THE ASSESSES IN BATCH OF GROUP OF CASES BY ORDER DATED 1 ST FEBRUARY, 2013, WHICH INCLUDED ONE OF THE ASSESSEES M/S INDER COLOUR CREDIT CO-OP. SOCIETY. TWO OF THE CASES IN THE SAID CASE ALSO TRAVELLED TO THE HONBLE JURISDICTIONAL HIGH COURT. BY THE ORDER DATED 26 TH SEPTEMBER, 2013 IN ITA NO. 59 & 60 OF 2013. THE HONBLE JURISDICTIONAL HIGH COURT HAS DISMISSED THE REVENUES APPEAL IN THIS REGARD. 8. IN THE AFORESAID BACKGROUND OF DISCUSSION AND PRECEDENT, IN OUR CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A). ACCORDINGLY, WE UPHOLD THE SAME. 5. IN THE LIGHT OF ABOVE DISCUSSION, GROUNDS RAISED BY T HE REVENUE ARE HEREBY DISMISSED. 6. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST 2015 SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER NAGPUR, DATED: 18 TH AUGUST 2015 M/S. YUVA JAGRUTI SAHAKARI PAT SANSTHA 7 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY A SSISTANT REGISTRAR ITAT, NAGPUR