CUFFE PARADE PERSEPOLIS PREMISES CO-OP. SOC. LTD., MUMBAI V. THE PCIT, WARD-17, MUMBAI

ITA 243/MUM/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3246 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 05-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Rule of consistency; Corroborative evidences; TDS
• Section: 263; 143(3); 142(1); 80P; 143(2); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH MUMBAI BEFORE : SHRI M.BALAGANESH, A CCOUNTANT MEMBER & SHRI AMARJI T SINGH , JUDICIAL MEMBER ITA NO. 243 /MUM/ 20 21 ( ASSESSMENT YEAR : 2015 - 16 ) M/S. CUFFE PARADE PERSIPOLIS PREMISES CO - OPER ATIVE SOCIETY LTD., 100, CUFFE PARADE G.D. SOMANI ROAD MUMBAI 400 005 VS. THE PCIT, WARD 17 R.NO.120, 1 ST FLOOR KAUTILYA BHAVAN C - 41 TO C - 43, G - BLOCK BANDRA KURLA COMPLEX MUMBAI - 400 051 PAN/GIR NO. AAAAC2615G (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI HARI RAHEJA REVENUE BY SHRI R.K. SAHU DATE OF HEARING 12 / 10 /2021 DATE OF PRONOUNCEMENT 12 / 10 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 243/MUM/2021 FOR A.Y. 2015 - 16 PREFERRED BY THE ORDER AGAINST TH E REVISION ORDER OF THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX - 17, MUMBAI U/S. 263 OF THE ACT DATED 22/01/2021 FOR THE A.Y.2015 - 16. ITA NO . 243/MUM/2021 M/S. CUFFE PARADE PERSEPOLIS PREMISES CO - OPERATIVE SOCIETY LIMITED 2 2. THE ONLY ISSUE TO BE DECIDED IS AS TO WHETHER THE LD PCIT HAD VALIDLY ASSUMED REVISION JURISDICTION U/S 263 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE IS A CO - OPERATIVE HOUSING SOCIETY REGISTERED UNDER THE MAHARSHTRA CO - OPERATIVE SOCIETIES A CT. THE MAIN SOURCE OF INCOME SHOWN BY THE ASSESSEE IS ON ACCOUNT OF INTEREST INCOME FROM CO - OPERATIVE BANKS . IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED DEDUCTION U/S 80P OF THE ACT FOR THE SAME AND ACCORDINGLY THE RETURN OF INCOME FOR THE ASST YEAR 2015 - 16 WAS FILED BY THE ASSESSEE ON 21.9.2015 DECLARING TOTAL INCOME OF RS NIL. THE RETURN WAS SELECTED FOR LIMITED SCRUTINY BY ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. IN THE SAID NOTICE, THE DEDUCTION CLAIMED BY THE ASSSESSEE UNDER CHAPTER VI OF THE A CT WAS DIRECTED TO BE EXAMINED BY THE LD AO. ACCORDINGLY, THE LD AO ISSUED THEREAFTER NOTICE U/S 142(1) OF THE ACT DATED 20.6.2017 ASKING FOR THE RELEVANT DETAILS : - QUESTION NO. 3 PLEASE FILE HEAD WISE BREAK UP OF INCOME EARNED WITH NOTE THEREON. QUEST ION NO. 6 PLEASE FURNISH DETAILS OF ALL THE EXPENDITURE DEBITED IN PROFIT & LOSS ACCOUNTS IN FOLLOWING FORMAT : S.NO. NAME PAN ADDRESS AMOUNT NATURE OF EXPENSE TDS DEDUCTED DATE OF PAYMENT ITA NO . 