ITO-WARD-1, Chandrapur V. M/S COALCITY URBAN CREDIT CO-OP. SOCIETY, Chandrapur

ITA 158/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1666 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2015
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 02-04-2014
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER ITA NO. 158/NAG./2014 ( ASSESSMENT YEAR : 2009-10 ) INCOME TAX OFFICER WAD-1, AAYAKAR BHAVAN RAILWAY STATION ROAD CHANDRAPUR 442 401 APPELLANT V/S M/S. COALCITY URBAN CREDIT CO-OPERATIVE SOCIETY, MUL ROAD, CHANDRAPUR 442 401 PAN AAAAC3926G .... RESPONDENT ITA NO. 159/NAG./2014 ( ASSESSMENT YEAR : 2010-11 ) INCOME TAX OFFICER WAD-1, AAYAKAR BHAVAN RAILWAY STATION ROAD CHANDRAPUR 442 401 APPELLANT V/S M/S. COALCITY URBAN CREDIT CO-OPERATIVE SOCIETY, MUL ROAD, CHANDRAPUR 442 401 PAN AAAAC3926G .... RESPONDENT REVENUE BY : SHRI NARENDRA KANE ASSESSEE BY : NONE DATE OF HEARING 22.07.2015 DATE OF ORDER 18.08.20 15 M/S. COALCITY URBAN CREDIT CO-OPERATIVE SOCIETY 2 O R D E R PER BENCH THESES APPEALS FILED BY THE REVENUE ARE EMANATING FRO M THE ORDERS OF EVEN DATED 15 TH JANUARY 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS)-II, NAGPUR, FOR THE ASSESSMENT YEAR 2009-10 AND 2010-11, RESPECTIVELY. SINCE COMMON ISSUE INVOLVE, EXCEPT VARIATION IN FIGURES, IN BOTH THESE APPEALS, THEREFORE , AS A MATTER OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER:- GROUND OF APPEAL FOR A.Y. 2009-10 AND 2010-11 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT(A) IS CORRECT IN HOLDING THAT T HE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I)? 2. WHETHER THE LEARNED CIT(A) HAS ERRED IN HOLDING T HAT ASSESSEE IS NOT A CO-OPERATIVE BANK FOR THE PURPOSE OF SECTION 80P(4) OF THE ACT? 3. WHETHER THE LEARNED CIT(A) HAS NOT ERRED IN FAILING TO UPHOLD THE FINDING OF THE A.O. THAT THE ASSESSEE IS THE CO- OPERATIVE SOCIETY WHICH IS ALSO A CO-OPERATIVE BANK AS PER PART-V OF THE BANKING REGULATION ACT? 2. AT THE OUTSET, PARTIES APPEARING BEFORE ME HAVE INFORME D THAT THE ISSUE, AS RAKED UP BY THE REVENUE, NOW STOOD SETTLED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS OF THIS VERY TRIBUNAL. ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) WAS M/S. COALCITY URBAN CREDIT CO-OPERATIVE SOCIETY 3 COMPLETED ON 22 ND NOVEMBER 2011 AND 18 TH DECEMBER 2012 RESPECTIVELY, WHEREIN IT WAS HELD BY THE ASSESSING OFFI CER THAT THE ASSESSEE IS A CO-OPERATIVE CREDIT SOCIETY, INVOLVING I N BANKING BUSINESS BY PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE AS SESSEE HAD CLAIMED A DEDUCTION UNDER SECTION 80P OF THE ACT OF ` 13,46,765 FOR THE ASSESSMENT YEAR 2009-10 AND ` 1 0,19,910 FOR THE ASSESSMENT YEAR 2010-11. THE ASSESSING OFFICER HAS MENTIONED THAT SECTI ON 80P(4), WHICH WAS INSERTED BY FINANCE ACT, 2006, W.E.F. 1 ST APRIL 2007, ACCORDING TO WHICH, EXEMPTION PROVISIONS OF SECTION 8 0P, SHALL NOT APPLY IN RELATION TO ANY CO-OPERATIVE BANK OTHER THAN A PRI MARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTUR AL AND RURAL BANK. THE ASSESSING OFFICER HAS ALSO REFERRED EXPLANATION THEREI N ACCORDING TO WHICH THE PRIMARY CO-OPERATIVE AGRICULTURAL AND RUR AL DEVELOPMENT BANK MEANS A SOCIETY HAVING ITS AREA OF OPERATION CONFINED TO A TALUKA AND THE PRINCIPLE OBJECT IS TO PROVIDE FOR LONG TERM CRE DIT FOR AGRICULTURAL AND RURAL DEVELOPMENT ACTIVITIES. AFTER INVOKING THE SAID PROVISIONS, THE ASSESSEE WAS DENIED THE EXEMPTION OF SECTION 80P AND THE CLAIM WAS DISALLOWED. 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 BEFOR E ME. M/S. COALCITY URBAN CREDIT CO-OPERATIVE SOCIETY 4 4. SINCE THE COORDINATE BENCH OF THE TRIBUNAL HAS ALREAD Y TAKEN A VIEW IN SEVERAL CASES IN THE PAST, THEREFORE, WE HAVE NO REASON TO TAKE ANY OTHER VIEW BUT TO FOLLOW THE VIEW ALREADY TAKEN. WE REPRODUCE 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 SANST HA 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 ITAT 'E' BENCH, (AT SERIAL NO. 1, VIDE ITA NO. 68/NAG/2012 (AY 200 8-09) 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 F AVOUR 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 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 M/S. COALCITY URBAN CREDIT CO-OPERATIVE SOCIETY 5 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 C REDIT 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 ISS UE 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. 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-OPERA TIVE SOCIETIES ARE ENGAGED IN PROVIDING CREDIT FACILITIES TO IT S MEMBERS. IT IS NOT AT ALL THE CASE THAT THEY ARE PROVIDING SERVICES O R M/S. COALCITY URBAN CREDIT CO-OPERATIVE SOCIETY 6 FACILITIES TO THE PUBLIC AT LARGE. THE DECISION 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 F ACTS OF THE CASE AND RATIO EMANATING THEREFROM ARE NOT AT ALL APPLICABLE TO THE FACTS OF THE CASE. WE NOTE THAT NAGPUR TR IBUNAL ITSELF HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSES IN BA TCH 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 T O 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 I N 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 FOR BOTH THE YEARS UNDER APPEAL ARE HEREBY DISMISSED. 6. IN THE RESULT, REVENUES APPEALS FOR A.Y. 2009-10 AND 2010-11 STAND 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. COALCITY URBAN CREDIT CO-OPERATIVE SOCIETY 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