M/s.Karunagapally Service Co-op Bank Ltd, Kollam V. The iTO< Wd-5, Alappuzha, Alappuzha

ITA 155/COCH/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2285 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-09-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: T M SREEDHARAN
• Keywords: Principle of natural justice; Benefit of exemption
• Section: 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM ITA NO. 155 / COCH/201 8 : ASST.YEAR 201 1 - 201 2 M/S.KARUNAGAPALLY SERVICE CO - OPERATIVE BANK LIMITED C/O.T.M.SREEDHARAN & ASSOCIATES, ADVOCATES 2 ND FLOOR, KALYAN CHAMBERS CHITTOOR ROAD, NEAR SOUTH JUNCTION, COCHIN - 682 016 PAN : AAAJK0728P. VS. THE INCOME TAX OFFICER WARD 5 ALAPPUZHA. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI.T.M.SREEDHARAN RESPONDENT BY : SMT. A.S.BINDHU DATE OF HEARING : 03.09 .2018 DATE OF PRONOUNCEMENT : 03 .09.2018 O R D E R PER GEORGE GEORGE K, JM THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST CIT(A)S ORDER DATED 21.02.2018. THE RELEVANT ASSESSMENT YEAR IS 2011 - 2012. 2. THE GROUND RAISED READ AS FOLLOWS: - 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOTTAYAM IN ITA NO.A37/CIT(A)/KTM/16 - 17 DATED 21.2.2018, IS OPPOSED TO LAW, TO FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE CIT (A) SHOULD HAVE FOUND THAT THE ASSESSING OFFICER DID NOT AFFORD REASONABLE OPPORTUNITY TO THE APPELLANT TO FURNISH RETURN OF INCOME AND TO SATISFY THE LEGAL FORMALITIES IN REGARD ITA NO. 155 / COCH /201 8. M/S. KARUNAGAPALLY SERVICE CO - OP BANK LTD. 2 TO THE NOTICE U/S.148 DATED 16.6.2015 FOR THE RELEVANT ASST. YEAR. 3 . IT IS FURTHER RESPECTFULLY SUBMITTED THAT ADEQUATE OPPORTUNITY WAS ALSO NOT AFFORDED TO ANSWER NOTICE U/S.142(1) DATED 4.9.2015 BY THE ASSESSING OFFICER WHICH CONSTITUTE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 4. IN THIS CONNECTION, IT IS RESPECTFUL LY SUBMITTED THAT THERE IS CONSIDERABLE AMBIGUITY AND LACK OF CLARITY WITH REGARD TO THE ASSESSMENT OF SURPLUS OF INCOME OVER EXPENDITURE IN THE CASE OF CO - OPERATIVE INSTITUTIONS SUCH AS THAT OF THE APPELLANT FOR THE RELEVANT ASST. YEAR AND THE STATUTORY REQUIREMENTS OF FILING RETURN OF INCOME. THE CLARIFICATION SOUGHT FOR BY THE APPELLANT IN THIS REGARD STOOD UNANSWERED BY THE ASSESSING OFFICER WHICH DISABLED THE APPELLANT FROM FILING THE RETURN OF INCOME. 5. WITHOUT PREJUDICE TO THE ABOVE CONTENTIONS, THE APPELLANT FURTHER RESPECTFULLY SUBMITS THAT THERE IS FAILURE ON THE PART OF THE ASSESSING OFFICER TO CONSIDER THE SCOPE OF SECTION 80P(2)(A)(I) IN THE CONTEXT AND SETTING OF CHAPTER VI A PROVIDING FOR DEDUCTION TO BE MADE IN COMPUTING 'TOTAL INCOME'. 6. IT IS RESPECTFULLY SUBMITTED THAT AS PER SECTION 80P(1) IN THE CASE OF AN ASSESSEE BEING A CO - OPERATIVE SOCIETY, WHERE THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB - SECTION (2), THERE SHALL BE DEDUCTED IN ACCORDANCE WITH AND SUBJECT TO T HE PROVISIONS OF THAT SECTION, THE SUMS SPECIFIED IN SUB - SECTION (2) IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. THE JUDGMENT OF THE HON'BLE APEX COURT REPORTED IN (2017) 291 CTR 1 (SC) IN THE CASE OF CIT AND ANOTHER VS. YOKOGAWA INDIA LTD. APPLIED TO THE COMPUTATION OF TOTAL INCOME. THE ABOVE PRINCIPLE OF LAW SHOULD HAVE BEEN APPLIED. ITA NO. 155 / COCH /201 8. M/S. KARUNAGAPALLY SERVICE CO - OP BANK LTD. 3 7. IT IS RESPECTFULLY SUBMITTED THAT THE COMPUTATION OF TOTAL INCOME BY NOT EXCLUDING THE SUMS SPECIFIED IN SUB - SECTION (2) IS CONTRARY TO LAW AND LIABLE TO BE SET ASIDE. THE CONTRARY VIEW TAKEN BY THE CIT (A) IS ALSO ILLEGAL AND UNSUSTAINABLE. 8. WITHOUT PREJUDICE, THE APPELLANT HUMBLY PRAYS THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT MAY BE AFFORDED AN OPPORTUNITY TO REGULAR IZE THE CLAIM FOR DEDUCTION, IF FOUND NECESSARY, TO ENJOY THE BENEFIT OF EXEMPTION U/S.80P(2) (A)(I). 9. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GROUND AT THE TIME OF HEARING. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, T HE APPELLANT HUMBLY PRAYS THAT THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, MAY KINDLY BE PLEASED TO SET ASIDE THE ASST. ORDER AND ILLEGAL COMPUTATION OF INCOME AND DEMAND, ALLOW THE APPEAL AND RENDER JUSTICE. 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: - THE ASSESSEE IS A CO - OPERATIVE SOCIETY PROVIDING CREDIT FACILITIES TO ITS MEMBERS. FOR THE ASSESSMENT YEAR 2011 - 2012, THE ASSESSEE HAD TAXABLE INCOME AND WAS STATUTORILY LIABLE TO FILE THE RETURN OF INCOME U/S 139 OF THE I.T.ACT. HOWEVER, T HE ASSESSEE DID NOT FILE ITS RETURN OF INCOME, AND THEREFORE, THE A.O. ISSUED NOTICE U/S 148 OF THE I.T.ACT. IN RESPONSE TO THE NOTICE ISSUED U/S 148, NO RETURN OF INCOME WAS FILED BY THE ASSESSEE. HENCE, THE ASSESSMENT U/S 144 R.W.S. 147 OF THE I.T.ACT WA S COMPLETED VIDE ORDER DATED 29.06.2016 BY ESTIMATING THE TOTAL INCOME AT RS.37,89,531. ITA NO. 155 / COCH /201 8. M/S. KARUNAGAPALLY SERVICE CO - OP BANK LTD. 4 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE ONLY ISSUE THAT WAS ARGUED BEFORE THE FIRST APPELLATE AUT HORITY WAS THAT THE ASSESSEE WAS ENTITLED TO THE CLAIM OF DEDUCTION U/S 80P(2)(A)(I) OF THE I.T.ACT. THE CIT(A) REJECTED THE APPEAL FILED BY THE ASSESSEE. THE CIT(A) FOLLOWING THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE CHIRAKK AL SERVICE CO - OPERATIVE BANK LTD. & ORS. V. CIT [(2016) 384 ITR 490 (KER.)] HELD THAT SINCE THE ASSESSEE HAS NOT FILED ITS RETURN OF INCOME CLAIMING DEDUCTION U/S 80P(2) OF THE I.T.ACT, THE CLAIM CANNOT BE CONSIDERED. 5. AGGRIEVED BY THE ORDER OF THE CIT (A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL . THE LEARNED AR RELIED ON THE GROUNDS. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT THE ISSUE IN QUESTION IS SQUARELY COVERED IN FAVOUR OF THE REVENUE BY THE D ECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF THE CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. & ORS. (SUPRA) . 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. & ORS. (SUPRA), HAD CATEGORICALLY HELD THAT NO DEDUCTION U /S 80P SHALL BE ALLOWED WHEN NO RETURN OF INCOME HAS BEEN FILED FOR A PARTICULAR ITA NO. 155 / COCH /201 8. M/S. KARUNAGAPALLY SERVICE CO - OP BANK LTD. 5 ASSESSMENT YEAR. SINCE THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR, DEDUCTION U/S 80P(2) OF THE I.T.ACT CANNOT BE GRANTED, IN THE LIGHT OF THE DICTUM LAID DOWN BY THE JURISDICTIONAL HIGH COURT. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 03 RD DAY OF SEPTEMBER, 2018 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIA L MEMBER COCHIN ; DATED : 03 RD SEPTEMBER, 2018 . DEVDAS* COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (APPEALS) - KOTTAYAM . 4. THE PR.CIT KOTTAYAM . 5. DR, ITAT, COCHIN 6 . GUARD FILE.