ITO 20(3)(4), MUMBAI V. TATA MEMORIAL CENTRAL EMPLOYEES CO-OP. CREDIT SOCIETY, MUMBAI

ITA 2073/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6757 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 04-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure; Co-operative Credit Society; Set aside
• Section: 143(3); 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER I.T.A. NO.2073/MUM/2018 (ASSESSMENT YEAR: 2013-14) ITO 20(3)(4) ROOM NO. 616, 6 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400012 VS. M/S. TATA MEMORIAL CENTRAL EMPLOYEES CO-OP CREDIT SOCIETY, GROUND FLOOR, TATA MEMORIAL CENTRAL, ANNEX BUILDING, DR. E. BORGES ROAD, JERBAI WADIA ROAD, PAREL, MUMBAI-400012 PAN : AAAAT7660A ( APPELLANT ) .. ( RESPONDENT ) REVENUE BY : SHRI MANOJ KUMAR SINGH (CIT-DR) ASSESSEE BY: SHRI. PRAKASH JHUNJHUNWALA (AR) DATE OF HEARING : 03.07.2019 DATE OF PRONOUNCEMENT : 03.07.2019 O R D E R PER PAWAN SINGH, JUDICIAL MEMBER 1. THIS APPEAL, FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-32, MUMBAI (HE REINAFTER CALLED THE CIT(A)), FOR ASSESSMENT YEAR 2013-14. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80P TO THE ASSE SSEE EVEN THOUGH I.T.A. NO.2073/MUM/2018 2073 MUM 2018-M/S. TATA MEMORIAL CENTRAL E MPLOYEES CO-OP CREDIT SOCIETY 2 ASSESSEE CARRIES ON THE BANKING BUSINESS AND OTHER BUSINESS IN THE NAME OF A CO-OPERATIVE CREDIT SOCIETY? 2. ' ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80P(2)(A)(I) WI THOUT CONSIDERING INSERTED SECTION 80P(4) AND SUB-CLAUSE (VIIA) TO SE CTION 2(24) VIDE FINANCE ACT, 2006 W.E.F. 01.04.2007? 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THE DECISION OF THE SU PREME COURT IN THE CASE OF M/S TOTGAR CO-OP SALES SOCIETY LTD. (322 ITR 285) W HEREIN INTEREST RECEIVED BY A CO-OPERATIVE SOCIETY FROM INVESTMENT OF SURPLU S FUNDS IS ASSESSABLE AS 'INCOME FROM OTHER SOURCES' AND THUS NOT ELIGIBLE F OR DEDUCTION U/S 80P OF THE IT ACT, 1961 .' 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2013-14 ON 25-09-2013 DECLARING TOTAL INCOME AT RS. NIL AFTER CLAIMING DEDUCTION U/S. 80P OF T HE ACT OF RS. 87,08,345/- CLAIMING IT TO BE A CO-OPERATIVE CREDIT SOCIETY AND NOT A CO-OPERATIVE BANK AND THE PROVISION OF SECTION 80P( 4) WILL HAVE NO APPLICATION AND IS ENTITLED TO DEDUCTION UNDER SECT ION 80P(2)(A)(I) OF RS. 59,56,93,111/- AND SECTION 80P(2)(D) OF RS. 30, 15,243/-. THE ASSESSING OFFICER DISALLOWED THE DEDUCTION. HOWEVER , ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSESSING OFFI CER WAS REVERSED. THE LD. CIT(A) REVERSED THE ACTION OF ASSESSING OFF ICER BY FOLLOWING THE ORDER OF HIS PREDECESSOR FOR ASSESSME NT YEAR 2012-13 DATED 11.03.2016. HENCE, AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE SUBMISSION OF LD. DR FOR THE REVE NUE AND LD. AR OF THE ASSESSEE. AT THE OUTSET OF HEARING, THE LD. DR FOR THE REVENUE I.T.A. NO.2073/MUM/2018 2073 MUM 2018-M/S. TATA MEMORIAL CENTRAL E MPLOYEES CO-OP CREDIT SOCIETY 3 SUBMITS THAT ON IDENTICAL GROUNDS, THE APPEAL FOR A SSESSMENT YEAR 2012-13 VIDE ITA NO. 862/MUM/2017 DATED 31.07.2018, HAS BEEN RESTORED TO THE FILE OF ASSESSING OFFICER. THE LD. DR FURTHER SUBMITS THAT THE LD. CIT(A) GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING THE DECISION OF HIS PREDECESSOR IN ASSESSMENT YEAR 2012 -13. THEREFORE, THE APPEAL FOR THE YEAR UNDER CONSIDERATION MAY ALS O BE RESTORED TO THE FILE OF ASSESSING OFFICER. 4. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE SUBMI TS THAT FOR THE PURPOSE OF SECTION 80P(2) A CO-OPERATIVE BANK SHOUL D BE CONSIDERED AS A CO-OPERATIVE SOCIETY AS HELD BY HONBLE KARNAT AKA HIGH COURT IN PCIT VS. TATAGARS CO-OPERATIVE SALE SOCIETY [391 ITR 74], HONBLE PUNJAB & HARYANA HIGH COURT IN CIT VS. HARY ANA STATE CO- OPERATIVE SOCIETY [234 ITR 714 P&H), HONBLE BOMBAY HIGH COURT IN PCIT VS. GOA PWD STAFF CO-OP. SOCIETY LTD. [2016 ] 242 TAXMAN 422 (BOM). THE LD. AR FOR THE ASSESSEE FURTHER SUBM ITS THAT TRIBUNAL WHILE DECIDING THE APPEAL OF REVENUE FOR ASSESSMENT YEAR 2012-13 HAS HELD THAT ASSESSEE IS A CREDIT CO-OPERATIVE SOC IETY. THE LD. AR FURTHER SUBMITS THAT THE DECISION OF HONBLE SUPREM E COURT IN CITIZEN CO-OPERATIVE SOCIETY VS. ACIT 397 ITR 9SC) IS DISTINGUISHABLE ON THE FACTS OF PRESENT CASE. THE A SSESSEE IN THAT CASE WAS CARRYING ON BANKING BUSINESS FOR PUBLIC AT LARG E. HOWEVER, THE ASSESSEE IN THE PRESENT CASE IS NOT EXTENDING SUCH FACILITY TO PUBLIC AT I.T.A. NO.2073/MUM/2018 2073 MUM 2018-M/S. TATA MEMORIAL CENTRAL E MPLOYEES CO-OP CREDIT SOCIETY 4 LARGE AND THE SERVICES OF SOCIETY ARE AVAILABLE TO THE MEMBERS AND NOMINAL MEMBERS OF THE SOCIETY. THE LD. AR FURTHER PLACED RELEVANT PART OF AUDITED ANNUAL REPORT ABOUT THE STATUS OF M EMBERS AND NOMINAL MEMBERS. THE LD. AR FURTHER SUBMITS THAT CO -OPERATIVE BANKS ARE PRIMARILY A CO-OPERATIVE SOCIETY AS HELD BY VARIOUS HIGH COURTS REFERRED ABOVE, THEREFORE, THE ASSESSEE IS E NTITLED FOR DEDUCTION AND THAT RESTORING THE MATTER TO THE FILE OF ASSESSING OFFICER FOR VERIFICATION OF RIGHTS, ROLES, ENTITLEM ENT, DUTIES AND RESPONSIBILITIES OF NOMINAL MEMBER WOULD BE A FUTIL E EXERCISE. 5. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND VARIOUS CASE LAWS RELIED BY LOWER AUTHORITIES AND BY LD. REPRESENTATIVE OF T HE PARTIES. WE HAVE SEEN THAT ON THE IDENTICAL FACTS AND ON IDENTICAL G ROUNDS OF APPEAL, THE CO-ORDINATE BENCH OF TRIBUNAL HAS RESTORED THE MATTER TO THE FILE OF ASSESSING OFFICER VIDE ORDER DATED 31.07.2018 IN ITA NO. 862/MUM/2017 BY PASSING THE FOLLOWING ORDER: 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSE D THE MATERIAL ON RECORD INCLUDING CASE LAWS RELIED UPON . WE HAVE OBSERVED THAT THE ASSESSEE HAS CLAIMED ITSELF TO BE A EMPLOYEES CREDIT CO-OPERATIVE SOCIETY WHICH IS RECEIVING DEPO SITS AND LENDING MONEY TO ITS MEMBERS EXCLUSIVELY . A CLAIM HAS BEEN MADE BY THE ASSESSEE SOCIETY THAT ONLY PAST AND PRE SENT EMPLOYEES OF TATA MEMORIAL CENTRAL CAN BECOME MEMBE RS OF THE SOCIETY AND THE DEALINGS OF THE ASSESSEE IS RESTRIC TED TO THESE MEMBERS ONLY . THUS, THE ASSESSEE SOCIETY HAS CATEG ORICALLY MADE I.T.A. NO.2073/MUM/2018 2073 MUM 2018-M/S. TATA MEMORIAL CENTRAL E MPLOYEES CO-OP CREDIT SOCIETY 5 STATEMENTS THAT IT DEALS EXCLUSIVELY WITH ITS MEMBE RS WHO ARE EMPLOYEES( BOTH PAST AND PRESENT) OF TATA MEMORIAL CENTRE AND THE ASSESSEE DOES NOT DEAL WITH PUBLIC AT LARGE. TH E ASSESSEE CLAIMED DEDUCTION FROM PROFITS AND GAINS FROM ITS A BOVE ACTIVITIES WITHIN PROVISIONS OF 80P(2)(A)(I) OF THE 1961 ACT. THE ASSESSEE SOCIETY IS REGISTERED UNDER MAHARASHTRA CO-OPERATIV E SOCIETY ACT, 1961. THE ASSESSEE UNDISPUTEDLY IS NOT ACTING AS CL EARING AGENT FOR CHEQUES, DDS, PAY ORDERS ETC . THE ASSESSEE DID NOT HOLD BANKING LICENSE ISSUED BY RESERVE BANK OF INDIA. W HILE ON THE OTHER HAND THE LEARNED AO IS OF THE VIEW THAT KEEPI NG IN VIEW PROVISIONS OF SECTION 80P(4) R.W.S. 2(24)(VIIA) OF THE 1961 ACT AND ALSO PROVISIONS OF SECTION 56(C)(CCV) OF PART V OF BANKING REGULATION ACT, 1949, THE ASSESSEE IS A PRIMARY CO- OPERATIVE BANK AND IS NOT ELIGIBLE FOR DEDUCTION AS ARE CONTA INED IN PROVISIONS OF SECTION 80P OF THE 1961 ACT. THE LEAR NED CIT(A) HELD IN FAVOUR OF THE ASSESSEE HOLDING THAT IT IS ENTITL ED FOR DEDUCTION U/S 80P OF THE 1961 ACT AS IT IS NOT ENGAGED IN THE BUSINESS OF BANKING AS THERE IS NO EVIDENCE/FACTS BROUGHT ON RE CORD BY THE AO TO PROVE THAT THE ASSESSEE IS ENGAGED IN BANKING ACTIVITIES DISENTITLING IT TO DEDUCTIONS U/S. 80P OF THE 1961 ACT. WE HAVE CAREFULLY GONE THROUGH MATERIAL ON RECORD INCLUDIN G TRANSLATED VERSION OF EXTRACTS OF PART BYE LAWS, FINANCIAL S TATEMENTS WHICH ARE PLACED ON RECORD BY THE ASSESSEE. WE HAVE ALSO CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE AO HAS EXTRACTED RELEVANT PROVISIONS UNDER 1961 ACT AS WELL BANKING REGULATIONS ACT, 1949 TO HOLD THAT THE ASSESSEE IS A CO-OPERATI VE BANK BUT HAS NOT ELABORATED REASONING AND BASIS FOR ARRIVING AT THE SAID DECISION PREJUDICING THE ASSESSEE AS NO INCRIMINATI NG MATERIAL/FINDINGS ARE BROUGHT ON RECORD BY THE AO T O EVIDENCE THAT THE ASSESSEE IS ENGAGED IN BANKING BUSINESS AN D/OR MUTUALITY IS BREACHED ON GROUNDS THAT COMPLETE IDEN TITY BETWEEN CONTRIBUTOR AND PARTICIPANT IS NOT ESTABLISHED. IN THE ABSENCE OF INCRIMINATING EVIDENCES ON RECORD AND REASONED ORDE RS, WE ARE AFRAID WE CANNOT UPHELD THE CONTENTIONS OF THE AO P ER-SE ON CONJECTURES, SURMISES AND ASSUMPTIONS THAT THE ASSE SSEE IS ENGAGED IN BANKING BUSINESS NOTWITHSTANDING THE CLA IM OF THE I.T.A. NO.2073/MUM/2018 2073 MUM 2018-M/S. TATA MEMORIAL CENTRAL E MPLOYEES CO-OP CREDIT SOCIETY 6 ASSESSEE THAT IT IS DEALING EXCLUSIVELY WITH ITS ME MBERS WHO ARE PAST AND PRESENT EMPLOYEES OF TATA MEMORIAL CENTRE AND THAT THERE IS NO DEALING WITH MEMBERS OF PUBLIC WHICH IS EVIDENT FROM CLAUSE D.1.1. OF BYE LAWS WHICH IS PLACED ON RECORD . THE SAID CLAUSE IN ITS TRANSLATED VERSION AS PRODUCED BY THE ASSESSEE, READS AS UNDER: D.1.1 *** 1. ANY EMPLOYEE WHO SHOULD BE PERMANENT EMPLOYEE OF TA TA MEMORIAL CENTRE. AS WELL AS THOSE EMPLOYEE WHOS DE DUCTION IS GOING ON HIS PROVIDENT FUND. *** *** NO EVIDENCE IS BROUGHT ON RECORD BY THE AO THAT THE ASSESSEE IS DEALING WITH PUBLIC AT LARGE OR WITH NON MEMBERS. I T IS ALSO NOT BROUGHT ON RECORD THAT THE ASSESSEE HAS INDULGED IN BANKING BUSINESS . IT IS ALSO NOT BROUGHT ON RECORD BY THE AO THAT THERE IS A BREACH OF MUTUALITY ON THE GROUNDS OF LOSS OF I DENTITY BETWEEN CONTRIBUTORS AND PARTICIPANT. WE HAVE ALSO GONE THR OUGH THE AUDITED FINANCIAL STATEMENTS PLACED ON RECORD WHICH DOES NOT EVIDENCE ANY EVIDENTIARY INCRIMINATING MATERIAL/INF ORMATION WHICH COULD PROVE THE FINDINGS OF THE AO SO FAR THA T THE ASSESSEE IS HIT BY PROVISIONS OF SECTION 80P(4) OF THE 1961 ACT. THE ASSESSEE NO DOUBT IS ACCEPTING DEPOSITS OF VARIOUS KINDS FROM ITS MEMBERS AND ALSO EXTENDING THE LOANS AND ADVANCES OF VARIOUS KINDS TO ITS MEMBERS BUT IT IS NOT SUFFICIENT TO HO LD THAT THE ASSESSEE IS ENGAGED IN BANKING BUSINESS . UNDISPU TEDLY THE ASSESSEE IS A CREDIT CO-OPERATIVE SOCIETY BUT THIS FINDING IS NOT SUFFICIENT TO CATEGORISE SAID SOCIETY AS BANKING IN STITUTIONS TO DENY BENEFIT OF DEDUCTION U/S 80P KEEPING IN VIEW P ROVISIONS OF SECTION 80P(4) OF THE 1961 ACT UNLESS SUFFICIENT IN CRIMINATING EVIDENCES WERE BROUGHT ON RECORD BY THE AO TO DEMOL ISH THE CLAIMS OF THE ASSESSEE. THE AO HIMSELF IN THE PRECE DING ASSESSMENT YEAR 2010-11 VIDE ASSESSMENT ORDER DATED 21.08.2012 PASSED U/S 143(3) OF THE 1961 ACT HAS AL LOWED DEDUCTION U/S 80P OF THE 1961 ACT. THE LEARNED CIT( A) HAS PASSED WELL REASONED DETAILED ORDER REVERSING THE D ECISION OF THE I.T.A. NO.2073/MUM/2018 2073 MUM 2018-M/S. TATA MEMORIAL CENTRAL E MPLOYEES CO-OP CREDIT SOCIETY 7 AO, WITH WHICH WE CONCUR. THERE ARE SEVERAL JUDICIA L DECISIONS CITED BY LEARNED AR TO SUPPORT ITS CONTENTIONS WHIC H ARE DETAILED ABOVE AND NOT REPEATED . SO FAR SO GOOD. WE HAVE AT THE SAME TIME OBSERVED THAT HONBLE SUPREME COURT IN A RECEN T LANDMARK JUDGMENT IN THE CASE OF THE CITIZEN CO-OPERATIVE SO CIETY LIMITED(SUPRA) HAS DISCUSSED THE ISSUE THREADBARE AND HELD THAT NO DEDUCTION U/S 80P CAN BE ALLOWED WHERE THE TAX-P AYER SOCIETY ARE DEALING WITH NOMINAL MEMBERS WHO ARE JUST GIVIN G DEPOSITS FOR THE PURPOSES FOR OBTAINING LOANS AND ARE IN FAC T NOT MEMBERS IN REAL SENSE . THESE NOMINAL MEMBERS ARE GIVING DE POSITS TO MAXIMISE RETURNS AND THESE DEPOSITS ARE USED BY THE SAID SOCIETY TO ADVANCE LOANS TO THE MEMBERS OF THE FIRST CATEGO RY OF MEMBERS WHO ARE REAL MEMBERS AND THUS DEPOSITORS AND BORROW ERS ARE QUITE DISTINCT AND AS SUCH THE TAX PAYER IN THAT CA SE WAS MERELY AN FINANCE COMPANY NOT ELIGIBLE FOR DEDUCTION U/S 8 0P , AS ALSO PRINCIPLES OF MUTUALITY WAS BROKEN BECAUSE COMPLETE IDENTITY BETWEEN THE CONTRIBUTORS AND PARTICIPANTS WAS LOST LEADING TO BREACH OF PRINCIPLES OF MUTUALITY DISENTITLING THE TAXPAYER IN THAT CASE FROM DEDUCTION U/S 80P. THE FINDING OF HONBLE SUPREME COURT AT PARA 25 TO 28 ARE RE-PRODUCED HERE UNDER:- 25) SO FAR SO GOOD. HOWEVER, IT IS SIGNIFICANT TO P OINT OUT THAT THE MAIN REASON FOR DISENTITLING THE APPELLANT FROM GETTING THE DEDUCTION PROVIDED UNDER SECTION 80P OF THE ACT IS NOT SUB-SECTION (4) THEREOF. WHAT HAS BEEN NOTICED BY THE ASSESSING OFFICER, AFTER DISCUSSING IN DETAIL THE ACTIVITIES OF THE APPELLANT, IS THAT THE ACTIVITIES OF THE APPELL ANT ARE IN VIOLATIONS OF THE PROVISIONS OF THE MACSA UNDER WHICH IT IS FORMED. I T IS POINTED OUT BY THE ASSESSING OFFICER THAT THE ASSESSEE IS CATERING TO TWO DISTINCT CATEGORIES OF PEOPLE. THE FIRST CATEGORY IS THAT OF RESIDENT MEMB ERS OR ORDINARY MEMBERS. THERE MAY NOT BE ANY DIFFICULTY AS FAR AS THIS CATE GORY IS CONCERNED. HOWEVER, THE ASSESSEE HAD CARVED OUT ANOTHER CATEGO RY OF NOMINAL MEMBERS. THESE ARE THOSE MEMBERS WHO ARE MAKING DE POSITS WITH THE ASSESSEE FOR THE PURPOSE OF OBTAINING LOANS, ETC. A ND, IN FACT, THEY ARE NOT MEMBERS IN REAL SENSE. MOST OF THE BUSINESS OF THE APPELLANT WAS WITH THIS SECOND CATEGORY OF PERSONS WHO HAVE BEEN GIVING DEP OSITS WHICH ARE KEPT IN FIXED DEPOSITS WITH A MOTIVE TO EARN MAXIMUM RETURN S. A PORTION OF THESE DEPOSITS IS UTILIZED TO ADVANCE GOLD LOANS, ETC. TO THE MEMBERS OF THE FIRST CATEGORY. IT IS FOUND, AS A MATTER OF FACT, THAT TH E DEPOSITORS AND BORROWERS ARE QUIET DISTINCT. IN REALITY, SUCH ACTIVITY OF TH E APPELLANT IS THAT OF FINANCE BUSINESS AND CANNOT BE TERMED AS CO-OPERATIVE SOCIE TY. IT IS ALSO FOUND THAT THE APPELLANT IS ENGAGED IN THE ACTIVITY OF GRANTIN G LOANS TO GENERAL PUBLIC AS WELL. ALL THIS IS DONE WITHOUT ANY APPROVAL FROM THE REGISTRAR OF THE SOCIETIES. WITH INDULGENCE IN SUCH KIND OF ACTIVITY BY THE APPELLANT, IT IS REMARKED BY THE ASSESSING OFFICER THAT THE ACTIVITY OF THE APPELLANT IS IN I.T.A. NO.2073/MUM/2018 2073 MUM 2018-M/S. TATA MEMORIAL CENTRAL E MPLOYEES CO-OP CREDIT SOCIETY 8 VIOLATION OF THE CO-OPERATIVE SOCIETIES ACT. MOREOV ER, IT IS A CO-OPERATIVE CREDIT SOCIETY WHICH IS NOT ENTITLED TO DEDUCTION U NDER SECTION 80P(2)(A)(I) OF THE ACT. 26) IT IS IN THIS BACKGROUND, A SPECIFIC FINDING I S ALSO RENDERED THAT THE PRINCIPLE OF MUTUALITY IS MISSING IN THE INSTANT CA SE. THOUGH THERE IS A DETAILED DISCUSSION IN THIS BEHALF IN THE ORDER OF THE ASSESSING OFFICER, OUR PURPOSE WOULD BE SERVED BY TAKING NOTE OF THE FOLLO WING PORTION OF THE DISCUSSION: AS VARIOUS COURTS HAVE OBSERVED THAT THE FOLLOWIN G THREE CONDITIONS MUST EXIST BEFORE AN ACTIVITY COULD BE BROUGHT UNDER THE CONCEPT OF MUTUALITY; THAT NO PERSON CAN EARN FROM HIM; THAT THERE A PROFIT MOTIVATION; AND THAT THERE IS NO SHARING OF PROFIT. IT IS NOTICED THAT THE FUND INVESTED WITH BANK WHI CH ARE NOT MEMBER OF ASSOCIATION WELFARE FUND, AND THE INTEREST HAS BEEN EARNED ON SUCH INVESTMENT FOR EXAMPLE, ING MUTUAL FUND [AS SAID BY THE MD VIDE HIS STATEMENT DATED 20.12.2010]. [THOUGH THE BANK FORME D THE THIRD PARTY VIS- A-VIS THE ASSESSEE ENTITLED BETWEEN CONTRIBUTOR AND RECIPIENT IS LOST IN SUCH CASE. THE OTHER INGREDIENTS OF MUTUALITY ARE ALSO F OUND TO BE MISSING AS DISCUSSED IN FURTHER PARAGRAPHS]. IN THE PRESENT CASE BOTH THE PARTIES TO THE TRANSA CTION ARE THE CONTRIBUTORS TOWARDS SURPLUS, HOWEVER, THERE ARE NO PARTICIPATOR S IN THE SURPLUSES. THERE IS NO COMMON CONSENT OF WHATSOEVER FOR PARTICIPATOR S AS THEIR IDENTITY IS NOT ESTABLISHED. HENCE, THE ASSESSEE FAILS TO SATISFY T HE TEST OF MUTUALITY AT THE TIME OF MAKING THE PAYMENTS THE NUMBER IN REFERRED AS MEMBERS MAY NOT BE THE MEMBER OF THE SOCIETY AS SUCH THE AOP BODY B Y THE SOCIETY IS NOT COVERED BY CONCEPT OF MUTUALITY AT ALL. 27) THESE ARE THE FINDINGS OF FACT WHICH HAVE REMA INED UNSHAKEN TILL THE STAGE OF THE HIGH COURT. ONCE WE KEEP THE AFORESAID ASPECTS IN MIND, THE CONCLUSION IS OBVIOUS, NAMELY, THE APPELLANT CANNOT BE TREATED AS A CO- OPERATIVE SOCIETY MEANT ONLY FOR ITS MEMBERS AND PR OVIDING CREDIT FACILITIES TO ITS MEMBERS. WE ARE AFRAID SUCH A SOCIETY CANNOT CLAIM THE BENEFIT OF SECTION 80P OF THE ACT. 28) THIS APPEAL, THEREFORE, FAILS AND IS HEREBY D ISMISSED WITH COSTS. IN THE INSTANT CASE BEFORE US BASED ON PERUSAL OF B YE LAWS FILED BEFORE THE TRIBUNAL, IT IS OBSERVED THAT THE ASSES SEE SOCIETY HAS CARVED OUT TWO CLASSES OF MEMBERS NAMELY ACTIVE MEMBERS AND NOMINAL MEMBERS . THE ACTIVE MEMBERS AS PER BYE L AWS ARE THOSE WHO HAVE ATTENDED GENERAL MEETING OF THE SOCI ETY ONCE IN LAST FIVE YEARS AND THEY HAVE GIVEN DEPOSITS TO ASS ESSEE SOCIETY OR AVAILED LOAN FROM ASSESSEE SOCIETY ATLEAST ONCE IN FIVE YEAR BUT I.T.A. NO.2073/MUM/2018 2073 MUM 2018-M/S. TATA MEMORIAL CENTRAL E MPLOYEES CO-OP CREDIT SOCIETY 9 THERE IS ANOTHER CLASS NAMELY NOMINAL MEMBERS ARE THOSE SOCIETY MEMBERS WHO AS PER BYE LAWS ARE GIVEN MEMBE RSHIP AFTER RETIREMENT. THESE MEMBERS DO NOT AVAIL LOAN NOR GIV E DEPOSITS. WHILE AS PER AUDITED FINANCIAL STATEMENTS WHICH ARE PLACED ON RECORD, THESE NOMINAL MEMBERS ARE ALLOWED TO KEEP T HEIR POST RETIREMENT BENEFITS SAVINGS WITH THE ASSESSEE SOCIE TY. THESE NOMINAL MEMBERS ARE NOT ALLOWED TO BORROW FROM ASSE SSEE SOCIETY BASED ON MATERIAL ON RECORD WHICH IS BEFORE THE TRIBUNAL. THIS ASPECT WHETHER THERE IS ANY BREACH OF PRINCIPL ES OF MUTUALITY ON ACCOUNT OF LOSS OF COMPLETE IDENTITY BETWEEN CON TRIBUTORS AND PARTICIPANTS OF SURPLUS REQUIRES TO BE VERIFIED FRO M RECORDS OF THE ASSESSEE SOCIETY IN CONTEXT OF RECENT DECISION OF H ONBLE SUPREME COURT IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIE RTY LIMITED (SUPRA) SO FAR AS THESE NOMINAL MEMBERS ARE CONCE RNED AND TO DETERMINE WHETHER THE ASSESSEE SOCIETY GETS DISENTI TLED TO DEDUCTION U/S 80P BASED ON BREACH OF PRINCIPLES OF MUTUALITY AS IDENTITY BETWEEN CONTRIBUTOR AND PARTICIPANT WAS L OST WHICH THE AO SHALL DETERMINE IN SET ASIDE PROCEEDINGS. T HE CONSTITUTION OF INDIA VIDE ARTICLE 265 PROVIDES THA T TAXES NOT TO BE IMPOSED SAVE BY AUTHORITY OF LAW. NO TAX SHALL B E LEVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. THE MANDATE B EING TO LEVY AND COLLECT CORRECT TAXES ON CORRECT INCOME COMPUTE D UNDER AUTHORITY OF LAW. THE TRIBUNAL HAS WIDE POWERS TO PASS SUCH ORDERS AS IT DEEMS FIT WHICH IS THE MANDATE OF SECT ION 254(1) OF THE 1961 ACT. THUS IN OUR CONSIDERED VIEW UNDER THE SE CIRCUMSTANCES, IN THE INTEREST OF JUSTICE AND FAIRN ESS TO BOTH THE PARTIES, THE MATTER NEED TO BE RESTORED TO THE FILE OF THE AO FOR LIMITED PURPOSES OF VERIFYING AS TO THE RIGHTS, ROL ES, ENTITLEMENTS, DUTIES AND RESPONSIBILITIES OF THESE NOMINAL MEMB ERS IN CONTEXT OF THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LIMITED(SUPRA) AS PER OUR ELABORATE DISCUSSIONS ABOVE. NEEDLESS TO SAY THAT T HE AO SHALL PROVIDE PROPER AND ADEQUATE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL J USTICE IN ACCORDANCE WITH LAW . THE EVIDENCES/CONTENTIONS SUB MITTED BY THE ASSESSEE IN ITS DEFENCE SHALL BE ADMITTED BY TH E AO IN THE I.T.A. NO.2073/MUM/2018 2073 MUM 2018-M/S. TATA MEMORIAL CENTRAL E MPLOYEES CO-OP CREDIT SOCIETY 10 INTEREST OF SUBSTANTIAL JUSTICE BEFORE DECIDING THE ISSUE ON MERITS IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. 7. THE APPEAL OF THE REVENUE IS ALLOWED PARTLY FOR STATISTICAL PURPOSES AS INDICATED ABOVE. 6. CONSIDERING THE FACT THAT THE FACTS OF THE APPEAL U NDER CONSIDERATION ARE IDENTICAL AND THE REVENUE HAS RAISED IDENTICAL GROUNDS OF APPEAL EXCEPT VARIATION OF DISALLOWANCES UNDER SECTION 80P . THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF CO-ORDINATE BEN CH OF THE TRIBUNAL IN ITA NO. 862/MUM/2017 DATED 31.07.2018, THE GROUN DS OF APPEAL FOR THE YEAR UNDER CONSIDERATION IS ALSO RESTORED T O THE FILE OF ASSESSING OFFICER WITH SIMILAR DIRECTION. 7. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 03.07 .2019 SD/- SD/- (G. MANJUNATHA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 03.07.2019 SK P.S. COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED, MUMBAI 4. THE CIT- CONCERNED, MUMBAI 5. THE DR BENCH, 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI