Appeal Details
Counselvise Citation
[2017] 128 COUNSELVISE.COM (IT) 7511 (ITAT-PANAJI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
16-03-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
SMC
Assessment Year
2013-2014
Appeal Filed On
09-01-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI SINGLE MEMBER CASE BEFORE SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 12 /PAN/2017 (ASST. YEAR: 20 13 14 ) INCOME TAX OFFICER, WARD 1 , AYAKAR BHAVAN, ADI UDUPI, MALPE ROAD, UDUPI 576 103 V. M/S. SHRI LAKSHMI MULTIPURPOSE SOUHARDA SAHAKARI LTD., SHRI HARI TOWERS, KANAKADAS ROAD, UDUPI - 576 101 PAN NO. AAGAS 5042 M (APPELLANT) (RESPONDENT) ITA NO. 13 /PAN/2017 (ASST. YEAR: 2013 14) INCOME TAX OFFICER, WARD 1, AYAKAR BHAVAN, ADI UDUPI, MALPE ROAD, UDUPI 576 103 V. M/S. DAIWAJNA CREDIT CO - OPERATIVE SOCIETY LTD., SHRI HARI TOWERS, 1 ST FLOOR, KANAKADASA ROAD, UDUPI - 576101 PAN NO. AA DFD 9888 L (APPELLANT) (RESPONDENT) ITA NO. 20 /PAN/2017 (ASST. YEAR: 2013 14) INCOME TAX OFFICER, WARD 2 , AAYAKAR BHAVAN, ADI UDUPI, MALPE ROAD, UDUPI 576 103 V. M/S SHREERAMA CREDIT CO - OPERATIVE SOCIETY LTD., D.NO.45 - 14 IV, SHANKAR SHET TOWERS, KUNDAPURA, UDUPI PAN NO. AAAJS 1565 Q (APPELLANT) (RESPONDENT) 2 ITA NO S . 12 ,13,20,22,23 & 26 /P A N/201 7 M/S. SHRI LAKSHMI MULTIPURPOSE SOUHARDA SAHAKARI LTD. DAIWJANA CREDIT CO - OP SOCIETY LTD., SHREERAMA CREDIT CO - OP. SOCIETY LTD. GANGOLLI TOWN SOUHARDA CO - OP. LTD. KARAVALI CREDIT CO - OP. SOCIETY LTD. & JAGRITI URBAN CREDIT SOUHARD SAHAKARI NIYAMIT ITA NO. 22 /PAN/2017 (ASST. YEAR: 2013 14) INCOME TAX OFFICER, WARD 2, AAYAKAR BHAVAN, ADI UDUPI, MALPE ROAD, UDUPI 576 103 V. M/S. GANGOLLI TOWN SOUHARDA CO - OPERATIVE LTD., NO.552, MAIN ROAD, NEAR CAR STREET, GANGOLLI, KUNDAPURA, UDUPI PAN NO. AAA AG 2286 M (APPELLANT) (RESPONDENT) ITA NO. 23 /PAN/2017 (ASST. YEAR: 2013 14) INCOME TAX OFFICER, WARD 2, AAYAKAR BHAVAN, ADI UDUPI, MALPE ROAD, UDUPI 576 103 V. M/S. KARAVALI CREDIT CO - OPERATIVE SOCIETY LTD., SANTHEKATTE, UDUPI PAN NO. AAGFK 0822 Q (APPELLANT) (RESPONDENT) ITA NO. 26 /PAN/2017 (ASST. YEAR: 201 2 1 3 ) THE INCOME TAX OFFICER, WARD 1(4), FIRST FLOOR, F.K COMMERCIAL COMPLEX, DR.B.R. AMBEDKAR ROAD, OPP. CIVIL HOSPITAL BELAGAVI 590 001 V. M/S. JAGRUTI URBAN CREDIT SOUHARD SAHAKARI NIYAMIT, A/P: HARUGERI, TQ: RAIBAG DIST: BELAGAVI PAN NO. AA AJJ 0 083 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.G. AMMANGI - CA (ITA NO. 26 /PAN/2017) NONE (ITA NO. 12 ,13,20 ,22 & 23 /PAN/2017) DEPARTMENT BY : SHRI SHIVENDRA GUPTA LD.DR DATE OF HEARING : 1 6 /03/2017 DATE OF PRONOUNCEMENT : 1 6 /03/2017. 3 ITA NO S . 12 ,13,20,22,23 & 26 /P A N/201 7 M/S. SHRI LAKSHMI MULTIPURPOSE SOUHARDA SAHAKARI LTD. DAIWJANA CREDIT CO - OP SOCIETY LTD., SHREERAMA CREDIT CO - OP. SOCIETY LTD. GANGOLLI TOWN SOUHARDA CO - OP. LTD. KARAVALI CREDIT CO - OP. SOCIETY LTD. & JAGRITI URBAN CREDIT SOUHARD SAHAKARI NIYAMIT O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER TH E S E ARE THE APPEAL S FILED BY THE REVENUE AGAINST THE SEPARATE ORDER S PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) , MANGALORE IN ITA NO. 167/UDP/ CIT(A)MNG/2015 16 DATED 28 .10.2016, ITA NO.174/UDP/CIT(A)MNG/2015 16 DATED 31.10.2016, ITA NO.224 / UDP / CIT(A) MNG / 2015 16 DATED 28.10.2016, ITA NO.228 / UDP / CIT(A) MNG / 2015 16 DATED 31.10.2016, ITA NO.231/UDP/CIT(A) MNG/2015 16 DATED 31.10.2016 FOR THE ASSESSMENT YEAR S 2013 14 AND COMMISSIONER OF INCOME TAX (APPEALS), BELAGAVI IN ITA.NO.192/BGM/2014 - 15 DATED 08.11.2016 FOR THE ASSESSMENT YEAR 2012 - 13 RESPECTIVELY . 2. THE SOLE ISSUE INVOLVED IN TH E S E APPEAL S IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ALLOWING DEDUCTION TO THE ASSESSEE UNDER SEC. 80P(2)(A)(I) OF THE INCOME TAX ACT, 1961. 3 . THE FACTS OF THE CASE , IN BRIEF, ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME AFTER CLAIMING DEDUCTI ON UNDER SEC. 80P(2)(A)(I) OF THE ACT AT NIL . IT WAS CLAIMED THAT THE SOCIETY IS ENTITLED TO DEDUCTION UNDER SEC. 80P(2)(A)(I) AS IT WAS A COOPERATIVE SOCIETY CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. HOWEVER, THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SEC. 80P(2)(A)(I) WAS REJECTED BY THE ASSESSING OFFICER IN THE ORDER PASSED UNDER SEC. 143(3) OF THE ACT ON THE GROUND THAT THE ASSESSEE WAS A COOPERATIVE BANK, AND HENCE, NOT ENTITLED TO CLAIM DEDUCTION BY VIRTUE OF SEC. 80P(4). 4 ITA NO S . 12 ,13,20,22,23 & 26 /P A N/201 7 M/S. SHRI LAKSHMI MULTIPURPOSE SOUHARDA SAHAKARI LTD. DAIWJANA CREDIT CO - OP SOCIETY LTD., SHREERAMA CREDIT CO - OP. SOCIETY LTD. GANGOLLI TOWN SOUHARDA CO - OP. LTD. KARAVALI CREDIT CO - OP. SOCIETY LTD. & JAGRITI URBAN CREDIT SOUHARD SAHAKARI NIYAMIT 4. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) AL LOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: - 7. THE HONBLE JURISDICTIONAL HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS SHRI BILUR GURUBASAVA PATTIN SAHAKARI SANGH NIYAMIT, BAGALKOT - ITA NO.5006/2013 DTD:05/02/2014 AS CLEARLY DISCUSSED THE ISSUE AND HELD THAT: ....... THEREFORE, AS THE ASSESSEE IS NOT A CO - OPERATIVE BANK CARRYING ON EXCLUSIVELY BANKING BUSINESS AND AS IT DOES NOT POSSESS A LICENSE FROM RESERVE BANK OF INDIA T O 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 BUSINESS OF BANKING FOR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE OBJECT OF THE AFORESAID AMENDMENT IS NOT TO EXCLUDE THE BENEFIT EXTENDED UNDER SECTION 80P(1) TO SUCH SOCIETY .... IN THE SIMILAR CASE ON AN EXAMINATION OF THE RELEVANT LEGAL PROVISIONS, IT IS TO BE NOTICED AT THE OUTSET THAT THIS COURT IN THE APPEAL IN ITA 351/2011, CIT V. BANGALORE COMMERCIAL TRANSPORT CREDIT CO - OPERATIVE SOCIETY - LIMITED, DECIDED ON 27. 6.2014, HAD FRAMED THE FOLLOWING SUBSTANTIAL QUESTIONS OF LAW: (I) WHETHER THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE PR OVISION OF SUB - SECTION (4) OF SECTION 80P OF THE INCOME TAX ACT ARE APPLICABLE ONLY TO COOPERATIVE BA NKS AND NOT TO CREDIT C O - OPERATIVE SOCIETIES, WHICH ARE ENGAGED IN BUSINESS OF BANKING, INCLUDING PROVIDING CREDIT FACILITIES TO THEIR MEMBERS? (II) WHETHER THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND NOT A COOPERATIVE BANK IN TERMS OF SUB - SECTION (4) OF SECTION 80P OF THE INCOME TAX ACT WITHOUT CONSIDERING THE MEANING OF COOPERATIVE BANK AS ENVISAGED UNDER P ART V OF THE BANKING REGULATION ACT, 1949, WHEREIN IT IS DEFINED THAT CO - OPERATIVE 5 ITA NO S . 12 ,13,20,22,23 & 26 /P A N/201 7 M/S. SHRI LAKSHMI MULTIPURPOSE SOUHARDA SAHAKARI LTD. DAIWJANA CREDIT CO - OP SOCIETY LTD., SHREERAMA CREDIT CO - OP. SOCIETY LTD. GANGOLLI TOWN SOUHARDA CO - OP. LTD. KARAVALI CREDIT CO - OP. SOCIETY LTD. & JAGRITI URBAN CREDIT SOUHARD SAHAKARI NIYAMIT BANK INCLUDES PRIMARY COOPERATIVE BANK, WHICH IS FURTHER DEFINED AS COOPERATIVE SOCIETY WITH THE PRIMARY OBJECT OF TRANSACTIONS OF BANKING BUSINESS? THE SAID ISSUES WERE A NSWERED IN FAVOUR OF THE ASSESSEE. THE JURISDICTIONAL ITAT, FOLLOWING THE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT OF KARNATAKA ON SIMILAR FACTS AND IDENTICAL ISSUE, HAS BEEN CONSISTENTLY HOLDING THE VIEW THAT CO - OPERATIVE SOCIETY REGISTERED AS CO - OPERATIVE SOCIETY PROVIDING CREDIT FACILITY TO ITS MEMBERS AND NOT REGISTERED WITH THE RBI CANNOT BE DENIED THE DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE INCOME - TAX ACT. 9. THE FACT THAT THE APPELLANT IS A COOPERATIVE SOCIETY REGISTERED UNDER THE KARNA TAKA SOUHARDA SAHAKARI ACT, 1997 ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS HAS BEEN CLEARLY MENTIONED BY THE A.O IN THE AFORESAID ASSESSMENT ORDER. THE APPELLANT IN ITS SUBMISSIONS DATED 11/02/2016 AND THROUGH AN AFFIDAVIT DATED 11/02/2016 HAS CLEARLY STATED THAT THE APPELLANT IS A CO - OPERATIVE SOCIETY REGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 ENGAGED IN PROVIDING CREDIT FACILITIES ONLY TO ITS MEMBERS AND IT DOES NOT POSSESS ANY BANKING LICENCE FROM THE RBI. IT IS THEREFORE, CLE AR THAT THE APPELLANTS CASE IS SQUARELY COVERED BY THE AFORESAID DECISIONS OF THE JURISDICTIONAL HIGH COURT OF KARNATAKA AS FACTS ARE SIMILAR AND ISSUE INVOLVED IS IDENTICAL. IT APPEARS SLP FILED BY DEPARTMENT BEFORE HONBLE SUPREME COURT ON THE SIMILAR I SSUE IS PENDING. UNLESS THE DECISION OF THE JURISDICTIONAL HIGH COURT IS REVERSED BY THE HONBLE SUPREME COURT, THE POSITION OF THE LAW IS CLEAR THAT THE APPELLANTS CASE IS NOT COVERED BY SECTION 80P(4) AS IT IS NOT A CO - OPERATIVE BANK AND IT IS ENTITLE D TO THE DEDUCTION U/S 80P(2)(A)(I). HENCE, THE APPEAL FILED BY THE APPELLANT IS ALLOWED. THE APPELLANT GETS THE RELIEF OF RS.76,04,883/ - UNDER SECTION 80P(2)(A)(I) OF THE INCOME - TAX ACT. 6 ITA NO S . 12 ,13,20,22,23 & 26 /P A N/201 7 M/S. SHRI LAKSHMI MULTIPURPOSE SOUHARDA SAHAKARI LTD. DAIWJANA CREDIT CO - OP SOCIETY LTD., SHREERAMA CREDIT CO - OP. SOCIETY LTD. GANGOLLI TOWN SOUHARDA CO - OP. LTD. KARAVALI CREDIT CO - OP. SOCIETY LTD. & JAGRITI URBAN CREDIT SOUHARD SAHAKARI NIYAMIT 5. THE DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER S OF THE ASSESSING OFFICER. HE COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ABOVE QUOTED ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ALLOWED THE CLAIM OF DEDUCTION UNDER SEC. 80P(2)(A)(I) OF THE ACT AF TER FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SHRI BILULRU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMIT, BAGALKOT IN ITA NO. 5006/2013 DATED 05/02/2014 . NO CONTRARY DECISION COULD BE CITED BY THE DEPARTMENTAL REP RESENTATIVE. I THEREFORE, DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS), W HICH ARE HEREBY CONFIRMED AND THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEALS FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON THURSDA Y , THE 1 6 TH DAY OF MARCH, 2017 AT GOA . SD/ - (GEORGE MATHAN) JUDICIAL MEMBER DATED : 1 6 TH MARCH, 2017. VSSGB/ - COPY TO: 1 . THE ASSESSEE ( I ) M/S. SHRI LAKSHMI MULTIPURPOSE SOUHARDA SAHAKARI LTD. ( II ) M/S. DAIWAJNA CREDIT CO - OPERATIVE SOCIETY LTD. ( III ) M/S SHREERAMA CREDIT CO - OPERATIVE SOCIETY LTD. 7 ITA NO S . 12 ,13,20,22,23 & 26 /P A N/201 7 M/S. SHRI LAKSHMI MULTIPURPOSE SOUHARDA SAHAKARI LTD. DAIWJANA CREDIT CO - OP SOCIETY LTD., SHREERAMA CREDIT CO - OP. SOCIETY LTD. GANGOLLI TOWN SOUHARDA CO - OP. LTD. KARAVALI CREDIT CO - OP. SOCIETY LTD. & JAGRITI URBAN CREDIT SOUHARD SAHAKARI NIYAMIT ( IV ) M/S. GANGOLLI TOWN SOUHARDA CO - OPERATIVE LTD., ( V ) M/S. KARAVALI CREDIT CO - OPERATIVE SOCIETY LTD. ( VI ) M/S. JAGRUTI URBAN CREDIT SOUHARD SAHAKARI NIYAMIT 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A), 5 . THE D.R. 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI
