The Co-operative House Building Society Ltd., Mandi Gobindgarh V. DCIT, Circle, Mandi Gobindgarh

ITA 1485/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8038 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 19-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Business income; Set aside
• Section: 6; 56; 143(3); 80P

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 1485/CHD/2019 / ASSESSMENT YEAR : 2016-17 THE CO-OPERATIVE HOUSE BUILDING SOCIETY LTD., POST OFFICE ROAD, MANDI GOBINDGARH. VS THE DCIT, CIRCLE, MANDI GOBINDGARH. ./ PAN NO: AABAT33580E / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI SUDHIR SEHGAL, ADVOCATE # ! ' / REVENUE BY : SHRI DAYA INDER SINGH SIDHU, SR.DR $ % ! &/ DATE OF HEARING : 20.08.2020 '()* ! &/ D ATE OF PRONOUNCEMENT : 21.08.2020 HEARING CONDUCTED VIA WEBEX / ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE WHEREIN THE CORRECTNESS OF THE ORDER DATED 19.09.20 19 OF THE CIT(A) PATIALA PERTAINING TO 2016-17 ASSESSMENT YEA R IS ASSAILED ON THE FOLLOWING GROUNDS : 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN UPHOLDING THE ADDITION OF RS. 33,21,653/- MADE BY THE ASSESSI NG OFFICER AND CLAIMED BY THE APPELLANT AS EXEMPT U/S 80P(2)(A)(1) OF THE INCOME TAX ACT BY FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF M/S TOTGARS COOPERATIVE SALES SOCIETY LTD. SINCE IN THAT CASE IT WAS MERELY ON INTEREST INCOME WHEREAS , BUSINESS INCOME IN OUR CASE. 2. THAT THE LD. C\T(A) HAS FAILED TO APPRECIATE THAT AS PER CLAUSE-2 (A)(I ) OF SECTION 80P, THE EXEMPTION U/S 80P IS ALLOWABLE TO COOPERATIVE SOCIETY CARRYING ON THE BUSINESS OF 'BANKING' OR PROVIDING CREDIT FACIL ITY TO ITS MEMBERS AND THE ASSESSEE ITA 1485 /CHD/2019 A.Y. 2016-17 PAGE 2 OF 8 BEING ENGAGED IN PROVIDING CREDIT FACILITY TO IT'S MEMBERS AND, THEREFORE, IS ENTITLE D TO DEDUCTION U/S 80-P. 3. THAT THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING INTEREST INCOME ON DEPOSITS WITH COOPER ATIVE BANK AS INCOME FROM OTHER SOURCES CONTRARY TO THE FACTS AND CIRCUMSTANC ES OF THE CASE I.E BUSINESS INCOME . 4. THAT THE WORTHY CITA) HAS ERRED IN NOT CONSIDERING THAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S 80P(2)(A)(I) OF THE INCOM E TAX ACT AS IT WORKS ON PRINCIPLES OF MUTUALITY AND COOPERATION BY PROVIDING L OANS FOR CONSTRUCTION OF HOUSES TO ITS MEMBERS ONLY. 5. THAT THE WORTHY CIT (A) HAS ERRED IN NOT CONSIDERIN G THAT SINCE CREDIT FACILITY IS PROVIDED TO ITS MEMBERS ONLY AND AS SUCH, THE SAME IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE INCOME TAX ACT IN THE LIGHT OF CASE OF ACIT REWARI VS. SANGWARI PRIMARY AGRO COOP. ITA NO.40/DEL/2012. 6. THAT THE FINDING OF THE CIT(A) IN THE LAST PARA OF THE ORDER THAT PROVIDING SERVICES COME WITHIN THE RUBRIC OF BANKING SERVICES AND IS COVERED U/S 80P(4) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE SIN CE THE STATUS OF THE ASSESSEE IS COOPERATIVE SOCIETY. 7. THE FINDING OF THE CIT(A) IS ALSO NOT CORRECT SINCE HE HAS ACCEPTED ALL THE RECEIPTS/EXPENDITURE AS PER INCOME AND EXPENDITURE ACCOUNT. THUS, THE FINDING OF THE CIT(A) IS CONTRADICTORY. 8. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 2. THE LD. AR MR. SUDHIR SEHGAL MADE A PRAYER FOR REMANDING THE ISSUE BACK TO THE FILE OF THE AO ON T HE GROUNDS THAT THE ISSUES WERE COVERED BY ORDER DATED 20.11.2019 OF THE ITAT IN ITA NO. 1006/CHD/2017 & I TA 1598/CHD/2018 IN ASSESSEE'S OWN CASE. INVITED ATTEN TION TO THE COPY OF THE ORDER FILED, IT WAS SUBMITTED THAT FOLLOWING THE PRECEDENT ON SAME SET OF FACTS, REMAND BACK MAY BE DIRECTED. 3. SHRI SIDHU, SR.DR ON CONSIDERING THE RECORD AGRE ED WITH THE AFORESAID SUGGESTION OF THE LD. AR. ITA 1485 /CHD/2019 A.Y. 2016-17 PAGE 3 OF 8 4. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MAT ERIAL ON RECORD. IN THE FACTS OF THE PRESENT CASE, IT IS SEEN THAT THE ASSESSEE AS PER THE ASSESSMENT ORDER IS A CO-OP ERATIVE SOCIETY PROVIDING LOANS TO ITS MEMBERS AND ACCEPTIN G DEPOSITS FROM ITS MEMBERS AS WELL AS NON-MEMBERS. CONSIDERING THE PAST HISTORY, THE AO AFTER HEARING THE ASSESSEE DENIED THE DEDUCTION CLAIMED U/S 80P(2)(A) (I) OF THE ACT. RELIANCE FOR SO PROCEEDING WAS PLACED UPON THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS TOTAGARS CO -OPERATIVE SALES SOCIETY LTD. 322 ITR 283. 4.1 THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. BEFORE THE SAID FORUM, THE AS SESSEE AGAIN FAILED. A PERUSAL OF THE FINDINGS ARRIVED AT IN PARAS 4 ONWARDS SHOWS THAT THE REASONING FOR UPHOLDING THE ASSESSMENT ORDER WAS PASSED ON THE BASIS OF PRINCIP LES CONSIDERED IN VARIOUS DECISIONS OF COURTS AND TRIBU NALS AS MENTIONED THEREIN. ON THE BASIS OF THIS, THE LD. COMMISSIONER HELD AS UNDER : THE LD AO IN THE INSTANT CASE HOLDS THAT THE T AKING OF RECURRING DEPOSITS AND ALLOWING SAVING ACCOUNTS IS NOT JUST RAISING FU NDS SIMPLICITER AND PROVIDES OTHER SERVICES SUCH AS SAFETY TO FUNDS. THE COUNTER ARGUMENT OFFERED WAS THAT SOME SECURITY IS PROVIDED TO ANY LOAN. THE LD AO FURTHER GIVES A FINDING THAT THAT MONEY FROM NON-MEMBERS ACCOUNTS IS WHAT LEADS TO INTEREST INCOME AS THIS LEADS TO THE SURPLUS PLACED IN DEPOSITS WITH COOPERATIVE BANK SI RHIND. 4.1.1 THE LD. COMMISSIONER FURTHER ADDRESSING THE DISTINCTION BETWEEN THE CO-OPERATIVE SOCIETY AND A CO- ITA 1485 /CHD/2019 A.Y. 2016-17 PAGE 4 OF 8 OPERATIVE BANK TABULATING THESE REJECTED THE APPEAL HOLDING AS UNDER : THE DIFFERENCES BETWEEN A COOPERATIVE SOCIETY AND A COOPERATIVE BANK ARE TABULATED AS UNDER: COOPERATIVE BANK COOPERATIVE SOCIETY CO - OPERATIVE SOCIETY REGISTERED UNDER BANKING REGULATION ACT, 1949 CO - OPERATIVE SOCIETY REGISTERED UNDER CO-OPERATIVE SOCIETY ACT OF THE RESPECTIVE STATE. REGISTRATION UNDER THE BANKING REGULATION ACT, 1949 AND CO-OPERATIVE SOCIETIES ACT, 1959 CO - OPERATIVE SOCIETIES ACT, 1959 REGISTRATION NATURE OF BUSINESS 1. AS DEFINED IN SECTION 6 OF BANKING REGULATION ACT. 2. CAN OPEN SAVINGS BANK ACCOUNT, CURRENT ACCOUNT, OVERDRAFT ACCOUNT, CASH CREDIT ACCOUNT, ISSUE LETTER OF CREDIT, DISCOUNTING BILLS OF EXCHANGE, ISSUE CHEQUES, DEMAND DRAFTS (DD), PAY ORDERS, GIFT CHEQUES, LOCKERS, BANK GUARANTEES ETC. 3. CO-OPERATIVE BANKS CAN ACT AS CLEARING AGENT FOR CHEQUES, DDS, PAY ORDERS AND OTHER FORMS. 1. AS PER LAWS LAWS OF THE CO-OPERATIVE SOCIETY. 2. SOCIETY CANNOT OPEN SAVINGS BANK ACCOUNT, CURRENT ACCOUNT, ISSUE LETTER OF CREDIT, DISCOUNTING BILLS OF E XCHANGE, ISSUE CHEQUE, DEMAND DRAFTS, PAY ORDERS, GIFT CHEQUES, LOCKERS, BANK GUARANTEES ETC. 3. SOCIETY CANNOT ACT AS CLEARING AGENT, FOR CHEQUES, DDS, PAY ORDERS AND OTHER FORMS. 4. BANKS ARE BOUND TO FOLLOW THE RULES, REGULATIONS AND DIRECTIONS ISSUED BY RESERVE BANK OF INDIA (RBI) 4. SOCIETY ARE BOUND BY RULES AND REGULATIONS AS SPECIFIED BY IN THE CO- OPERATIVE SOCIETIES ACT FILING OF RETURNS CO - OPERATIVE BANKS HAVE TO SUBMIT ANNUAL RETURN TO RBI EVERY YEAR SOCIETY HAS TO SUBMIT THE ANNUAL RETURN TO REGISTRAR OF SOCIETIES. INSPECTION RBI HAS THE POWER TO INSPECT ACCOUNTS AND OVER ALL FUNCTIONING OF THE BANK REGISTRAR HAS THE POWER TO INSPECT ACCOUNTS AND OVER ALL FUNCTIONING OF THE BANK. PARTV PART V OF THE BANKING REGULATION ACT IS APPLICABLE TO COOPERATIVE BANK PART V OF THE BANKING REGULATION ACT IS NOT APPLICABLE TO CO-OPERATIVE BANKS NAME THE WORD 'BANK ''BANKER', 'BANKING' CAN BE USED BY A COOPERATIVE BANK THE WORD 'BANK' 'BANKER', 'BANKING' CANNOT BE USED BY A CO-OPERATIVE SOCIETY THE APPELLANT'S CASE IN MY CONSIDERED VIEW IS DISTI NCT, AS THE APPELLANT HA: IN MY CONSIDERED VIEW, ESTABLISHED THAT THE MONEY PLACED WITH COOPERATIVE SIRHIND IS A PART AND PARCEL OF ITS BUSINESS ACTIVITY OF PROVIDING CREDIT SERVICES MEMBERS. THE FACTS OF THE CASE ARE SIMILAR WITH THOSE IN THE IN THE CASE OF THE CO -OPERATIVE SOCIETY LTD VS ACIT AS THE APPELLANT HAS DONE SERVICES IN EXCESS OF NEED TO SU PPORT THE MAIN BUSINESS IN THE FORM OF PROVIDING SERVICES THAT COME THE RUBRIC OF BANKING SERVICES SUCH AS OPENING SAVINGS ACCOUNTS AND RECURRING DEPC WHICH LEAD TO THE APPEL LANT BEING COVERED U/S 80P(4) OF THE ACT. IT IS NOT APPELLANT'S CASE THAT THE MONEY WAS KEPT WITH COOPERATIVE BANK SIRHIND DUE B STATUTORY REQUIREMENT WHEREON SOME INTEREST WAS EAR NED WITHOUT ANY VOLITION OF APPELLANT. I THEREFORE SEE NO REASON TO INTERFERE WITH THE ORD ER OF THE LD. AO. GROUNDS OF APPEAL ARE DISMISSED. ITA 1485 /CHD/2019 A.Y. 2016-17 PAGE 5 OF 8 4.2. CONSIDERING THE PRAYER OF THE PARTIES, IT IS S EEN THAT IT IS MAINTAINABLE. THE ITAT IN ASSESSEE'S CASE CONSIDER ING THE FACTS OF TWO IMMEDIATELY PRECEDING ASSESSMENT YEARS NAMEL Y 2014-15 AND 2015-16 ASSESSMENT YEAR HAD AN OCCASION TO CONS IDER THE FACTS OF ASSESSEE'S CASE WHICH ARE SEEN TO BE MORE OR LESS SIMILAR ARGUMENTS. THE ISSUES HAD BEEN REMANDED BACK TO THE AO. A PERUSAL OF THE ORDER SHOWS THAT THE FACTS TAKEN INT O CONSIDERATION QUA THE ARGUMENTS ADVANCED ON BEHALF OF THE ASSESSE E ARE SET OUT IN PARAS 2 ONWARDS AND THE QUERIES RAISED BY THE BE NCH AND THE FACTS ON RECORD AS ANSWERED ON BEHALF OF THE ASSESS EE ARE SET OUT IN THE FOLLOWING PARAGRAPHS RIGHT UPTO PARA 8. FOR THE SAKE OF COMPLETENESS, THESE ARE SET OUT HEREUNDER : 2. THE LD. AR SUBMITTED THAT IN THE FACTS OF THE P RESENT CASE, THE ASSESSEE HAS BEEN GRANTED 80P DEDUCTION IN THE EARLIER YEARS AND ONLY IN THESE TWO YEARS, THE CLAIM HAS BEEN DENIED. THE ASSESSEE, IT WAS SUBMITTED, I S CO-OPERATIVE HOUSE BUILDING SOCIETY WHEREIN THE ONLY ACTIVITY IS THE BORROWINGS MADE FROM THE MEMBERS AND THE NON MEMBERS. THE AMOUNTS, IT WAS SUBMITTED, ARE FUR THER ADVANCED ONLY TO THE MEMBERS FOR A HOUSING LOAN AND NOT FOR ANY OTHER PU RPOSE. IT WAS SUBMITTED THAT THE MAXIMUM LIMIT FOR ADVANCING HOUSING LOAN TO A MEMBE R WAS ALSO FIXED AT RS. 2.50 LACS. IT WAS HIS SUBMISSION THAT NO SERVICES HAVE BEEN PROVIDED BY THE ASSESSEE TO THE NON-MEMBERS AND ONLY BORROWINGS HAVE BEEN MADE FRO M THE NON-MEMBERS AND THESE TOO HAVE BEEN UTILIZED FOR THE PURPOSES OF ADVANCIN G LOANS TO THE MEMBERS ONLY. 3. IN THE YEAR UNDER CONSIDERATION, IT WAS SUBMITTE D THAT THE LOAN ADVANCED TO THE MEMBERS HAS INCREASED FROM RS. 4.35 LACS TO RS. 7.6 1 LACS. THE RELIEF IS SOUGHT INVOKING THE PRINCIPLE OF MUTUALITY AMONGST THE MEM BERS. IT WAS ARGUED THAT SINCE NO SERVICES ARE PROVIDED TO THE NON-MEMBERS AND ONLY T HE AMOUNTS BORROWED FROM THE NON-MEMBERS ARE TRANSFERRED TO THE RESERVE FUNDS AND IT IS PARKED IN THE BANKS ONLY FOR THE SPECIFIC PERIOD WHERE THE MEMBERS HAVE NOT SOUGHT A LOAN OTHERWISE IT IS DISBURSED ON REQUEST. IT WAS HIS SUBMISSION THE ASS ESSEE IN 2009-10, 2010-11, 2012-13 AND 2013-14 ASSESSMENT YEARS HAS BEEN ALLOWED EXEMP TION U/S 80P(2)(A)(I) IN 143(3) PROCEEDINGS. IT WAS HIS SUBMISSION THAT SINCE THER E IS NO CHANGE IN MATERIAL FACTS, THE DEPARTURE FROM THE ACCEPTED POSITION IN THE YEARS W AS QUESTIONED. INVITING ATTENTION TO THE SPECIFIC ORDERS OF THE TAX AUTHORITIES, IT W AS HIS SUBMISSION THAT THE CLAIM OF THE ASSESSEE HAS BEEN DENIED RELYING UPON THE DECISION OF THE APEX COURT IN THE CASE OF M/S TOTGAR CO-OP SALES SOCIETY LTD. VS ITO 322 ITR 283 (S.C). IT WAS HIS SUBMISSION THAT THE SAID DECISION HAS BEEN DISTINGU ISHED IN MANY CASES AND HAS BEEN HELD TO BE INAPPLICABLE. ITA 1485 /CHD/2019 A.Y. 2016-17 PAGE 6 OF 8 4. ATTENTION OF THE LD. AR WAS INVITED TO THE FINDI NG OF THE AO RECORDED IN PARA 3 WHEREIN HE CATEGORICALLY OBSERVES THAT THE ASSESSEE SOCIETY DOES NOT CONFIRM TO THE SCHEME OF SECTION 80P OF THE INCOME TAX ACT. THE SPECIFIC REASONS SET OUT IN THE ORDER WERE REQUIRED TO BE ADDRESSED BY THE LD. AR. THESE ARE EXTRACTED HEREUNDER FOR READY REFERENCE: (A) THE SOCIETY HAS ACCEPTED DEPOSITS FROM NON MEMB ERS BY OPENING SAVING BANK ACCOUNT, FD ACCOUNT AND R.D. ACCOUNT OF NON MEMBERS . (B) THE SOCIETY HAS STAKED SURPLUS FUNDS IN THE LON G TERM DEPOSITS WITH COOPERATIVE BANK, SIRHIND AND HAD EARNED INTEREST A MOUNTING TO RS.98,71,332/- ON SUCH DEPOSITS. 5. THE LD. AR IN RESPONSE REFERRED TO THE SUBMISSIO NS ADVANCED BEFORE THE AO ON 15.07.2016 EXTRACTED IN PARA 3.1 OF THE ORDER. A P ERUSAL OF THE SAME SHOWS THAT THE ASSESSEE SOCIETY PLEADED THAT ; THE SOCIETY IS WORKING ON PRINCIPLES OF MUTUALITY A ND COOPERATION AS ENSHRINED IN IT S OBJECTS AS PER CON STITUTION OF SOCIETY AND THAT THE COOPERATIVE HOUSE BUILDING SOCIETY LTD., MANDI GOBI NDGARH IS ENGAGED M ACCEPTING DEPOSITS AND LENDING HOME LOANS TO IT'S MEMBERS- WH ICH IS A PRINCIPLE OF MUTUALITY AND COOPERATION TO MEMBERS-AS SUCH SOCIETY ELIGIBLE FOR DEDUCTION U/S 80(P)(2)(A)(I) OF IT. ACT, 1961. 6. ATTENTION OF THE LD. AR WAS ALSO INVITED TO THE FACT THAT AS PER THE ASSESSMENT ORDER, THE SOCIETY HAD MAINTAINED A BALANCE OF RS. 8,99,28,854/- WHICH WAS NOTICED TO BE SAVING DEPOSITS OF NON-MEMBERS AND AT THE SAME TIME , THE SOCIETY WAS FOUND TO HAVE LONG TERM DEPOSIT OF RS. 8,92,22,863/- WITH THE CO-OPERA TIVE BANK. THE AO, IT IS SEEN HAS NOTED THAT THE SOCIETY HAD PAID LOWER RATE OF INTER EST ON THE SAVING ACCOUNT AND EARNED A HIGHER RATE OF INTEREST ON FDR. INFACT THE AO HA S HELD THAT MOREOVER, OPENING SAVING BANK ACCOUNT, R.D. ACCOUNTS COMES WE LL WITHIN THE AMBIT OF PROVIDING BANKING SERVICES. SINCE, THESE SERVICES HAVE BEEN P ROVIDED TO NON-MEMBERS, AS SUCH, THE CONCEPT OF MUTUALITY IS NOT THERE. ON THIS ACTIVI TY THE LD. AR WAS SPECIFICALLY PUT TO NOTICE BY THE CO-ORDINATE BENCH ON 29.04.2018 AS PER THE O RDER SHEET. 7. THE LD. AR REFERRING TO PARA 4 OF THE ASSESSMENT ORDER SUBMITTED THAT THE ASSESSEE IN ITS SUBMISSIONS HAS CANVASSED THAT NO SERVICES ARE BEING PROVIDED TO THE NON-MEMBERS, THE MONEY WAS FOR THE BENEFIT OF THE MEMBERS ONLY. THE LD. AR IN THIS FACTUAL BACKGROUND WAS REQUIRED TO ADDRESS REFERRING TO THE BY-LAWS OF THE SOCIETY AS TO ON WHAT TERMS AND CONDITIONS, THE NON-MEMBERS WERE DEPOSITING MONEY. THE LD. AR SUBMITTED THAT IN THE PAPER BOOKS FILED, COPY OF BY-LAWS HAS NOT BEEN PROVIDED, THOUGH ONE COPY MAY BE AVAILABLE WITH HIM. THE LD. ARS ATTENTION WAS INVITED TO THE ORD ER-SHEET ENTRY DATED 29.04.2019 WHERE HE WAS SPECIFICALLY REQUIRED TO VERIFY WHETHER THE ASS ESSEE SOCIETY WAS A BANKING CO-OPERATIVE SOCIETY HAVING THE LICENSE/AUTHORITY TO DO SO. 8. THE LD. AR SUBMITTED THAT THE SAID INFORMATION IS NOT READILY AVAILABLE WITH HIM. IN THE CIRCUMSTANCES, ULTIMATELY HE AGREED THAT THE MATTER MAY BE REMANDED BACK TO BE DECIDED IN ACCORDANCE WITH THE SPECIFIC FACTS OF THE ASSESSEE SOCIETY AND ITS BY-LAWS. IT WAS PUT TO THE LD. AR THAT THE PAST HISTORY IN THE CIRCUMSTANCES W HERE FACTS HAVE NOT BEEN REFERRED TO, WOULD NOT BE OF MUCH RELEVANCE AS THERE IS NO HEROI SM IN PERPETUATING AN ERROR AS DECISIONS TAKEN WHERE NEITHER THE SPECIFIC BY-LAWS OF THE ASS ESSEE SOCIETY HAVE BEEN TAKEN INTO CONSIDERATION NOR THE RELEVANT FACTS CANNOT BE OF A NY RELEVANCE FOR DETERMINING THE ISSUES. 4.3. IT IS SEEN THAT SINCE ON FACTS THE PRAYER FOR REMAND WAS NOT OBJECTED TO BY THE LD. SR.DR MR. A.SUDARSHAN, ITA 1485 /CHD/2019 A.Y. 2016-17 PAGE 7 OF 8 ACCORDINGLY, THE APPEAL ON FACTS WAS REMANDED BACK TO THE AO WITH THE FOLLOWING DIRECTIONS : 9. THE PRAYER FOR REMAND WAS NOT OBJECTED TO BY TH E LD. SR.DR. 10. ACCORDINGLY, IN THE ABSENCE OF RELEVANT DISCUSS ION ON THE FACTS AND IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH, THE IM PUGNED ORDER IS SET ASIDE BACK TO THE FILE OF THE AO WITH A DIRECTION TO FIRST ADDRESS THE ACT IVITIES OF THE ASSESSEE SOCIETY AND THEN WHETHER THESE ARE MAINTAINABLE IN THE LIGHT OF THE BY-LAWS OF THE ASSESSEE SOCIETY AND THEREAFTER, PROCEED TO DECIDE THE ISSUES IN ACCORDA NCE WITH LAW. NO DOUBT THAT THE DECISION OF THE APEX COURT IN THE CASE OF M/S TOTGAR CO-OP S ALES SOCIETY LTD. (SUPRA) HAS BEEN HELD TO BE DISTINGUISHABLE IN MANY CASES BUT THAT DISTIN CTION IS FACT SPECIFIC AND NONE OF THOSE DECISIONS EITHER OF THE HON'BLE HIGH COURT OR THE I TAT CAN BE SAID TO HAVE BEEN PASSED IN DEFIANCE OF THE PRINCIPLE LAID DOWN BY THE APEX COU RT IN THE AFORESAID CASE. ALL COURTS AND TRIBUNALS ARE BOUND BY THE DECISIONS OF THE APEX CO URT. HOWEVER, WHERE ON FACTS, THE DECISION HAS BEEN MISAPPLIED BY THE AO BASING HIS C ONCLUSIONS ON INCORRECT APPRECIATION OF THE PRINCIPLE ON FACTS OF CERTAIN CASES, THE COURTS AND THE TRIBUNALS WOULD SET RIGHT THE MISTAKE. THUS, THE GENERALISTIC ARGUMENT THAT THE D ECISION RENDERED BY THE APEX COURT IN THE CASE OF M/S TOTGAR CO-OP SALES SOCIETY LTD. IS NO L ONGER GOOD LAW HAS TO BE OUTRIGHTLY REPELLED. THE PRINCIPLE LAID DOWN IN THE SAID DECI SION HAS BEEN FOLLOWED IN EACH AND EVERY CASE AND CANNOT BE IGNORED AT THE WHIMS OF THE ASSE SSEE. 11. IN THE FACTS OF M/S TOTGAR CO-OP SALES SOCIETY LTD., THE ASSESSEE WAS A CO-OPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO I TS MEMBERS AND MARKETING THE AGRICULTURAL PRODUCTS OF THE MEMBERS. THE INTEREST EARNED BY TH E ASSESSEE SOCIETY BY INVESTING THE SURPLUS FUNDS IN SHORT TERM DEPOSITS AND GOVERNMENT SECURITIES WAS HELD TO BE TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES U/S 56 OF THE INCOME TAX ACT AND THE APEX COURT AFFIRMED THE PRINCIPLE THAT IT CANNOT BE SAID TO BE ATTRIBUTABLE TO THE ACTIVITIES OF THE SOCIETY AND HENCE DID NOT QUALIFY FOR DEDUCTION U/S 80P(2)( A)(I) OF THE ACT. THE APEX COURT AFFIRMED THE PRINCIPLE THAT INCOME IN RESPECT OF WH ICH DEDUCTION IS SOUGHT, MUST CONSTITUTE THE OPERATIONAL INCOME AND NOT OTHER INCOME WHICH A CCRUES TO THE SOCIETY. ACCORDINGLY, THE ARGUMENTS DE-HORS FACTS THAT THE DECISION OF THE AP EX COURT IN THE CASE OF M/S TOTGAR CO-OP SALES SOCIETY LTD. IS NOT APPLICABLE, WE UNAMBIGUOU SLY HOLD IS INCORRECT AND OF NO RELEVANCE WHATSOEVER. ITS NON-APPLICABILITY TO THE FACTS OF T HE CASE HAS TO BE ESTABLISHED BY THE ASSESSEE. THE REASONS FOR APPLYING THE SAID DECISI ON TO THE FACTS OF THE PRESENT CASE, IN THE LIGHT OF THE SPECIFIC REASONS ARE SET OUT BY THE AO SUCCINCTLY. ON CONSIDERATION OF FACTS AS AVAILABLE ON RECORD, WE FIND THAT PRIMA-FACIE THEY DO NOT APPEAR TO BE INCORRECT, HOWEVER SINCE THE PARTIES ARGUE THAT THE BY-LAWS ARE NOT DI SCUSSED WHICH SHORTCOMING WE ALSO NOTICE ON RECORD AND THE REQUEST FOR REMAND HAS BEEN MADE. THUS, THE SAID EXERCISE HAS TO BE DONE BY THE ASSESSEE IN TERMS OF THE BY-LAWS OF THE ASSESSEE SOCIETY WHEREIN THE ASSESSEE HAS BEEN REQUIRED TO EXPLAIN ITS ACTS OF COLLECTING DEP OSITS FROM NON-MEMBERS ON WHICH INTEREST IS BEING PAID AND ADDRESS ITS ARGUMENTS ON WHETHER IT IS A BANKING CO-OPERATIVE SOCIETY, LICENSED TO DO SO WHICH STAND HAS NOT BEEN CLARIFIE D BY THE ASSESSEE SOCIETY SINCE 29.04.2019 DESPITE THE FACT THAT THE APPEAL CAME UP FOR HEARING THEREAFTER ON 10.06.2019, 07.08.2019 AND FINALLY ON 26.09.2019. IN THE CIRCU MSTANCES, AGREEING TO THE REQUEST OF THE PARTIES, THE MATTER IS REMANDED BACK WITH THE AFORE SAID DIRECTIONS. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 12. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLO WED FOR STATISTICAL PURPOSES. ITA 1485 /CHD/2019 A.Y. 2016-17 PAGE 8 OF 8 4.4. THUS, IN THE LIGHT OF THE FACTS AND CIRCUMSTA NCES AND THE DECISION OF THE ITAT IN ASSESSEE'S OWN CASE, WH ERE FACTS NEED TO BE TAKEN INTO CONSIDERATION, SPECIFICALLY T HE BYLAWS AND THE PERMISSIBLE ACTIVITIES, ACCORDINGLY, FOR TH E SAKE OF CONSISTENCY AND IN THE LIGHT OF THE PRAYER OF THE P ARTIES BEFORE THE BENCH, THE ISSUE IS REMANDED BACK TO THE FILE OF THE AO TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER HEARING THE ASSESSEE. SAID ORDER WAS PRONOUNCED AT THE TIME OF HEARING ITSELF IN THE VIRTUAL COURT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 21 ST AUGUST,2020. SD/- ( ) (DIVA SINGH) / JUDICIAL MEMBER POONAM / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR