Income Tax Officer, Ward-2, Bagalkot V. M/s. Vijaya Souharda Credit Sahakari Ltd, Bagalkot

ITA 1821/BANG/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8222 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 28-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: CHAITANYA V MUDRABETTU
• Keywords: Additional evidence
• Section: 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO S . 1821 & 1822 / BANG/201 8 ASSESSMENT YEAR S : 2012 - 13 & 2013 - 14 THE INCOME TAX OFFICER, WARD 2, BAGALKOT. VS. M/S. VIJAYA SOUHARDA CREDIT SAHAKARI LTD., NIRANI SUGARS ENCLAVE, VIJAYA NAGAR, TQ: MUDHOL, DIST: BAGALKOT. PAN: AAHFV0308H APPELLANT RESPONDENT APPELLANT BY : SHRI R.N. SIDDAPPAJI, ADDL. CIT (DR) RESPONDENT BY : SHRI CHAITANYA V. MUDRABETTU, ADVOCATE DATE OF HEARING : 27 . 1 1 .2018 DATE OF PRONOUNCEMENT : 31 . 1 2 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER BOTH THESE APPEALS ARE FILED BY THE REVENUE AND THE SE ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A)-BELAGAVI BOTH DATED 0 7.03.2018 FOR ASSESSMENT YEARS 2012-13 AND 2013-14. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR T HE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE REVENUE FOR ASSESSMENT YEAR 2012-13 IN ITA NO. 1821/BANG/2018 ARE AS UNDER. 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(APPEALS) ERRED IN ADMITTING ADDITIONAL EVIDENCE IN THE FORM OF AFF IDAVIT IN CONTRAVENTION OF RULE 46A SINCE THE ASSESSING OFFIC ER WAS NOT PROVIDED WITH AN OPPORTUNITY TO EXAMINE THE CONTENT S OF THE AFFIDAVIT FILED BY THE ASSESSEE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(APPEALS) ERRED IN ACCEPTING AS CORRECT THE AFFIDAVIT OF THE ASSESS EE SOCIETY WITHOUT EXAMINING THE BALANCE-SHEET WHEREIN, THE CATEGORY O F MEMBERS DEALT WITH BY THE ASSESSEE SOCIETY CLEARLY INDICATED THAT THE ASSESSEE IS NOT DOING BUSINESS WITH MEMBERS ALONE. 3. THE LD CIT(A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE OF HON'BLE APEX COURT OUGHT TO HAVE CALLED FOR REMAND REPORT I N REGARD TO WHETHER THE ASSESSEE IS A COOPERATIVE SOCIETY MEANT FOR ITS MEMBERS ITA NOS. 1821 & 1822/BANG/2018 PAGE 2 OF 4 ONLY AND WHETHER ANY INCOME WAS EARNED BY WAY OF IN VESTMENT/LOANS ETC TO NON-MEMBERS 4. THE LD.CIT(A) ERRED IN NOT APPLYING THE RATIO OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CITIZEN CO-OP SOCIETY LTD, HYDERABAD V. ACIT, C-9(1), HYDERABAD IN CIVIL APPEA L NO.10245 OF 2017 (ARISING OUT OF SLP (C) NO.20044 OF 2015) DATE D 8.08.2017 SINCE THE ASSESSEE IS ALSO CATERING TO THE CATEGORY OF MEMBERS CALLED ASSOCIATE MEMBERS WHICH IS NOT AKIN TO REGULAR MEMB ER. 5. THE LD.CIT(A) ERRED IN COMING TO THE CONCLUSION THAT THE ASSESSEE SOCIETY IS A CO-OPERATIVE SOCIETY MEANT ONLY FOR IT S MEMBERS AND ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) I GNORING THE RATIO LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF CITIZEN CO-OP SOCIETY LTD. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT(APPEALS) MAY BE SET ASIDE AND THAT THE ORDER OF THE ASSESSING OFFICER BE RESTORED . 3. SIMILARLY, THE GROUNDS RAISED BY THE REVENUE FOR ASSESSMENT YEAR 2013-14 IN ITA NO. 1822/BANG/2018 ARE AS UNDER. 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(APPEALS) ERRED IN ADMITTING ADDITIONAL EVIDENCE IN THE FORM OF AFF IDAVIT IN CONTRAVENTION OF RULE 46A SINCE THE ASSESSING OFFIC ER WAS NOT PROVIDED WITH AN OPPORTUNITY TO EXAMINE THE CONTENT S OF THE AFFIDAVIT FILED BY THE ASSESSEE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(APPEALS) ERRED IN ACCEPTING AS CORRECT THE AFFIDAVIT OF THE ASSESS EE SOCIETY WITHOUT EXAMINING THE BALANCE-SHEET WHEREIN, THE CATEGORY O F MEMBERS DEALT WITH BY THE ASSESSEE SOCIETY CLEARLY INDICATED THAT THE ASSESSEE IS NOT DOING BUSINESS WITH MEMBERS ALONE. 3. THE ID CIT(A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE OF HON'BLE APEX COURT OUGHT TO HAVE CALLED FOR REMAND REPORT I N REGARD TO WHETHER THE ASSESSEE IS A COOPERATIVE SOCIETY MEANT FOR ITS MEMBERS ONLY AND WHETHER ANY INCOME WAS EARNED BY WAY OF IN VESTMENT/LOANS ETC TO NON-MEMBERS. 4. THE ID.CIT(A) ERRED IN NOT APPLYING THE RATIO OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CITIZEN CO-OP SOCIETY LTD, HYDERABAD V. ACIT, C-9(1), HYDERABAD IN CIVIL APPEA L NO.10245 OF 2017 (ARISING OUT OF SLP (C) NO.20044 OF 2015) DATE D 8.08.2017 SINCE THE ASSESSEE IS ALSO CATERING TO THE CATEGORY OF MEMBERS CALLED ASSOCIATE MEMBERS WHICH IS NOT AKIN TO REGULAR MEMB ER. 5. THE LD.CIT(A) ERRED IN COMING TO THE CONCLUSION THAT THE ASSESSEE SOCIETY IS A CO-OPERATIVE SOCIETY MEANT ONLY FOR IT S MEMBERS AND ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) I GNORING THE RATIO ITA NOS. 1821 & 1822/BANG/2018 PAGE 3 OF 4 LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF CITIZEN CO-OP SOCIETY LTD. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT(APPEALS) MAY BE SET ASIDE AND THAT THE ORDER OF THE ASSESSING OFFICER BE RESTORED . 4. AT THE VERY OUTSET IT WAS SUBMITTED BY LD. DR OF REVENUE THAT IN THE PRESENT CASE, THE ASSESSEE IS A SOUHARDA CREDIT SAHAKARI LT D. AND AS PER THE TRIBUNAL ORDER RENDERED IN THE CASE OF M/S. UDAYA S OUHARDA CREDIT CO- OPERATIVE SOCIETY LTD. VS. ITO IN ITA NO. 2831/BANG /2017 DATED 17.08.2018, IT WAS HELD BY THE TRIBUNAL THAT SINCE NO CERTIFICATE OF REGISTRATION WAS PLACED BEFORE THE TRIBUNAL IN THE NAME OF UDAYA SOUHARDHA CREDIT CO-OPERATIVE SOCIETY LTD., THE TRI BUNAL WAS UNABLE TO UNDERSTAND HOW THE ASSESSEE CAN CLAIM IT TO BE THE CO-OPERATIVE SOCIETY IN THE ABSENCE OF PROPER REGISTRATION UNDER THE KARNAT AKA CO-OPERATIVE SOCIETIES ACT. HE POINTED OUT THAT IN THAT CASE, T HE MATTER WAS RESTORED BACK TO THE FILE OF AO TO REEXAMINE ALL RELEVANT AS PECTS BY MAKING NECESSARY ENQUIRY AND INVESTIGATION AND ALSO BY PAS SING A REASONED ORDER IN THIS REGARD. HE SUBMITTED A COPY OF THIS TRIBUN AL ORDER AND POINTED OUT THAT PARA 13 OF THIS TRIBUNAL ORDER IS RELEVANT. T HE LD. AR OF ASSESSEE SUPPORTED THE ORDER OF CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, WE REPRODUCE PARA NO. 13 OF THIS TRIBUNAL ORDER RENDERED IN THE CASE OF UDAYA SOUHARDA CREDIT CO-OPERATIVE SOCIETY LTD. VS. ITO (SUPRA). THE SAM E IS AS UNDER. 13. WE HAVE ALSO CAREFULLY PERUSED THE CAUSE TITLE IN THE ASSESSMENT ORDER AND IN THE CAUSE TITLE OF THE ASSE SSMENT ORDER, WE FIND THAT ASSESSMENT ORDER WAS PASSED IN THE NAME O F UDAYA SOUHARDA CREDIT CO-OPERATIVE SOCIETY LTD., WHEREAS NO CERTIFICATE OF REGISTRATION WAS PLACED BEFORE US IN THE NAME OF UDAYA SOUHARDHA CREDIT CO-OPERATIVE SOCIETY LTD. THEREFOR E, WE ARE UNABLE TO UNDERSTAND HOW THE ASSESSEE CAN CLAIM IT TO BE THE CO- OPERATIVE SOCIETY IN THE ABSENCE OF PROPER REGISTRA TION UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT. CREATION OF C O-OPERATIVE SOCIETY UNDER THE CO-OPERATIVE SOCIETIES ACT IS DOU BTFUL. THUS THE CLAIM OF DEDUCTION UNDER SECTION 80P CANNOT BE ALLO WED. AS PER THE PROVISIONS OF SECTION 80P OF THE ACT, DEDUCTION CAN ONLY BE ALLOWED TO THE CO-OPERATIVE SOCIETIES REGISTERED UN DER THE CO- OPERATIVE SOCIETIES ACT. WITHOUT A PROPER REGISTRAT ION UNDER CO- OPERATIVE SOCIETIES ACT, NOBODY CAN CLAIM IT TO BE CO-OPERATIVE SOCIETY AS THE ACTIVITIES OF THE CO-OPERATIVE SOCIE TIES ARE TO BE CONTROLLED UNDER THE CO-OPERATIVE SOCIETIES ACT THR OUGH REGISTRAR ITA NOS. 1821 & 1822/BANG/2018 PAGE 4 OF 4 OF THE COOPERATIVE SOCIETIES. SINCE ALL THESE NEW P OINTS HAVE BEEN RAISED DURING THE COURSE OF HEARING BEFORE US AND A CCORDING TO US ALL THESE POINTS GOES TO THE ROOT OF THE CASE, WE A RE OF THE VIEW THAT PROPER ADJUDICATION OF THE ISSUES IS REQUIRED BY TH E AO. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE THE MATTER TO THE AO TO REEXAMINE ALL THESE ASPECTS BY MAKING NECESSARY ENQUIRY AND INVESTIGATION AND ALSO BY PAS SING A REASONED ORDER IN THIS REGARD. SINCE WE HAVE RESTOR ED THE MATTER TO THE AO, WE FIND NO JUSTIFICATION TO ADJUDICATE T HE ISSUE RAISED ON MERIT. ACCORDINGLY, ORDER OF THE CIT (A) IS SET ASI DE AND MATTER IS RESTORED TO THE AO FOR ADJUDICATION OF THE IMPUGNED ISSUE IN TERMS INDICATED ABOVE. 6. WE FIND THAT IN THE PRESENT CASE ALSO, THE NAME OF ASSESSEE IS VIJAYA SOUHARDA CREDIT SAHAKARI LTD. AND NO CERTIFICATE OF REGISTRATION WAS PLACED BEFORE US IN THE NAME OF THE ASSESSEE SOCIETY. HEN CE, WE FIND THAT THE FACTS OF THE PRESENT CASE AND THAT CASE ARE SIMILAR AND THEREFORE, RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER, WE SET ASIDE THE ORDER OF CIT (A) IN BOTH YEARS AND RESTORE THE MATTER BACK TO THE FILE OF AO IN BOTH YEARS FOR FRESH DECISION WITH SIMILAR DIRECTIONS AS WERE GIVE N BY TRIBUNAL AS PER PARA 13 REPRODUCED ABOVE. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR AT THE PRESENT STAGE ON THE VARIOUS GROUNDS RAISED BY THE REVENUE. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 31 ST DECEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.