M/s Snehasagara Souhardha Co-opperative Ltd , Sindhanur V. Income TAx Officer Ward-2 , Raichur

ITA 2516/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8946 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 28-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINANDINI DAS
• Assessee Lawyers: JINITA CHATERJEE
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHR I ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 2516 /BANG/201 7 ASSESSMENT YEAR : 201 0 - 1 1 M/S. SNEHASAGARA SOUHARDHA CO-OPERATIVE LTD., GANGAVATHI ROAD, SINDHANUR 584 128. DIST. RAICHUR. PAN: AACAS0492F VS. THE INCOME TAX OFFICER, WARD 2, RAICHUR. APPELLANT RESPONDENT ASSESSEE BY : SMT. JINITA CHATERJEE, ADVOCATE RE VENUE BY : SMT. SRI NANDINI DAS, ADDL. CIT (DR) DATE OF HEARING : 11 . 10 .2018 DATE OF PRONOUNCEMENT : 12 . 10 .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 18.09.2017 FOR ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEEARE AS UNDER. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN PASSI NG THE ORDER IN THE MANNER HE DID. 2. THE LEARNED CIT(A) GROSSLY ERRED IN DISALLOWING RS.13,31,254/- UNDER SECTION 80P(2)(A)(I) OF THE ACT WITHOUT APPRE CIATING THE FACT THAT THE APPELLANT IS A CO-OP SOCIETY AND NOT A COO PERATIVE BANK. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THE APPELLANT WAS ENTITLED TO THE EXEMPTION UNDER SECTI ON 80P(2)(A)(I) OF THE ACT SINCE IT IS A SOCIETY PROVIDING CREDIT F ACILITIES TO ITS MEMBERS ONLY AND THE SOCIETY PER SE WAS NOT CARRYIN G ON BUSINESS OF BANKING. 4. THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED TH AT THE BAR PROVIDED UNDER SECTION 80P (4) OF THE ACT WAS ONLY WITH REGARD TO THE CO-OPERATIVE BANK AND THE SAID BAR WAS NOT APPL ICABLE TO THE APPELLANT-SOCIETY. 5. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT THE APPELLANT CO-OP IS PERMITTED DO THE MUTUAL BENEFIT ACTIVITY OF ITA NO.2516/BANG/2017 PAGE 2 OF 4 ACCEPTANCE OF DEPOSIT ONLY FROM THE MEMBER AND ALSO PROVIDES CREDIT FACILITIES ONLY TO THE MEMBERS AND IS NOT PE RMITTED TO ENGAGE IN FULL SCALE BANKING BUSINESS AS PERMITTED BY THE PROVISIONS OF BANKING REGULATING ACT, 1949. 6. ON THE FACTS, THE LEARNED CIT(A) OUGHT TO HAVE A CCEPTED THE EXPLANATION OFFERED BY THE APPELLANT AND ALLOWED TH E EXEMPTION TO THE APPELLANT-SOCIETY AS CLAIMED IN THE RETURN. 7. THE LEARNED CIT(A) ERRED IN RELYING ON THE JUDGM ENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CITIZEN CO-OPE RATIVE SOCIETY (TS-326 SC 2017) DT.16 TH AUGUST 2016 WITHOUT APPRECIATING THE FACTS OF THE PRESENT CASE WHICH IS COMPLETELY DIFFE RENT AND THE ABOVE SUPREME COURT JUDGMENT IS DISTINGUISHABLE. 8. WITHOUT PREJUDICE, THE ADDITION AS CONFIRMED BY THE LEARNED CIT(A) IS ARBITRARY, EXCESSIVE, UNREASONABLE AND OU GHT TO BE DELETED IN FULL. 9. THE LEARNED CIT(A) ERRED IN CONFIRMING INTEREST CHARGED UNDER SECTION 234B OF THE ACT BY THE ASSESSING OFFICER. 10. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEA L MAY BE ALLOWED. 