Sindhudurg Multipurpose Co op Society Ltd, Belgaum V. Income Tax Officer Ward 2 Belgaum, Belgaum

ITA 163/PAN/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6630 (ITAT-PANAJI)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Next Hearing Date: 02-06-2024
• Assessment Year: misc
• Appeal Filed On: 21-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HONABLE SUPREME
• Section: 80P; 2(19)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH : PANAJI [THROUGH VIRTUAL HEARING] BEFORE SHRI RAMA KANTA PANDA, VICE PRESIDENT AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER I.T.A.No.163/PAN./2023 [E-APPEAL] Assessment Year 2016-2017 Sindhudurg Multipurpose Co-op Society Ltd., 739, Angol Road, Tilakwadi, Belgaum – 590 006. Karnataka. PAN AABAS8153Q vs. The Income Tax Officer, Ward-2, Income Tax Office, Opp. Civil Hospital, Dr. Ambedkar Road, Belgaum – 590 001. Karnataka. (Appellant) (Respondent) For Assessee : Shri Pramod Vaidhya, Advocate For Revenue : Shri Sridhar Dora, Sr. DR Date of Hearing : 03.06.2024 Date of Pronouncement : 06.06.2024 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal, for assessment year 2016- 2017, arises against the National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/ 250/2023-24/1054818687(1), dated 02.08.2023, involving proceedings u/s.143(3) of the Income Tax Act, 1961 (in short “the Act”). Heard both the parties. Case file perused. 2. The assessee pleads the following substantive grounds in the instant appeal : 2 I.T.A.No. 163/PAN./2023 1. “The learned CIT(A) erred in law in passing confirming the addition made by A.O by disallowing deduction u/s 80P of Rs.40,18,822/- on the issue of entitlement of deduction in respect of nominal/associate members when the issue is decided in favour of the assessee by Hon’able Supreme Court in the case of Mavilayi Co-operative Bank 431 ITR 1 holding that dealings with nominal and associate members is entitled for deduction u/s80P of the Act. 2. The CIT(A) erred in not appreciating that i) The nominal and associate members are as defined in section 2(19) of the Income Tax Act 1961. ii) The governing law i.e. The Karnataka Co-operative Societies Act 1959 and the bye-laws of the assessee society recognize nominal and associate members. iii) Entire business and dealings are done only with the members of the society and there is no business with non-members, outsiders or with public at large. iv) SC decision in Citizen’s case is distinguishable on the facts of present case and applicable law. 3. The Appellant craves leave to add, alter, amend or modify any of the grounds of appeal.” 3. It emerges during the course of hearing with the able assistance coming from both the parties that the assessee’s sole substantive grievance herein claiming sec.80P deduction of Rs.40,18,822/-; is no more res integra in light of 3 I.T.A.No. 163/PAN./2023 the fact that this tribunal’s coordinate bench’s order dated 13.03.2024 in ITA.No.162/PAN./2023 in it’s own case for succeeding assessment year 2017-2018 has already accepted the same as under : “3. Coming to the first and foremost issue of sec.80P(2)(a)(i) deduction disallowance amounting to Rs.40,18,822/-; the Revenue vehemently argued that both the learned lower authorities have rightly rejected the same after finding that the corresponding income had been derived from nominal members as well as regular members. Mr. Shrikanth sought to buttress the point that the learned lower authorities have rejected the assessee’s claim of the impugned deduction only regarding the nominal members by quoting Citizen Co-op Society Ltd., Hyderabad vs. ACIT in Civil Appeal No.10245 of 2017 [arising out of SLP (C) No.20044 of 2015] dated 08.08.2017. He could hardly dispute hon’ble apex court’s recent landmark decision in Mavilayi Service Co-operative Bank Ltd., vs., CIT [2021] 431 ITR 1 (SC) has settled the issue that such a distinction is not permissible at the Revenue’s behest once it is found that the assessee concerned is followed the rigor of the State Co-operative law in enrolling the twin categories of members as well as deriving income from advances made to them. We thus 4 I.T.A.No. 163/PAN./2023 accept the assessee’s instant first and foremost substantive ground in very terms. 4. Next comes the latter issue of cash deposits addition amounting to Rs.7,39,500/- alleged to have made in both the lower authorities respective findings. The assessee’s only case is that the impugned sum represents the amounts received from members on the day of announcement of demonetization which had been duly credited in their respective accounts. We note in this factual backdrop that the learned CIT(A)'s findings have nowhere examined the assessee’s corresponding reconciliation in the lower appellate proceedings. Faced with the situation, we deem it appropriate to restore the instant latter issue back to NFAC for afresh adjudication as per law, after affording three effective opportunities of hearing subject to the rider that it is the assessee’s sole risk and responsibility to prove his case before the lower appellate authority in consequential proceedings. Ordered accordingly.” 4. The Revenue is fair enough in not pinpointing any specific distinction on facts or law during the course of hearing in both these assessment years. We thus adopt judicial consistency to accept the assessee’s instant sole substantive grievance in very terms. Ordered accordingly. 5 I.T.A.No. 163/PAN./2023 5. This assessee’s appeal is allowed in above terms. Order pronounced in the open Court on 06.06.2024 Sd/- Sd/- [R.K. PANDA] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 06 th June, 2024 VBP/- Copy to 1. The applicant 2. The respondent 3. The Pr. CIT, Panaji concerned. 4. D.R. ITAT, Panaji Bench, Panaji. 5. Guard File. //By Order// //True Copy // Sr. Private Secretary, ITAT, Pune Benches, Pune.