243/MUM/2021 M/S. CUFFE PARADE PERSEPOLIS PREMISES CO - OPERATIVE SOCIETY LIMITED 3 QUESTION NO. 7 PLEASE FILE COMPLETE DETAILS OF DEDUCTION CLAIM ED UNDER CHAPTER VIA WITH NECESSARY SUPPORTING EVIDENCES. QUESTION NO. 9 - PLEASE FURNISH THE COPY OF ASSESSMENT ORDERS FOR THE LAST THREE ASSESSMENT YEARS. IN THIS REGARD YOU ARE ASKED TO EXPLAIN AS TO WHY SIMILAR ADDITIONS / DISALLOWANCES MADE IN EARLIER YEARS SHOULD NOT BE MADE FOR THE YEAR UNDER CONSIDERATION ALSO. 3.1. WE FIND THAT THE ASSESSEE VIDE ITS WRITTEN REPLY DATED 27.6.2017 FURNISHED THE AFORESAID DETAILS BEFORE THE LD AO WITH ALL THE SUPPORTING DOCUMENTS AND EVIDENCES IN THE FORMAT REQUIRED BY THE LD AO. THIS LETTER IS ENCLOSED IN PAGES 6 & 7 OF THE PAPER BOOK FILED BEFORE US BY THE ASSESSEE. FROM THE PERUSAL OF THE DETAILS FILED IN RESPECT OF INTEREST INCOME EARNED BY THE ASSESSEE IN THE SUM OF RS 20,05,338/ - WHICH ARE ENCLOSED IN PAGE 8 OF THE PAPER BOOK FILED BEFORE US, WE FIND THAT THE ENTIRE INTEREST INCOME WAS DERIVED BY THE ASSESSEE FROM CO - OPERATIVE BANKS VIZSARASWAT CO - OP BANK LTD AND SHAMRAOVITHAL CO - OP BANK LTD. WE FIND THAT THE ASSESSEE ALSO GAVE THE SCRUTINY ASSESSMENT ORDERS FRA MED IN ITS HANDS FOR THE ASST YEARS 2013 - 14 AND 2014 - 15 AS UNDER: - AY 2013 - 14 ORDER U/S 143(3) DATED 30.12.2015 (ENCLOSED IN PAGE 9 OF THE PAPER BOOK FILED BEFORE US) AY 2014 - 15 ORDER U/S 143(3) DATED 13.12.2016 (ENCLOSED IN PAGE 11 OF THE PAPER BOOK FI LED BEFORE US) 3.2. WE FIND THAT THE LD AO ON PERUSAL OF THE AFORESAID DETAILS AND EXPLANATIONS FURNISHED BY THE ASSESSEE TOGETHER WITH THE COPY OF ASSESSMENT ORDERS FRAMED FOR THE IMMEDIATELY PRECEDING TWO ASSESSMENT YEARS UNDER IDENTICAL FACTS AND CIRCU MSTANCES, PROCEEDED TO COMPLETE THE ASSESSMENT U/S 143(3) OF THE ACT ON 16.8.2017 DETERMINING TOTAL INCOME ITA NO . 243/MUM/2021 M/S. CUFFE PARADE PERSEPOLIS PREMISES CO - OPERATIVE SOCIETY LIMITED 4 OF THE ASSESSEE AT RS NIL AFTER ALLOWING THE CLAIM OF DEDUCTION U/S 80P OF THE ACT. INFACT THE LD AO EVEN MADE AN ADDITION TOWARDS INTEREST INCOME OF RS 10,695/ - FROM M/S BEST AND GRANTED DEDUCTION U/S 80P OF THE ACT EVEN FOR THAT INTEREST OF RS 10,695/ - AND COMPLETED THE ASSESSMENT. 3.3. THIS ASSESSMENT WAS SOUGHT TO BE REVISED BY THE LD. PCIT ON THE GROUND THAT THE LD AO HAD NOT UNDERTAKEN SUFFICIE NT ENQUIRIES A) TO DETERMINE THE TRUE CHARACTER AND NATURE OF THE INCOME B) TO DETERMINE WHETHER THE INVESTMENT OF FUNDS WERE A BUSINESS ACTIVITY OF THE ASSESSEE OR IDLE SURPLUS FUNDS WERE INVESTED MAKING THEM INELIGIBLE OF DEDUCTION U/S 80P C) TO DETER MINE WHETHER THE TRANSACTIONS OF THE ASSESSEE AMOUNTED TO BANKING ACTIVITIES D) TO DETERMINE APPLICABILITY OF AMENDED SECTION 80P(4) 3.4. ACCORDINGLY, THE LD. PCIT HELD THAT THE ORDER OF THE LD AO IS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIAL TO THE INTERE STS OF THE REVENUE BY STATING THAT THE LD AO HAD FAILED TO MAKE NECESSARY INQUIRY AND BRING ON RECORD ALL FACTS NECESSARY FOR DETERMINING THE TRUE CHARACTER AND NATURE OF THE INCOME, ESPECIALLY IN THE LIGHT OF AMENDED SECTION 80P(4) OF THE ACT. 4. FROM THE PERUSAL OF THE FACTS NARRATED HEREINABOVE , WE FIND THAT THE LD AO HAD INDEED MADE REQUISITE ENQUIRIES ON THE SUBJECT MENTIONED ISSUE OF CLAIM OF DEDUCTION U/S 80P OF THE ACT. INFACT THE RETURN ITSELF WAS SELECTED FOR LIMITED SCRUTINY ONLY FOR EXAMINI NG THE SAID DEDUCTION. THE LD AO HAD INDEED CARRIED OUR REQUISITE ENQUIRIES ON THE SAME AND HAD DULY APPLIED HIS MIND ON THE ELIGIBILITY OF ASSESSEE FOR CLAIMING DEDUCTION U/S 80P OF THE ACT BY TAKING DUE COGNIZANCE OF THE FACT THAT THE ASSESSEE IS A REGI STERED CO - OPERATIVE HOUSING SOCIETY DERIVING INTEREST INCOME FROM ITA NO . 243/MUM/2021 M/S. CUFFE PARADE PERSEPOLIS PREMISES CO - OPERATIVE SOCIETY LIMITED 5 DEPOSITS KEPT WITH CO - OPERATIVE BANKS. MOREOVER, THE ASSESSEE HAD INDEED PLACED THE COPIES OF SCRUTINY ASSESSMENT ORDERS FOR THE IMMEDIATELY PRECEDING TWO ASSESSMENT YEARS BEFORE THE LD AO , WHEREIN UNDER IDENTICAL FACTS AND CIRCUMSTANCES, THE LD AO HAD ACCEPTED THE FACT THAT INTEREST RECEIVED FROM A CO - OPERATIVE BANK WOULD BE ELIGIBLE FOR DEDUCTION U /S 80P OF THE ACT. THEREFORE, THE LD AO COULD NOT HAVE TAKEN ANY OTHER VIEW IN THE MATTER WHILE FRAMING THE ASSESSMENT AS HE IS BOUND TO APPLY THE RULE OF CONSISTENCY. WHEN THE RULE OF CONSISTENCY HAS BEEN APPLIED BY THE LD AO, HIS ORDER CANNOT BE TERMED AS ERRONEOUS WITHOUT BRINGING ANY FRESH FACTS ON RECORD. THE LD PCIT HAD NOT BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT THE FACTS PREVAILING IN ASST YEARS 2013 - 14 AND 2014 - 15 WERE DIFFERENT FROM THAT OF FACTS PREVAILING IN THE YEAR UNDER CONSIDERATION. HENCE IN OUR CONSIDERED OPINION, THE CONCLUSION OF THE LD PCIT THAT NO ENQUIRIES WERE IN DEED CARRIED OUT BY THE LD AO CANNOT BE ACCEPTED AND HENCE THE REVISION ORDER PASSED BY HIM U/S 263 OF THE ACT IS HEREBY QUASHED. RELIANCE IN THIS REGARD HAS BEEN RIGHTLY PLACED BY THE LD AR ON THE FOLLOWING DECISIONS: - A) DECISION OF MUMBAI TRIBUNAL IN THE CASE OF JAI HIND CO - OP HSG.SOC. LTD VS PCIT IN ITA NOS. 1762 & 1763/MUM/2020 DATED 12.2.2021 WHEREIN IT WAS HELD AS UNDER: - 10. UPON CAREFUL CONSIDERATION, AS ALREADY NOTED BY US IN PARA - 6 ABOVE, A SPECIFIC QUERY WAS RAISED BY LD. AO DURING ORIGINAL A SSESSMENT PROCEEDINGS REGARDING DEDUCTION CLAIMED U/S 80P(2)(D) WHICH WAS DULY RESPONDED TO BY THE ASSESSEE. THE DECISION OF THIS TRIBUNAL RENDERED IN LANDS END CO - OPERATIVE HOUSING SOCIETY LTD. (ITA NO.3566/MUM/2014 DATED 15/01/2016) WAS BROUGHT TO THE NO TICE OF LD. AO IN SUPPORT OF THE DEDUCTION. THE LD. AO WAS CLINCHED WITH THE ISSUE OF DEDUCTION U/S 80P(2)(D) AND ASSESSEE'S CLAIM WAS ALLOWED AFTER DUE APPLICATION OF MIND AND A VIEW WAS ALREADY TAKEN IN THE MATTER. THEREFORE, THE ALLEGATION OF LD. PR. CI T THAT THE DEDUCTION WAS ALLOWED WITHOUT VERIFICATION AND NECESSARY INQUIRES IS BEREFT OF ANY MERITS. WE FIND THAT IT NOT A CASE OF 'NO INQUIRY' BUT IT IS A CASE WHEREIN A PLAUSIBLE / ITA NO . 243/MUM/2021 M/S. CUFFE PARADE PERSEPOLIS PREMISES CO - OPERATIVE SOCIETY LIMITED 6 POSSIBLE VIEW HAS BEEN TAKEN BY LD. AO AFTER DUE CONSIDERATION OF ISSUE OF DEDUCTION U/S 80P(2)(D). B) DECISION OF MUMBAI TRIBUNAL IN THE CASE OF ITO VS M/S MIG CO - OP HOUSING SOCIETY GROUP IN ITA NOS. 7325 - 7327/MUM/2019 DATED 9.8.2021 10. AS REGARDS THE ISSUE OF DENIAL OF 80P(2)(D) DEDUCTION, WE NOTE THAT THE ISSUE IS SQ UARELY COVERED IN FAVOUR OF THE ASSESSEE. LEARNED COUNSEL OF THE ASSESSEE HAS SUBMITTED AS UNDER : - '1. THE CAPTIONED APPEALS PREFERRED BY THE DEPARTMENT WERE HEARD BEFORE YOUR HONOURS ON JUNE 2, 2021. ONE OF THE GROUNDS OF APPEAL RAISED BY THE DEPARTMENT IN ALL THREE APPEALS IS REGARDING ALLOWABILITY OF DEDUCTION U/S. SOP CLAIMED BY THE RESPONDENT ASSESSEE. DURING THE COURSE OF THE HEARING, OUR LEARNED AUTHORIZED REPRESENTATIVE MR. YOGESH THAR HAD ARGUED THAT INSOFAR AS CLAIM OF DEDUCTION U/S. SOP OF THE ACT IS CONCERNED, THE SAME IS COVERED IN ASSESSEE'S FAVOUR BY THE DECISION OF THE HON JURISDICTIONAL MUMBAI TRIBUNAL IN ASSESSEE'S OWN CASE FOR AY 2011 - 12 (ITA NO. 896/M/2016, ORDER DATED FEBRUARY 17, 2017 (COPY HAS BEEN ALREADY FILED IN THE FACTUAL PAPERB OOK ON 21.05.2021). 2. DURING THE COURSE OF THE HEARING, IT FELL FROM THE HON BENCH THAT THERE IS A RECENT FULL BENCH DECISION OF THE HON SUPREME COURT WHEREIN THE HON SUPREME COURT HAS ELABORATELY DEALT WITH THE ISSUE OF ALLOWABILITY OF S. SOP DEDUCTION IN THE CONTEXT OF DIFFERENT TYPES OF CO - OPERATIVE SOCIETIES THAT ARE ENTITLED TO CLAIM THE SAID DEDUCTION. ACCORDINGLY, THE HON'BLE BENCH DESIRED THAT THE ASSESSEE MAY FURNISH A NOTE IN THE MATTER AND THE MATTER WAS TREATED AS HEARD. 3. IN DEFERENCE TO TH E AFORESAID, WE ARE FILING THIS NOTE TOGETHER WITH A COPY OF THE SAID DECISION OF THE HON SUPREME COURT IN THE CASE OF THE MAVILAYI SERVICE COOPERATIVE BANK LTD. & ORS. VS. CIT, CALICUT & ORS. (CIVIL APPEAL NOS. 7343 - 7350 OF 2019 DATED 12.1.2021)(COPY ATTA CHED AT ANNEXURE 1 TO THIS NOTE). THE CRUX OF THE SAID DECISION IS THAT PROVISIONS OF S.S. (4) TO S. SOP CANNOT COME IN THE WAY WHILE ALLOWING DEDUCTION U/S. SOP OF THE ACT TO AN ASSESSEE. BEING A CO - OPERATIVE SOCIETY, AS LONG AS THE SAID ASSESSEE IS NOT A CO - OPERATIVE BANK. 4. FOLLOWING THE SAID DECISION, THE HON JURISDICTIONAL MUMBAI TRIBUNAL HAS ALLOWED IDENTICAL CLAIM OF DEDUCTION U/S. 80P(2)(D) AND 80P(2)(C) OF THE ACT IN THE CASE OF NEW IDEAL COOPERATIVE HOUSING SOCIETY LTD. V. ITO (1TA NO. 2681/M/1 9, ORDER DATED 03.02.2021) (COPY ATTACHED AT ANNEXURE 2 WITH THIS NOTE). 5. THE APPELLANT SUBMITS THAT SINCE IT IS A COOPERATIVE HOUSING SOCIETY AND NOT A COOPERATIVE BANK, S, 80P(4) HAS NO ROLE TO PLAY AND THEREFORE DEDUCTION CLAIMED U/S. 80P(2)(D) AND 8 0P(2)(C) DESERVES TO BE ALLOWED IN ENTIRETY. 6. SIMILAR IS THE RATIO OF THE DECISIONS OF THE HON JURISDICTIONAL MUMBAI TRIBUNAL IN FOLLOWING CASES; 6.1. LAND END COOPERATIVE HOUSING SOCIETY LTD. V. ITO (46 CCH 52) (MUM); ITA NO . 243/MUM/2021 M/S. CUFFE PARADE PERSEPOLIS PREMISES CO - OPERATIVE SOCIETY LIMITED 7 6.2. SEA GREEN CO OPERATIVE HOUSING SOCIETY LTD. V. ITO (ITA NO. 1343/M/17, ORDER DATED 31.03.2017) (MUM); 6.3. MERWANJEE CAMA PARK COOPERATIVE HOUSING SOCIETY LTD. V. ITO (ITA NO. 6139/M/14, ORDER DATED 27.09.2017) (MUM); 6.4. ITO V. ASHOKA APT . C.H.S. LTD. (ITA NO. 2845/M/10) (MUM); 6.5. ITO V. SAGAR SANJOG C.H.S. LTD. (ITA NO. 1972 - 74/M/2005)(MUM); 6.6. ITO V. PANCHARATNA CO. OP. HSG. SOC. LTD. (ITA 2858/MUM/2010) (MUM) 7. IN VIEW OF TH E FOREGOING AS ALSO THE DECISION IN APPELLANT'S OWN CASE FOR AY 2011 - 12, THE RESPONDENT ASSESSEE MOST HUMBLY SUBMITS THAT THE CLAIM OF DEDUCTION U/S. 80P(2)(D) AND 80P(2)(C) BE ALLOWED AND APPEALS OF THE DEPARTMENT BE DISMISSED ON THAT GROUND.' HENCE WE F IND THAT THE MAIN REASON FOR DISALLOWING THE CLAIM HERE IS BY HIS MISTAKEN INVOCATION OF SECTION 80P(4) OF THE ACT. THIS HAS BEEN DULY SETTLED BY HON'BLE SUPREME COURT THAT .IN THE CASE OF COOPERATIVE SOCIETIES THIS SECTION CANNOT BE INVOKED AS THEY CANNOT BE HELD TO BE COOPERATIVE BANK. WHEN THEY HAVE A LEASE FROM RBI TO THIS EFFECT. 11. EXAMINING THE LEARNED CIT(A)'S ORDER ON THE CONSPECTUS OF AFORESAID DECISIONS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). HENCE, WE UPHOLD THE SAME. 4 .1. IN VIEW OF OUR AFORESAID OBSERVATIONS IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE AND RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE HAVE NO HESITATION IN QUASHING THE REVISION ORDER PASSED BY THE LD PCIT U/S 263 OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 12 / 10 /202 1 . SD/ - ( AMARJIT SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 12 / 10 / 2021 KARUNA , SR.PS ITA NO . 243/MUM/2021 M/S. CUFFE PARADE PERSEPOLIS PREMISES CO - OPERATIVE SOCIETY LIMITED 8 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRU E COPY//