M/s Sri Neelakanteshwara Souharda Pattina Sahakari Niyamita , Gangavathi V. Income Tax Officer Ward-1 , Koppala

ITA 2265/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1089 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-09-2018
• Assessment Year: 2015-2016
• Appeal Filed On: 27-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 80P; 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORESHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 2265 /BANG/201 8 ASSESSMENT YEAR : 201 5 - 1 6 M/S. SRI NEELAKANTESHWARA SOUHARDA PATTINA SAHAKARI NIYAMITA, BUS STAND ROAD, GANGAVATHI. PAN: AACAS4309M VS. THE INCOME TAX OFFICER, WARD 1, KOPPALA. APPELLANT RESPONDENT ASSESSEE BY : SHRI R.E. BALASUBRAMANYAM, CA RE VENUE BY : DR. NISCHAL .B, ADDL. CIT(DR) DATE OF HEARING : 10. 0 9 .2018 DATE OF PRONOUNCEMENT : 14 . 0 9 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A), GULBARGA DATED 29.05.2018 FOR ASSESSMEN T YEAR 2015-16. 2. THE GROUNDS RAISED BY THE ASSESSEEARE AS UNDER. THE APPELLANT OBJECTS TO THE ORDER OF THE LD.CIT(A) ON THE FOLLOWING GROUNDS THAT: 1. THE IMPUGNED ORDER IS OPPOSED TO FACTS AND LAW I N SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE APPELLANT. 2. THE LD.CIT (A) ERRED IN DENYING THE DEDUCTION UN DER SECTION 80P (2) OF THE INCOME TAX ACT IN RESPECT OF INTEREST IN COME RECEIVED FROM VARIOUS BANKS AND IN DOING SO A) HE FAILED TO APPRECIATE THAT THE INTEREST INCOME FROM OTHER BANKS ARE ATTRIBUTABLE TO PROFITS AND GAINS OF THE BUSINE SS OF EXTENDING CREDIT FACILITIES TO APPELLANT'S MEMBERS. B) HE FAILED TO APPRECIATE THAT THE BUSINESS OF THE APPELLANT CONSISTS ENTIRELY OF EXTENDING CREDIT FACILITIES ONLY TO ITS MEMBERS AND THE INTEREST INCOME FROM VARIOUS BANKS AROSE ONLY ON AC COUNT OF KEEPING THE SURPLUS FUNDS FOR THE TIME BEING IN ANTICIPATIO N OF LENDING THE SAME TO THE MEMBERS AS THERE WERE NO READY BORROWERS FOR THE SAID AMOUNT. C) HE FAILED TO APPRECIATE THE FACT THAT THE DECISI ON OF THE HON'BLE SUPREME COURT IN THE CASE OF TOTGARS' CO-OPERATIVE SALES SOCIETY IS DISTINGUISHABLE FROM THE CURRENT CASE AS THE ASSESS EE IN THE EARLIER CASE WAS ENGAGED IN THE ACTIVITY OF MARKETING OF AG RICULTURAL PRODUCE GROWN BY ITS MEMBERS WHICH IS NOT SO IN THE CURRENT CASE. ITA NO.2265/BANG/2018 PAGE 2 OF 3 3. WITHOUT PREJUDICE TO GROUND NO.2 AND AS AN ALTER NATE PLEA THE APPELLANT FURTHER SUBMITS THAT IN RESPECT OF THE IN COME EARNED FROM THE CO-OPERATIVE BANKS IT IS ENTITLED FOR DEDUCTION U/S 80P (2) (D) OF THE ACT INASMUCH AS THE CO-OPERATIVE BANKS ARE ALSO CO- OPERATIVE SOCIETIES AS PER SECTION 2(B1) OF KARNATAKA CO-OPER ATIVE SOCIETIES ACT, 1959. THE APPELLANT PRAYS FOR LEAVE TO ADD, MODIFY, DELET E OR INTRODUCE ADDITIONAL GROUNDS OF APPEAL AT ANY TIME BEFORE THE APPEAL IS DISPOSED OFF. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE ADDUCE D IN TIME TO TIME, IT IS REQUESTED THAT THE HON'BLE ITAT TO CANCEL THE ADDITION MADE BY THE ASSESSING OFFICER AND ALLOW DEDUCTION UNDER SEC TION 80P (2) OF THE ACT. 3. AT THE VERY OUTSET, IT WAS POINTED OUT BY THE BE NCH THAT IN THE PRESENT CASE, THE ASSESSEE IS A SOUHARDA CREDIT CO-OPERATIVE LTD. AND THE TRIBUNAL HAS TAKEN A VIEW IN THE CASE OF M/S. UDAYA SOUHARDA CREDIT CO-O PERATIVE SOCIETY LTD. VS. ITO IN ITA NO. 2831/BANG/2017 DATED 17.08.2018 THAT NO ASSESSEE CAN CLAIM TO BE A CO-OPERATIVE SOCIETY IN THE ABSENCE OF PROP ER REGISTRATION UNDER THE CO- OPERATIVE SOCIETIES ACT. THE TRIBUNAL ALSO HELD TH AT IF THE CREATION OF CO- OPERATIVE SOCIETY UNDER THE CO-OPERATIVE SOCIETIES ACT IS DOUBTFUL, THE CLAIM OF DEDUCTION U/S. 80P CANNOT BE ALLOWED. IN THAT CASE , THE MATTER WAS RESTORED BACK TO THE FILE OF AO TO EXAMINE VARIOUS ASPECTS A FTER MAKING NECESSARY ENQUIRY AND INVESTIGATION AND THEN PASSING A REASON ED ORDER. PARA 13 OF THIS TRIBUNAL ORDER IS RELEVANT WHICH IS REPRODUCED HERE INBELOW FOR READY REFERENCE. 13. WE HAVE ALSO CAREFULLY PERUSED THE CAUSE TITLE IN THE ASSESSMENT ORDER AND IN THE CAUSE TITLE OF THE ASSESSMENT ORDE R, WE FIND THAT ASSESSMENT ORDER WAS PASSED IN THE NAME OF UDAYA SO UHARDA CREDIT CO-OPERATIVE SOCIETY LTD., WHEREAS NO CERTIFICATE O F REGISTRATION WAS PLACED BEFORE US IN THE NAME OF UDAYA SOUHARDHA CRE DIT CO- OPERATIVE SOCIETY LTD. THEREFORE, WE ARE UNABLE TO UNDERSTAND HOW THE ASSESSEE CAN CLAIM IT TO BE THE CO-OPERATIVE SO CIETY IN THE ABSENCE OF PROPER REGISTRATION UNDER THE KARNATAKA CO-OPERA TIVE SOCIETIES ACT. CREATION OF CO-OPERATIVE SOCIETY UNDER THE CO- OPERATIVE SOCIETIES ACT IS DOUBTFUL. THUS THE CLAIM OF DEDUCT ION UNDER SECTION 80P CANNOT BE ALLOWED. AS PER THE PROVISIONS OF SEC TION 80P OF THE ACT, DEDUCTION CAN ONLY BE ALLOWED TO THE CO-OPERAT IVE SOCIETIES REGISTERED UNDER THE CO-OPERATIVE SOCIETIES ACT. WI THOUT A PROPER REGISTRATION UNDER CO-OPERATIVE SOCIETIES ACT, NOBO DY CAN CLAIM IT TO BE CO-OPERATIVE SOCIETY AS THE ACTIVITIES OF THE CO -OPERATIVE SOCIETIES ARE TO BE CONTROLLED UNDER THE CO-OPERATIVE SOCIETI ES ACT THROUGH REGISTRAR OF THE COOPERATIVE SOCIETIES. SINCE ALL T HESE NEW POINTS HAVE BEEN RAISED DURING THE COURSE OF HEARING BEFOR E US AND ACCORDING TO US ALL THESE POINTS GOES TO THE ROOT O F THE CASE, WE ARE OF THE VIEW THAT PROPER ADJUDICATION OF THE ISSUES IS REQUIRED BY THE AO. ITA NO.2265/BANG/2018 PAGE 3 OF 3 WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT (A) A ND RESTORE THE MATTER TO THE AO TO REEXAMINE ALL THESE ASPECTS BY MAKING NECESSARY ENQUIRY AND INVESTIGATION AND ALSO BY PASSING A REA SONED ORDER IN THIS REGARD. SINCE WE HAVE RESTORED THE MATTER TO T HE AO, WE FIND NO JUSTIFICATION TO ADJUDICATE THE ISSUE RAISED ON MER IT. ACCORDINGLY, ORDER OF THE CIT (A) IS SET ASIDE AND MATTER IS RES TORED TO THE AO FOR ADJUDICATION OF THE IMPUGNED ISSUE IN TERMS INDICAT ED ABOVE. 4. THE BENCH POINTED OUT THAT IN THE PRESENT CASE A LSO, NO CERTIFICATE OF REGISTRATION WAS PLACED BEFORE THE TRIBUNAL IN THE NAME OF PRESENT ASSESSEE M/S. SRI NEELAKANTESHWARA SOUHARDA PATTINA SAHAKARI NIYAMITA AND THEREFORE, THE BENCH PUT FORWARD A PROPOSITION THAT RESPECTFUL LY FOLLOWING THIS TRIBUNAL ORDER, IN THE PRESENT CASE ALSO, THE MATTER SHOULD BE RESTORED TO AO FOR FRESH DECISION WITH SIMILAR DIRECTIONS. IN REPLY, BOTH SI DES AGREED TO THIS PROPOSITION PUT FORWARD BY THE BENCH. HENCE, I SET ASIDE THE OR DER OF LD. CIT (A) AND RESTORE THE MATTER BACK TO THE FILE OF AO WITH THE SAME DIR ECTIONS AS WERE GIVEN BY TRIBUNAL IN THAT CASE AS PER PARA 13 OF THAT TRIBUN AL ORDER REPRODUCED ABOVE. I ALSO HOLD THAT IN VIEW OF THIS DECISION, NO ADJUDIC ATION ON MERIT IS CALLED FOR AT THE PRESENT STAGE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 14 TH SEPTEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.