Income Tax Officer Ward - 5 (2) (3), Bengaluru V. M/S BBR & RD KPTCL Employees Credit Co-Operative Society Ltd. , Bengaluru

ITA 2066/BANG/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2176 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 19-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SRINANDINI DAS
• Assessee Lawyers: GOVIND G M
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 2066 /BANG/201 8 ASSESSMENT YEAR : 20 1 4 - 1 5 THE INCOME TAX OFFICER, WARD 5 (2) (3), BANGALORE. VS. M/S. BBR & RD KPTCL EMPLOYEES CREDIT CO- OPERATIVE SOCIETY LTD., ITC COMPOUND, NO. 1, ANAND RAO CIRCLE, BANGALORE 560 009. PAN: AACAB4773G APPELLANT RESPONDENT APPELLANT BY : SMT. SRINANDINI DAS, ADDL. CIT (DR) RESPONDENT BY : SHRI GOVIND G.M . , CA DATE OF HEARING : 14 . 11 .2018 DATE OF PRONOUNCEMENT : 16 . 11 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-10, BANGALORE DATED 09.03.2018 FOR ASSESSMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT(A) IS OPPOSED TO LA W AND FACTS OF THE CASE 2. WHETHER ON FACTS, AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) IN HOLDING THE ASSESSEE SOCIETY IS NOT A COOPERATIVE BANK IGNORING THE FACT THAT THE NATURE OF ITS BUSIN ESS AND FUNCTIONING HAS ALL THE TRAPPINGS AND ATTRIBUTES OF A BANK ? 3. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) WAS RIGHT IN HOLDING THAT THE ASSESSEE S OCIETY IS NOT A COOPERATIVE BANK IGNORING THE FACT OF INSERTION OF CLAUSE (VIIA) IN SECTION 2(24) OF THE INCOME TAX ACT, 1961 BY THE FI NANCE ACT,2016 ? 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) WAS RIGHT IN HOLDING THAT THE ASSES SEE IS ELIGIBLE FOR DEDUCTION U/S 80P (2) IGNORING THE FACT THAT WI TH EFFECT FROM ITA NO. 2066/BANG/2018 PAGE 2 OF 4 01.04.2007, SUB-SECTION (4) OF SECTION 80P PROVIDES THAT THE PROVISIONS OF SECTION 80P SHALL NOT APPLY IN RELATI ON TO ANY COOPERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CR EDIT SOCIETY OR PRIMARY AGRICULTURAL RURAL DEVELOPMENT BANK? 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) WAS RIGHT IN HOLDING THAT THE ASSES SEE IS NOT A COOPERATIVE BANK WHEN IT HAS BEEN CLEARLY DEFINED I N THE KARNATAKA CO-OPERATIVE SOCIETY ACT,1959 THAT ANY CO -OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING IS TERME D AS COOPERATIVE BANK ? 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED UP ON AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF CIT(A) I N SO FAR AS IT RELATES TO THE ABOVE GROUNDS, MAY BE REVERSED AND T HAT OF THE ASSESSING OFFICER MAY BE RESTORED. 7. THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR DE LETE ANY OF THE GROUNDS MENTIONED ABOVE AND / OR ADD ANY NEW GROUND S ON OR BEFORE THE HEARING. 3. THE LD. DR OF REVENUE SUPPORTED THE ASSESSMENT O RDER. SHE DRAWN OUR ATTENTION TO PARA NO. 7 ON PAGE NO. 9 OF THE ASSESS MENT ORDER AND POINTED OUT THAT THE AO HAS FOLLOWED THE JUDGEMENT OF HONB LE APEX COURT RENDERED IN THE CASE OF THE TOTGARS COOPERATIVE SALE SOCIETY LIMITED VS. ITO IN APPEAL NO. 1622 OF 2010 DATED 08.02.2010 LATER REPO RTED IN 322 ITR 283. SHE SUBMITTED THAT IN VIEW OF THIS, THE ORDER OF CI T(A) SHOULD BE REVERSED AND THAT OF AO SHOULD BE RESTORED. AS AGAINST THIS , THE LD. AR OF ASSESSEE SUPPORTED THE ORDER OF CIT(A) AND HE ALSO PLACED RE LIANCE ON THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CAS E OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO AS REPORTE D IN 230 TAXMAN 309. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA) IS IN FAVOUR OF THE ASSESSEE WHEREAS THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGA RS CO-OPERATIVE SALE SOCIETY LTD. AS REPORTED IN 395 ITR 611 (KARN) AND THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE TOTGARS COOP ERATIVE SALE SOCIETY LIMITED VS. ITO (SUPRA) ARE AGAINST THE ASSESSEE BU T WE FIND THAT THERE IS NO CONTRADICTION IN THESE TWO JUDGEMENTS WHICH ARE IN FAVOUR OF THE REVENUE AND IN THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COUR T RENDERED IN THE CASE ITA NO. 2066/BANG/2018 PAGE 3 OF 4 OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD . VS. ITO (SUPRA) WHICH IS IN FAVOUR OF THE ASSESSEE BUT THE DECISION ARE DIFFERENT BECAUSE THE FACTS ARE DIFFERENT. IN THE CASE OF TUMKUR MERCHAN TS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA), IT WAS FOUND THAT THE INVESTMENT OR DEPOSIT IN BANK WAS OUT OF ASSESSEES OWN FUNDS AND NOT OUT OF LIABILITY OF THE ASSESSEE WHEREAS IN THE CASE OF PCIT AND ANOTHER VS . TOTAGARS CO- OPERATIVE SALE SOCIETY LTD. (SUPRA), IT WAS FOUND T HAT THE DEPOSIT IN BANK WAS OUT OF ASSESSEES LIABILITY AND NOT OUT OF ASSE SSEES OWN FUNDS. IN THE PRESENT CASE, THERE IS NO DISCUSSION IN THE ORDERS OF THE LOWER AUTHORITIES ON THIS FACTUAL ASPECT AS TO WHETHER THE DEPOSIT IN BA NK WAS OUT OF ASSESSEES OWN FUNDS OR OUT OF LIABILITY AND THEREFORE, WE FEE L IT PROPER TO SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF AO FOR FRESH DECISION AFTER EXAMINING THE FACTS OF PRESENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA) AND IN THE CASE OF PCIT AND ANOTHER VS.TOTAGARS CO-OPERATIVE S ALE SOCIETY LTD. (SUPRA) AND ALSO THE JUDGMENT OF HONBLE APEX COUR T RENDERED IN THE CASE OF THE TOTGARS COOPERATIVE SALE SOCIETY LIMITED VS. ITO (SUPRA) AND THEN DECIDE THE ISSUE AFRESH AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AO SHOULD ALSO EX AMINE THE APPLICABILITY OF THE JUDGMENT OF HONBLE APEX COURT RENDERED IN T HE CASE OF CITIZEN CO OPERATIVE SOCIETY LIMITED VS. ACIT, 397 ITR 1 BECAU SE THIS JUDGMENT IS RELEVANT FOR DECIDING THIS ISSUE AS TO WHETHER THE PRESENT ASSESSEE IS A CO OPERATIVE BANK OR NOT. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S 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 16 TH NOVEMBER, 2018. /MS/ ITA NO. 2066/BANG/2018 PAGE 4 OF 4 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.