ITO, Ward-1(5), Jodhpur V. M/s. Pushtikar Sakh Sahakari Samiti Ltd., Jodhpur

ITA 176/JODH/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2197 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Benefit of exemption; Co-operative Credit Society; Set aside
• Section: 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER I.T.A. NO. 176/JODH/2018 (ASSESSMENT YEAR 2015-16) INCOME TAX OFFICER WARD 1(5), JODHPUR. VS M/S PUSHTIKAR SAKH SAHAKARI SAMITI LTD., 4F-71, NEW POWER HOUSE ROAD, JODHPUR. (APPELLANT) (RESPONDENT) PAN: AADAP0396G REVENUE BY SHRI ABHIMANYU SINGH YADAV JCIT-DR ASSESSEE BY NONE DATE OF HEARING 16/03/2020 DATE OF PRONOUNCEMENT 19/03/2020 O R D E R PER: SANDEEP GOSAIN, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-1, JODHPUR DATED 26/02/2018 FOR THE A.Y.2015 -16. THE GROUNDS TAKEN BY THE REVENUE READS AS UNDER: 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)-1, JODHPUR HAS ERRED IN:- 1. THE CIT(A)-1 JODHPUR IS JUSTIFIED IN LAW IN HOL DING THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80P OF THE IT ACT, 1961 BY IGNORING THAT THE ASSESSEE IS A PRIMARY CO-OPERATIV E BANK AS PER SECTION 56(C)(I)(CCA) OF THE BANKING REGULATION ACT ,1946. 2. THE CIT(A)-1 JODHPUR IS JUSTIFIED IN LAW IN HOL DING THAT THE ASSESSEE IS NOT A CO-OPERATIVE BANK BY IGNORING THA T THE ASSESSEE FULFILLED CONDITIONS APPLICABLE TO CO-OPER ATIVE BANKS AS 2 ITA 176/JODH/2018 ITO VS M/S PUSHTIKAR SAKH SAHAKARI SAMITI LTD. PER PART V OF THE BANKING REGULATION ACT, 1949 AND IS THEREFORE, NOT ELIGIBLE FOR SUCH DEDUCTION AS PROVIDED U/S 80 P(4) OF THE IT ACT, 1961. 3. THE CIT(A)-1 JODHPUR IS JUSTIFIED IN ALLOWING D EDUCTION U/S 80P(2)(A)(I) BY IGNORING THE FACT THAT THE ASSESSEE SOCIETY ITSELF ADMITTED DOING BANKING BUSINESS AND, THEREFORE, AS PER EXPLANATION (A) TO SECTION 80P(4) SUCH DEDUCTION IS NOT ADMISSIBLE TO IT. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY OR ALL THE GROUNDS OF APPEAL ON OR BEFORE THE DATE THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 2. NO BODY APPEARED ON BEHALF OF THE ASSESSEE IN SP ITE OF GIVING THE OPPORTUNITY, THEREFORE, THE BENCH DECIDED TO DISPOS E OFF THE APPEAL AFTER CONSIDERING THE CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE AND THE MATERIAL PLACED ON RECORD. 3. THE GRIEVANCE OF THE REVENUE RELATES TO ACTION O F LD. CIT(A) IN DELETING THE ADDITION BY THE A.O. DECLINI NG THE CLAIM OF DEDUCTION U/S 80P OF THE ACT. 4. WE OBSERVE THAT THE LD. CIT(A) HAS ALLOWED THE A PPEAL OF THE ASSESSEE WHEREIN IT HAS CLAIMED DEDUCTION U/S 8 0P OF THE ACT BY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSES SEES OWN CASE PASSED IN ITA NOS. 146 TO 149/JODH/2015 FOR TH E A.Y. 2007-08 & 2009-10 TO 2011-12 DATED 15/3/2016. THE P RECISE OBSERVATION OF THE LD. CIT(A) IS AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE AOS ORDER AND SUBMISSIONS OF THE APPELLANT. I FIND THAT THE ISSUE UNDER CONSIDERATION IS SQUARE LY COVERED IN FAVOUR OF THE 3 ITA 176/JODH/2018 ITO VS M/S PUSHTIKAR SAKH SAHAKARI SAMITI LTD. APPELLANT BY THE ORDER OF THE HONBLE JURISDICTIONA L ITAT IN THE CASE OF M/S PUSHTIKAR SAKH SAHAKARI SAMITI LTD., IN ITA NOS. 14 6 TO 149/JODH/2015 FOR AY 2007-08 & 2009-10 TO 2011-12 DATED 15-03-2016. TH E OPERATIVE PART OF THE HONBLE ITATS ORDER IS REPRODUCED AS BELOW:- '7. WE FIND THAT THE ISSUE IS NOW COVERED BY THE D ECISION OF THE HON'BLE KARNATAKA HIGH COURT IN FAVOUR OF THE ASSESSEE IN T HE CASE OF CIT VS. SRI BILURU GURUBASAVL PATTINA SAHAKARI SANGHA NIYAM ITHA, BAGALKOT, IN ITA NO.5006/2013 DATED 05-02-2014, WHICH WAS FOLLOW ED IN THE CASES OF GENERAL INSURANCE EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD. AND IN THE CASE OF VASAVI MULTIPURPOSE SOUHARDA SAHAKAR I NIYAMITHA, ITA NO.505/2013 DATED 27/06/2014, HAS CLEARLY HELD THAT A CO-OPERATIVE SOCIETY REGISTERED AS CO-OPERATIVE SOCIETY, PROVIDI NG CREDIT FACILITIES TO MEMBERS AND NOT REGISTERED WITH THE RBI CANNOT BE D ENIED THE EXEMPTION UNDER SECTION 80P(1) OF THE IT ACT. THE O PERATIVE PART OF THE JUDGMENT READS AS FOLLOWS:- THEREFORE, THE INTENTION OF THE LEGISLATURE IS CL EAR, IF A COOPERATIVE BANK IS EXCLUSIVELY CARRYING ON BANKING BUSINESS, T HEN THE INCOME DERIVED FROM THE SAID BUSINESS CANNOT BE DEDUCTED I N COMPUTING THE TOTAL INCOME OF THE ASSESSEE. THE SAID INCOME I S LIABLE FOR TAX. A CO-OPERATIVE BANK AS DEFINED UNDER THE BANKING RE GULATION ACT INCLUDES THE PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO- OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THE LEGISLATURE DID NOT WANT TO DENY THE SAID BENEFITS TO A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTUR AL AND RURAL DEVELOPMENT BANK. THEY DID NOT WANT TO EXTEND THE S AID BENEFIT TO A CO-OPERATIVE BANK WHICH IS EXCLUSIVELY CARRYING O N BANKING BUSINESS I.E. THE ITA NO.LL49/BANG/2015 SHRI HOLEHU CHESHWAR CO- OP CREDIT SOCIETY LTD. PAGE 4 OF 6 PURPOSE OF THIS AMENDMENT. THEREFORE, AS THE ASSESSEE IS NOT A CO-OPERATIVE BA NK CARRYING ON EXCLUSIVELY BANKING BUSINESS AND AS IT DOES NO POSS ESS A LICENCE FROM RESERVE BANK OF INDIA TO CARRY ON BUSINESS, IT IS NOT A CO- OPERATIVE BANK. IT IS A CO-OPERATIVE SOCIETY WHICH ALSO CARRIES ON THE BUSINESS OF LENDING MONEY TO ITS MEMBERS WHICH IS COVERED UNDER SECTION 80P(2)(A)(I) I.E. CARRYING ON THE BUS INESS OF BANKING FOR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE OBJECT OF THE AFORESAID AMENDMENT IS NOT TO EXCLUDE THE BENEFIT E XTENDED UNDER SECTION 80P(1) TO SUCH SOCIETY..IN THE INSTANT C ASE, WHEN THE 4 ITA 176/JODH/2018 ITO VS M/S PUSHTIKAR SAKH SAHAKARI SAMITI LTD. STATUS OF THE ASSESSEE IS A CO-OPERATIVE SOCIETY AN D IS NOT A CO- OPERATIVE BANK, THE ORDER PASSED BY THE ASSESSING A UTHORITY EXTENDING THE BENEFIT OF EXEMPTION FROM PAYMENT OF TAX UNDER SECTION 80P(2)(A)(I) OF THE ACT IS CORRECT. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND NOT A COOPERATIVE BANK AND, THEREFORE, ENTITLED TO DEDUCTION UNDER SEC. 80P OF THE ACT. WE THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DIREC T THE ASSESSING OFFICER TO ALLOW DEDUCTION UNDER SEC. 80P OF THE AC T TO THE ASSESSEE.' 5. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONCE DED THE FACT THAT THE ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE. 6. AS THE FACTS AND CIRCUMSTANCES OF THE CASE DURIN G THE YEAR UNDER CONSIDERATION ARE SAME, THEREFORE, RESPECTFUL LY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR AL LOWING THE CLAIM OF DEDUCTION U/S 80P OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH, 2020. SD/- SD/- (R.C. SHARMA) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19/03/2020 *RANJAN COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 5 ITA 176/JODH/2018 ITO VS M/S PUSHTIKAR SAKH SAHAKARI SAMITI LTD. 4. THE CIT(A) 5. THE DR 6. GUARD FILE (ITA NO. 176/JODH/2018) ASSISTANT REGISTRAR JODHPUR BENCH