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 CRE DIT CO-OPERATIVE SOCIETY LTD. VS. ITO IN ITA NO. 2831/BANG/2017 DATE D 17.08.2018 WHEREIN IT WAS HELD THAT NO ASSESSEE CAN CLAIM TO BE A CO-O PERATIVE SOCIETY IN THE ABSENCE OF PROPER REGISTRATION UNDER THE CO-OPERATI VE SOCIETIES ACT. THE TRIBUNAL ALSO HELD THAT IF THE CREATION OF CO-OPERA TIVE SOCIETY UNDER THE CO- OPERATIVE SOCIETIES ACT IS DOUBTFUL, THE CLAIM OF D EDUCTION U/S. 80P CANNOT BE ALLOWED. IN THAT CASE, THE MATTER WAS RESTORED BACK TO THE FILE OF AO TO EXAMINE VARIOUS ASPECTS AFTER MAKING NECESSARY ENQU IRY AND INVESTIGATION AND THEN PASSING A REASONED ORDER. PARA 13 OF THIS TRIBUNAL ORDER IS RELEVANT WHICH IS REPRODUCED HEREINBELOW FOR READY REFERENCE. 13. WE HAVE ALSO CAREFULLY PERUSED THE CAUSE TITLE IN THE ASSESSMENT ORDER AND IN THE CAUSE TITLE OF THE ASSE SSMENT ORDER, WE FIND THAT ASSESSMENT ORDER WAS PASSED IN THE NAM E OF UDAYA SOUHARDA CREDIT CO-OPERATIVE SOCIETY LTD., WHEREAS NO CERTIFICATE OF REGISTRATION WAS PLACED BEFORE US IN THE NAME OF UDAYA SOUHARDHA CREDIT CO-OPERATIVE SOCIETY LTD. TH EREFORE, WE ARE UNABLE TO UNDERSTAND HOW THE ASSESSEE CAN CLAIM IT TO BE THE ITA NO.2516/BANG/2017 PAGE 3 OF 4 CO-OPERATIVE SOCIETY IN THE ABSENCE OF PROPER REGIS TRATION UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT. CREATION OF CO- OPERATIVE SOCIETY UNDER THE CO-OPERATIVE SOCIETIES ACT IS DOUBTFUL. THUS THE CLAIM OF DEDUCTION UNDER SECTION 80P CANNO T BE ALLOWED. AS PER THE PROVISIONS OF SECTION 80P OF TH E ACT, DEDUCTION CAN ONLY BE ALLOWED TO THE CO-OPERATIVE S OCIETIES 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-OPERATI VE SOCIETIES ACT THROUGH REGISTRAR OF THE COOPERATIVE SOCIETIES. SIN CE ALL THESE NEW POINTS HAVE BEEN RAISED DURING THE COURSE OF HE ARING BEFORE US AND ACCORDING TO US ALL THESE POINTS GOES TO THE ROOT OF THE CASE, WE ARE OF THE VIEW THAT PROPER ADJUDICATION O F THE ISSUES IS REQUIRED BY THE AO. WE ACCORDINGLY SET ASIDE THE OR DER OF THE CIT (A) AND RESTORE THE MATTER TO THE AO TO REEXAMI NE ALL THESE ASPECTS BY MAKING NECESSARY ENQUIRY AND INVESTIGATI ON AND ALSO BY PASSING A REASONED ORDER IN THIS REGARD. SINCE W E HAVE RESTORED THE MATTER TO THE AO, WE FIND NO JUSTIFICA TION TO ADJUDICATE THE ISSUE RAISED ON MERIT. ACCORDINGLY, ORDER OF THE CIT (A) IS SET ASIDE AND MATTER IS RESTORED 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 IS PLACED BEFORE US IN THE NAME OF PRE SENT ASSESSEE M/S. SNEHASAGARA SOUHARDHA CO-OPERATIVE LTD. AND THEREFO RE, THE BENCH PUT FORWARD A PROPOSITION THAT RESPECTFULLY FOLLOWING T HIS TRIBUNAL ORDER, IN THE PRESENT CASE ALSO, THE MATTER SHOULD BE RESTORED TO AO FOR FRESH DECISION WITH SIMILAR DIRECTIONS. IN REPLY, BOTH SIDES AGREE D TO THIS PROPOSITION PUT FORWARD BY THE BENCH. HENCE, WE SET ASIDE THE ORDER OF LD. CIT (A) AND RESTORE THE MATTER BACK TO THE FILE OF AO FOR A FRE SH DECISION WITH THE SAME DIRECTIONS AS WERE GIVEN BY TRIBUNAL IN THAT CASE A S PER PARA 13 OF THAT TRIBUNAL ORDER REPRODUCED ABOVE.WE ALSO HOLD THAT I N VIEW OF THIS DECISION, NO ADJUDICATION ON MERIT IS CALLED FOR AT THE PRESE NT STAGE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 12 TH OCTOBER, 2018. /MS/ ITA NO.2516/BANG/2017 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.