Pushtikar Laghu Vyaparik Pratisthan Bachat Evam Sakh Sahakari Samiti Ltd., JODHPUR V. ITO, JODHPUR

ITA 146/JODH/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5219 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MADHUK
• Keywords: Benefit of exemption
• Section: 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO S . 146 TO 149 / JODH /201 5 (ASST. YEAR S : 200 7 - 0 8 & 2009 - 10 TO 2011 - 12 ) PUSHTIKAR LAGHU VYAPARIK PRATISTHAN BACHAT EVAM SAKH SAHAKARI SAMITI LTD., 4 - F - 71, NEW POWER HOUSE ROAD, JODHPUR. VS. ITO, WARD - 1(3), JODHPUR. PAN NO. AACCP 7928 H (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE . DEPARTMENT BY : S HRI S.K. MADHUK - DR DATE OF HEARING : 1 5 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 1 5 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THESE ARE THE APPEAL S FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , JODHPUR , DATED 18 /0 3 /201 5 , 16/03/2015 & 17/03/2015 FOR THE ASSESSMENT YEARS 2007 - 08 & 2009 - 10 TO 2011 - 12 2. GROUNDS NO. 6 TO 8 OF THE APPEAL ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN HOLDING THAT THE ASSESSEES INCOME WAS TAXABLE UNDER SEC. 80P ( 4) AND DENYING DEDUCTION UNDER SEC. 80P(2)(A)(I) OF THE ACT. 2 ITA NO S . 146 - 149 / JODH /201 5 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FAILED TO ESTABLISH COMPLIANCE WITH THE REQUIREMENTS OF SEC. 80P(4) INTRODUCED W.E.F. ASSESSMENT YEAR 2007 - 08 . THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS A REGISTERED UNDER THE C OOPERATIVE SOCIETIES AS MULTI - STATE COOPERATIVE SOCIETY UNDER SEC. 22 OF MULTI - STATE COOPERATIVE SOCIETIES ACT 2002 . THE ASSESSEE WAS DOING BANKING BUSINESS , WHICH WAS COVERED UNDER THE DEFINITION OF A COOPERATIVE BANK AS DEFINED IN PART V OF BANKING REGULATION ACT AND HENCE , NOT ELIGIBLE FOR DEDUCTION UNDER SEC. 80P(2)(A ) (I) ACT. 4 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER FOR THE VERY SAME REASONS . 5. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE BEING ISSUED TO THE ASSESSEE. 6 . ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7. WE FIND THAT THE ISSUE IS NOW COVERED BY THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN FAVOUR OF THE ASSESSEE IN THE CASE OF CIT VS. SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA , BAGALKOT , IN ITA NO.5006/2013 DATED 05 - 02 - 2014, WHICH WAS FOLLOWED IN THE CASES OF GENERAL INSURANCE EMPLOYEES CO - OPERATIVE CREDIT SOCIETY LTD. AND IN THE CASE OF VASAVI MULTIPURPOSE SOUHARDA SAHAKARI NIYAMITHA, ITA NO.505/2013 DATED 27/ 06/2014, HAS CLEARLY HELD THAT A CO - OPERATIVE SOCIETY REGISTERED AS CO - OPERATIVE SOCIETY, PROVIDING CREDIT FACILITIES TO MEMBERS AND NOT REGISTERED WITH THE RBI CANNOT BE DENIED THE EXEMPTION UNDER SECTION 80P(1) OF THE IT ACT. THE OPERATIVE PART O F THE JU DGMENT READS AS FOLLOWS: - THEREFORE, THE INTENTION OF THE LEGISLATURE IS CLEAR, IF A CO - OPERATIVE BANK IS EXCLUSIVELY CARRYING ON BANKING BUSINESS, THEN THE INCOME 3 ITA NO S . 146 - 149 / JODH /201 5 DERIVED FROM THE SAID BUSINESS CANNOT BE DEDUCTED IN COMPUTING THE TOTAL INCOME OF THE AS SESSEE. THE SAID INCOME IS LIABLE FOR TAX. A CO - OPERATIVE BANK AS DEFINED UNDER THE BANKING REGULATION ACT INCLUDES THE PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THE LEGISLATURE DID NOT WA NT TO DENY THE SAID BENEFITS TO A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THEY DID NOT WANT TO EXTEND THE SAID BENEFIT TO A CO - OPERATIVE BANK WHICH IS EXCLUSIVELY CARRYING ON BANKING BUSINESS I .E THE ITA NO.1149/BANG/2015 SHRI HOLEHUCHESHWAR CO - OP CREDIT SOCIETY LTD. PAGE 4 OF 6 PURPOSE OF THIS AMENDMENT. THEREFORE, AS THE ASSESSEE IS NOT A CO - OPERATIVE BANK CARRYING ON EXCLUSIVELY BANKING BUSINESS AND AS IT DOES NO POSSESS A LICENCE FROM RESERV E BANK OF INDIA TO CARRY ON BUSINESS, IT IS NOT A CO - OPERATIVE BANK. IT IS A CO - OPERATIVE SOCIETY WHICH ALSO CARRIES ON THE BUSINESS OF LENDING MONEY TO ITS MEMBERS WHICH IS COVERED UNDER SECTION 80P(2)(A)(I) I.E CARRYING ON THE BUSINESS OF BANKING FOR PRO VIDING CREDIT FACILITIES TO ITS MEMBERS. THE OBJECT OF THE AFORESAID AMENDMENT IS NOT TO EXCLUDE THE BENEFIT EXTENDED UNDER SECTION 80P(1) TO SUCH SOCIETY.IN THE INSTANT CASE, WHEN THE STATUS OF THE ASSESSEE IS A CO - OPERATIVE SOCIETY AND IS NOT A CO - OPERATIVE BANK, THE ORDER PASSED BY THE ASSESSING AUTHORITY EXTENDING THE BENEFIT OF EXEMPTION FROM PAYMENT OF TAX UNDER SECTION 80P(2)(A)(I) OF THE ACT IS CORRECT. RESPECTFULLY FOLLOWING THE SAME, WE UP HOLD THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND NOT A COOPERATIVE BANK AND, THEREFORE, ENTITLED TO DEDUCTION UNDER SEC. 80P OF THE ACT. WE THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION UNDER SEC. 80P OF THE ACT TO THE ASSESSEE. 8. THE ASSESSEE IN GROUND N O S . 2 TO 4 OF THE APPEAL HAS CHALLENGED THE REOPENING OF THE ASSESSMENT UNDER SEC. 148 OF THE ACT. 9 . SINCE, WE HAVE DELETED THE DISALLOWANCE UNDER SEC. 80P OF THE ACT ON MERITS, THEREFORE THE GROUNDS RELATING TO REOPENING OF THE ASSESSMENT HAVE BECOME INFRUCTUOUS AND ARE NOT ADJUDICATED BY US. 10. IN THE RESULT, APPEAL S OF THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON TUESDAY , THE 1 5 TH DAY OF MARCH , 201 6 AT JODHPUR . SD/ - SD/ - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 1 5 TH MARCH , 201 6 . 4 ITA NO S . 146 - 149 / JODH /201 5 VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER