Anantkrupa Gramin Bigar Sheti Sahakari Pat .Sanstha Ltd, Pune V. Income-tax Officer, Ward - 8(5), Pune

ITA 1500/PUN/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9213 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-09-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 21-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJEET SHAH
• Keywords: Rule of consistency; Condonation of delay; Co-operative Credit Society; Set aside
• Section: 56; 80P

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.1500/PUN/2018 / ASSESSMENT YEAR : 2015-16 ANANTKRUPA GRAMIN BIGAR SHETI SAHAKARI PAT. SANSTHA LTD., A/P KHARABWADI, CHAKAN TALEGAON ROAD, PUNE-410501. PAN : AABAA4436A . /APPELLANT VS. ITO, WARD-8(5), PUNE. . / RESPONDENT / APPELLANT BY : SHRI M. K. KULKARNI, AR / RESPONDENT BY : SHRI RANJEET SHAH, DR / DATE OF HEARING : 26.09.2019 / DATE OF PRONOUNCEMENT: 01.10.2019 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-6, PUNE DATED 14.06.2018 FOR THE ASSESSMENT YEAR 2015-16. PRELIMINARY ISSUE - CONDONATION OF DELAY 2. BEFORE ME, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPEAL COULD NOT BE FILED IN TIME AND THE SAID APPEAL IS NOW FILED WITH THE DELAY OF 10 DAYS . IN THIS REGARD, LD. COUNSEL FOR THE ASSESSEE FILED AN AFFIDAVIT STATING THE REASONS FOR NON-FILING THE APPEAL OF THE ASSESSEE IN TIME. FOR THE SAKE OF COMPLETENESS, THE RELEVANT PARA OF THE SAID AFFIDAVIT IS EXTRACTED HEREUNDER :- ITA NO.1500/PUN/2018 - 2 - 2) THAT WE FILED OUR 2ND APPEAL BEFORE HON'BLE TRIBUNAL ON RECEIPT OF THE CIT(A)'S ORDER ON 13-07-2018. THE SECOND APPEAL BEFORE TRIBUNAL WAS REQUIRED TO BE FILED ON OR BEFORE 12-09-2018 THAT IS WITHIN 60 DAYS. THE SAME WAS FILED ON 21-09-2018. THUS THERE OCCURRED A DELAY OF 10 DAYS IN FILING THE APPEAL. THERE WAS NO DELIBERATE INTENTION TO FILE THE APPEAL LATE. BALANCE OF CONVENIENCE IS IN OUR FAVOUR. THIS IS CO. OP. SOCIETY WITH MUTUALITY. DURING THIS PERIOD THE SOCIETY WAS BUSY WITH FINALIZING ITS ACCOUNTS AND AUDIT OF THE SAME. IN VIEW OF THIS THE SMALL DELAY OCCURRED BE CONDONED. 3. CONSIDERING THE ABOVE REASONS GIVEN BY THE ASSESSEE IN THE AFFIDAVIT, I FIND IT IS A FIT CASE FOR CONDONING THE DELAY OF 10 DAYS. AFTER CONDONING THE DELAY, I PROCEED TO ADJUDICATE THE APPEAL OF THE ASSESSEE IN THE FOLLOWING PARAGRAPHS. 4. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW BOTH THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN REJECTING THE CLAIM OF DEDUCTION U/S 80P(2)(I)(A) OF THE ACT. THE ASSESSEE-SOCIETY BEING CO-OPERATIVE CREDIT SOCIETY WAS ENGAGED IN THE BANKING ACTIVITIES WITH ITS MEMBERS ONLY. IT HAD NO RESERVE BANK LICENCE TO DO BANKING BUSINESS WITH THE OUTSIDERS. THE SOCIETY WAS ENTITLED TO DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. IT BE ALLOWED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN RELYING UPON THE HON'BLE SUPREME COURT JUDGMENT IN THE CITIZEN CO. OPERATIVE BANK 4(SUPRA) SINE THAT CASE WAS DECIDED ON PECULIAR FACTS OF THAT CASE AND WAS THEREFORE NOT A 'PRECEDENT' BEING LAW OF THE LAND AND IS SQUARELY DISTINGUISHABLE ON FACTS. IT BE HELD ACCORDINGLY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THIS APPEAL FILING IS DELAYED BY FEW DAYS. THE ASSESSEE-SOCIETY WAS PREVENTED BY SUFFICIENT CAUSE IN NOT FILING THE APPEAL WITHIN THE PRESCRIBED LIMITATION. THE DETAILED AFFIDAVIT WILL BE FILED EXPLAINING THE CAUSE FOR DELAY OF THE TIME OF HEARING OF THE APPEAL. THE APPEAL BE DECIDED THEN ON THE MERITS OF THE CASE. 4. THE APPELLANT CRAVES TO LEAVE, ADD/AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. 5. BRIEFLY STATED THE RELEVANT FACTS INCLUDE THAT THE ASSESSEE IS A COOPERATIVE SOCIETY REGISTERED UNDER THE MAHARASHTRA CO-OP. SOCIETY ACT, 1960. THE ASSESSEE FILED THE RETURN OF INCOME DECLARING NIL INCOME AFTER ITA NO.1500/PUN/2018 - 3 - CLAIMING OF DEDUCTION U/S 80P OF THE ACT. THE ASSESSING OFFICER TOOK THE CASE FOR LIMITED SCRUTINY IN VIEW OF THE CASS GUIDELINES AND FOUND THAT THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S 80P OF THE ACT. FURTHER, THE ASSESSING OFFICER NOTICED THAT THE MEMBER/NEW MEMBERS/FAMILY MEMBERS ARE INVOLVED IN THIS EARNING OF RECEIPT OF INCOME. FOLLOWING THE HONBLE SUPREME COURT JUDGEMENTS IN THE CASE OF CITIZEN CO-OPERATIVE SOCIETY LTD. VS. ACIT IN CIVIL APPEAL NO.10245/2017 DATED 08.08.2017, THE BENEFITS OF SECTION 80P(2) OF THE ACT WAS DENIED BY THE ASSESSING OFFICER. 6. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSESSEE RELIED ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. JANKALYAN NAGARI SAH. PAT SANSTHA LTD., 24 TAXMANN.COM 127 (PUNE-TRIB.) AND THE JUDGEMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. JAFAR MOMIN VIKAS CO-OP. CREDIT SOCIETY LTD., 49 TAXMANN.COM 571 (GUJ-HC) ETC IN SUPPORT OF CLAIM OF THE ASSESSEE. THE CIT(A) EXAMINED THE APPLICABILITY OF THE SAID DECISIONS AS WELL AS THE JUDGEMENT AND ALSO RELIED ON THE HONBLE SUPREME COURTS JUDGEMENT IN THE CASE OF CITIZEN CO-OPERATIVE SOCIETY LTD. (SUPRA), WHICH RECOGNIZES THE EXISTENCE OF TWO KINDS OF MEMBERS OF COOPERATIVE SOCIETY AND HELD THAT THE ASSESSEE DOES NOT AMOUNT TO COOPERATIVE BANK AND INVOKED THE PROVISIONS OF SECTION 80P(4) OF THE ACT. 7. AGGRIEVED WITH THE ABOVE DECISION OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. BEFORE ME, LD. COUNSEL FOR THE ASSESSEE EXPLAINED THE ABOVE FACTS OF THE CASE AND RELYING ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN ITA NO.1500/PUN/2018 - 4 - ASSESSEES OWN CASE VIDE ITA NO.1916/PUN/2018 FOR THE ASSESSMENT YEAR 2010-11 DATED 24.05.2019 AND SUBMITTED THAT THE SIMILAR ISSUE CAME UP FOR ADJUDICATION BEFORE THIS TRIBUNAL AND ISSUE IS NOW COVERED BY THE SAID ORDER OF THE TRIBUNAL (SUPRA). THE CONTENTS OF PARA 6 AND 7 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA) ARE RELEVANT IN THIS REGARD. 9. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDERS OF THE REVENUE AUTHORITIES. 10. ON HEARING BOTH THE SIDES AND PERUSING THE PAPER BOOK FILED BEFORE US AND CASE LAWS CITED ABOVE. ON CONSIDERING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE (SUPRA), I FIND IDENTICAL ISSUE CAME UP FOR ADJUDICATION BEFORE THIS TRIBUNAL AND THE TRIBUNAL, AS PER DISCUSSION GIVEN IN PARA 6 AND 7 OF ITS ORDER, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. FOR THE SAKE OF COMPLETENESS, THE CONTENTS OF PARA 6 AND 7 OF THE SAID ORDER OF THE TRIBUNAL (SUPRA) ARE EXTRACTED HEREUNDER :- 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DENIAL OF CLAIM OF DEDUCTION U/S 80P OF THE ACT. WE FIND THAT AO WHILE DENYING THE CLAIM OF ASSESSEE HAD HELD THE ASSESSEE CAN BE TREATED AS A CO-OPERATIVE BANK LOOKING AT THE NATURE OF ACTIVITIES OF THE ASSESSEE AND SINCE CO-OPERATIVE BANKS ARE NOT ELIGIBLE FOR DEDUCTION U/S 80P ON THE AMOUNT INVESTED IN BANKS OTHER THAN THOSE MENTIONED U/S 80P(2)(D) OF THE ACT, HE DENIED THE CLAIM OF DEDUCTION. WE FIND THAT ON IDENTICAL FACTS, THE CO-ORDINATE BENCH OF THE TRIBUNAL WHILE DECIDING THE ISSUE IN THE CASE OF JANKALYAN NAGRI SAHAKARI PAT SANSHTA LTD., (SUPRA) HAS DECIDED THE ISSUE IN ASSESSEES FAVOUR BY NOTING AS UNDER : 8. IT IS PERTINENT TO NOTE HERE THAT THE DEFINITION OF THE CO-OPERATIVE CREDIT SOCIETY IS GIVEN IN CLAUSE (CCII) OF SEC. 5 WHICH READS AS UNDER : CO-OPERATIVE CREDIT SOCIETY MEANS A CO-OPERATIVE SOCIETY, THE PRIMARY OBJECT OF WHICH IS TO PROVIDE FINANCIAL ACCOMMODATION TO ITS MEMBERS AND INCLUDES A CO-OPERATIVE LAND MORTGAGE BANK; 9. THE BANKING REGULATION ACT, 1949 DEFINES OF CO-OPERATIVE BANK IN CL.(CCI) OF SEC. 5 (AS INSERTED BY SEC. 56 OF THE SAID ACT) AND CO- ITA NO.1500/PUN/2018 - 5 - OPERATIVE CREDIT SOCIETY IS NOT INCLUDED BUT ITS IDENTITY IS KEPT SEPARATE BY WAY OF INDEPENDENT DEFINITION IN VIEW OF CLAUSE (CCII) OF SEC. 5 OF THE BANKING REGULATION ACT WHICH DEFINES WHAT IS MEANING OF CREDIT CO-OPERATIVE SOCIETY. ON PLAIN READING OF THE BANKING REGULATION ACT, 1949, NOWHERE IT IS SUGGESTED THAT THE TERM CO-OPERATIVE BANK ALSO INCLUDES CO-OPERATIVE CREDIT SOCIETY ALSO. MEANING OF ANY TERM OR EXPRESSION IS TO BE ASCERTAINED IN THE CONTEXT OF PROVISIONS OF REFERRED ACT. AS PER SUB-SEC. (4) OF SEC. 80P OF THE I. T. ACT, CO-OPERATIVE BANK MEANS STATE CO-OPERATIVE BANK, A CENTRAL CO-OPERATIVE BANK AND A PRIMARY CO-OPERATIVE BANK. IT IS SEEN THAT COOPERATIVE BANK IS DEPRIVED OF THE BENEFIT OF THE DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. AS PER THE INTERPRETATION GIVEN BY THE AO, ASSESSEE CO-OPERATIVE CREDIT SOCIETY PARTAKES THE CHARACTER OF THE PRIMARY CO-OPERATIVE BANK AND AS THE PRIMARY CO-OPERATIVE BANK IS INCLUDED IN THE DEFINITION OF THE COOPERATIVE BANK AND HENCE, IS NOT ENTITLED TO THE BENEFITS OF SEC. 80P(2)(A)(I) OF I. T. ACT. IN OUR OPINION, THIS IS NOT THE CORRECT INTERPRETATION. IT IS WELL SETTLED PRINCIPLE IN THE INTERPRETATION OF THE TAXING PROVISIONS THAT THE SAME ARE TO BE STRICTLY CONSTRUED AND THERE IS N ROOM FOR ANY INTENDMENT. THERE IS NO PRESUMPTION AS TO TAX.NOTHING IS TO BE READ OR NOTHING IS TO BE IMPLIED. ONE HAS TO FAIRLY LOOK INTO LANGUAGE USED BY THE PARLIAMENT. THE PARLIAMENT HAS ADOPTED THE DEFINITION OF THE CO-OPERATIVE BANK BY REFERING THE SAME AS GIVEN IN THE BANKING REGULATION ACT, 1949. IT IS CALLED LEGISLATION BY REFERENCE AND WE HAVE TO GIVE THE STRICT INTERPRETATION WHILE INTERPRETING THE EFFECT OF SUB-SEC. (4) TO SEC. 80 P. IN OUR OPINION, CO- OPERATIVE CREDIT SOCIETY IS DISTINCT AND SEPARATE FROM THE CO-OPERATIVE BANK NOR IT CAN BE SAID AS A PRIMARY CO-OPERATIVE BANK WITHIN THE MEANING OF BANKING REGULATION ACT, 1949. HENCE, THE ASSESSEEEE BEING A CO-OPERATIVE CREDIT SOCIETY IS ENTITLED FOR DEDUCTION U/S. 80 P(2)(A)(I) OF THE ACT. WE ACCORDINGLY UPHOLD THE ORDER OF THE LD CIT(A). 7. BEFORE US, IT IS ASSESSEES CONTENTION THAT THE FACTS IN THE YEAR UNDER CONSIDERATION ARE SIMILAR TO THE CASE OF JANKALYAN NAGRI SAHAKARI PAT SANSHTA LTD., (SUPRA) IN A.Y. 2007-08 BEFORE THE CO-ORDINATE BENCH OF THE TRIBUNAL. THE AFORESAID CONTENTION OF THE ASSESSEE HAS NOT BEEN CONTROVERTED BY REVENUE. REVENUE HAS ALSO NOT PLACED ANY CONTRARY BINDING DECISION IN ITS SUPPORT NOR HAS PLACED ANY MATERIAL TO DEMONSTRATE THAT THE ORDER PASSED BY THE TRIBUNAL IN THE CASE OF JANKALYAN NAGRI SAHAKARI PAT SANSHTA LTD., (SUPRA) IN A.Y. 2007-08 HAS BEEN SET ASIDE BY HIGHER JUDICIAL FORUM. WE THEREFORE, FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF JANKALYAN NAGRI SAHAKARI PAT SANSHTA LTD., (SUPRA) AND FOLLOWING THE SAME REASONING HOLD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION OF RS.13,52,960/- U/S 80P(2)(D) OF THE ACT IN RESPECT OF THE INTEREST EARNED FROM AMOUNT INVESTED IN PDCC BANK, RAJGURUNAGAR SAHAKARI BANK ETC. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 11. CONSIDERING THE SETTLED NATURE OF THE ISSUE AT THE LEVEL OF THE TRIBUNAL (SUPRA) AND FOLLOWING THE RULE OF CONSISTENCY, I AM OF THE OPINION, THE ITA NO.1500/PUN/2018 - 6 - SAID ISSUE SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE. THUS, THE RELEVANT GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 01 ST DAY OF OCTOBER, 2019. SD/- (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 01 ST OCTOBER, 2019. SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-6, PUNE; 4. THE PR.CIT-5, PUNE; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE