Kolhapur Udyam Co.op. Society Ltd., V. Income-tax Officer,

ITA 262/PUN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88852 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 29-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 10-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO . 262 / P N/ 20 1 4 ASSESSMENT YEAR : 20 08 - 09 KOLHAPUR UDYAM CO - OP. SOC. LTD., 1328 /25, A, Y.P. POWAR NAGAR, KOLHAPUR - 416002 VS. INCOME TAX OFFICER, WARD 1(1), KOLHAPUR (APPELLANT) (RESPONDENT) PAN NO. AAAAK0364N ITA NO . 26 3 /PN/20 14 ASSESSMENT YEAR : 200 9 - 10 KOLHAPUR UDYAM CO - OP. SOC. LTD., 1328/25, A, Y.P. POWAR NAGAR, KOLHAPUR - 416002 VS. INCOME TAX OFFICER, WARD 1(3), KOLHAPUR (APPELLANT) (RESPONDENT) PAN NO. AAAAK0364N APPELLANT BY: SHRI M.K. KULKARNI RESPONDENT BY: SHRI RAJESH DAMOR DATE OF HEARING : 2 9 - 01 - 2015 DATE OF PRONOUNCEMENT : 30 - 01 - 201 5 ORDER PER BENCH : - BOTH THESE APPEALS ARE FILED BY THE ASSESSEE CHALLENGING THE RESPECTIVE IMPUGNED ORDERS OF THE LD. CIT(A), KOLHAPUR DATED 20 - 11 - 2013 FOR THE A. YRS. 2008 - 09 AND 2009 - 10. 2. WE FIRST TAKE THE APPEAL FOR THE A.Y. 2008 - 09 BEING ITA N O. 262/PN/2014. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. WHETHER LD. CIT(A), KOLHAPUR WAS JUSTIFIED IN REJECTING THE APPEAL OF THE ASSESSEE AS BARRED BY LIMITATION AND WITHOUT CONDONING THE DELAY OF 46 DAYS OCCURRED IN THE FILING OF THE APPEAL WHICH DELAY WAS ADMITTED BY CA AND AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WAS DUE TO HIM. IT IS SETTLED LAW THAT DELAY IS CONDONED WHEN IT IS DUE TO THE REPRESENTATIVE OF THE ASSESSEE AS ASSESSEE SHOULD NOT 2 ITA NO S. 262 & 263/PN/2014, KOLHAPUR UDYAM CO - OP. SOC. LTD., KOLHAPUR SUFFER DUE TO THE MISTAKE OF THE AUTHO RIZED REPRESENTATIVE. IT BE HELD ACCORDINGLY. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND IN VIEW OF GROUND NO. 1 ABOVE THE DIRECTIONS BE ISSUED TO LD. CIT(A) TO CONDONE THE DELAY AND ADMIT THE APPEAL FOR ADJUDICATION IN ACCORDANCE WITH THE P ROVISION OF LAW. 3. WHETHER IN VIEW OF THE PROVISIONS OF S. 250(6) OF THE ACT THE LD. CIT(A) OUGHT TO HAVE PASSED A 'SPEAKING APPEAL ORDER' ON MERITS CONSIDERING THE FOLLOWING GROUNDS RAISED BEFORE HIM? A. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW TH E LD. ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF DEDUCTION AGAINST THE PRINCIPLES OF LAW MADE UNDER SECTION 80P(2)(E) OF THE ACT OF RS.60,45,687/ - . THE CLAIM BE ALLOWED IN FULL. B. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF RS.4,84,320/ - AGAINST THE PRINCIPLES OF LAW MADE U/S 80 - P(2)(A)(I) OF THE ACT. THE CLAIM BE ALLOWED IN FULL AND U/S SOP (2)(D) FOR INTEREST OF RS.25,88,286/ - . C. ON THE FACTS AND CIRCUMSTANC ES OF THE CASE AND IN LAW THE LEVY OF INTEREST U/S. 234A, 234B AND 234C IS NOT JUSTIFIED. THE LEVY OF INTEREST BY DELETED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE APPEAL ORDER OF THE LD. CIT(A) BE SET ASIDE FOR MAKING FRESH APPEAL ORDE R IN THE INTEREST OF JUSTICE. 3 . THE FACTS WHICH REVEALED FROM THE RECORD ARE AS UNDER. THE ASSESSEE IS A CO - OPERATIVE SOCIETY WHICH IS ENGAGED IN THE SUPPLIES OF A RANGE OF FACILITIES TO ITS MEMBERS WHICH MAINLY INCLUDE MAKING AVAILABLE GALAS/PLOTS ON LONG LEASE BASIS FOR USE IN THE MEMBERS INDUSTRY. THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED U/S. 143(3) OF THE ACT VIDE ORDER DATED 08 - 12 - 2010. THE ASSESSING OFFICER MADE CERTAIN ADDITIONS TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGE D THE ASSESSMENT ORDER BEFORE THE LD. CIT(A). THERE WAS A DELAY OF 46 DAYS IN FILING THE APPEAL. THE LD. CIT(A) SOUGHT THE EXPLANATION OF THE ASSESSEE ON THE DELAY. THE ASSESSEE STATED REASONS WHICH ARE REPRODUCED IN THE 3 ITA NO S. 262 & 263/PN/2014, KOLHAPUR UDYAM CO - OP. SOC. LTD., KOLHAPUR IMPUGNED ORDER IN PARA NO. 3. T HE LD. CIT(A) DECLINED TO CONDONE THE DELAY AND DISMISSED THE APPEAL. 4. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBMITS THAT DELAY WAS DUE TO THE LAPSE ON THE PART OF THE CONSULTANT AND THE ASSESSEE SHOULD NOT BE DEPRIVE D FROM GETTING THE JUSTICE. H E PLEADED FOR CONDONING THE DELAY AND RESTORING THE MATTER BACK TO THE FILE OF THE LD. CIT(A). WE HAVE ALSO HERD THE LD. DR. 5 . WE FIND THAT ON THE TECHNICAL REASON OF DELAY OF 46 DAYS FOR FILING THE APPEAL , THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE. THE MAIN CONTENTION OF THE ASSESSEE IS THAT THEY APPROACHED THE CONSULTANT IN TIME BUT THERE WAS LAPSE ON THE PART OF THE CONSULTANT WHO WAS A CHARTERED ACCOUNTANT FOR FILING THE APPEAL. IN OUR OPINION THERE WAS REASONABLE CAUSE FOR DELAY IN FILING THE APPEAL AND CIT(A) SHOULD HAVE CONDONED THE DELAY. ADMITTEDLY, THERE IS A DISCRETION VESTED IN THE AUTHORITIES BY THE LAW ITSELF AND THAT DISCRETION MUST BE EXERCISED JUDICIOUSLY. WE, ACCORDINGLY, CONDONE THE DELAY IN FILING THE APPEAL BEFOR E THE CIT(A), KOLHAPUR AND RESTORE THE ENTIRE MATTER TO HIS FILE FOR DECIDING THE GROUNDS TAKEN ON MERIT. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND GROUND NO. 3 IN THIS APPEAL IS REMITTED TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION. THE G ROUND NOS. 1 AND 2 ARE ALLOWED AND GROUND NO. 3 IS ALLOWED FOR STATISTICAL PURPOSE. GROUND NOS. 4 AND 5 ARE GENERAL IN NATURE. 6 . NOW, WE TAKE UP THE APPEAL FOR THE A.Y. 2009 - 10 BEING ITA NO. 263/PN/2014. GROUND NO. 1 READS AS UNDER: 1. ON THE FACTS AND C IRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) KOLHAPUR WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE - SOCIETY MADE UNDER S. 80P(2)(D) OF THE ACT HOLDING THAT IN VIEW OF HON'BLE SUPREME COURT JUDGMENT IN ITO V. TOTEGARS CO. OPERATIVE SALE SOC IETY LTD. 322 ITR 283 THE ASSESSEE WAS NOT ELIGIBLE TO DEDUCTION U/S 80P(2)(D) OF THE ACT. THE HON'BLE SUPREME COURT ITSELF AND THE ANDHRA PRADESH HIGH COURT IN CIT V. ANDHRA PRADESH STATE CO. OP. BANK LTD. (2011) 336 ITR 516(AP) HELD THAT THE SAID 4 ITA NO S. 262 & 263/PN/2014, KOLHAPUR UDYAM CO - OP. SOC. LTD., KOLHAPUR JUDGMEN T WAS ON THE FACTS OF THAT CASE ONLY. THE LD. CIT(A) WAS NOT JUSTIFIED IN RELYING ON TOTEGARS (SUPRA) TO REJECT THE CLAIM. IT BE HELD ACCORDINGLY. 7 . THE ISSUE IN CONTROVERSY IS A NARROW COMPASS. THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAD C LAIMED THE BENEFIT OF SEC. 80P IN RESPECT OF ITS INCOME. THERE IS ELEMENT OF INTEREST INCOME OF RS.7,04,590/ - WHICH WAS RECEIVED FROM THE STATE BANK OF INDIA. THE ASSESSING OFFICER DECLINED TO GIVE BENEFIT OF SEC. 80P(2)(D) TO THE ASSESSEE. THE ASSESSEE CHALLENGED THE ADDITION MADE BY THE ASSESSING OFFICER BEFORE THE LD. CIT(A) BUT WITHOUT SUCCESSES. THE LD. CIT(A) WAS OF THE OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY DECLINED TO GIVE THE BENEFIT OF SEC. 80P(2)(D) TO THE EARNED INTEREST OF RS.7,04,5 90/ - ON THE DEPOSITS MADE WITH THE STATE BANK OF INDIA. THE LD. CIT(A) ALSO RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY LTD. VS. ITO 322 ITR 283 AND HE CONCLUDED THAT THE INTEREST INCOME EARNED FROM THE B ANK CANNOT BE SAID TO BE ATTRIBUTABLE TO THE ACTIVITY OF THE ASSESSEE. 8 . WE HAVE HEARD THE PARTIES AND ALSO PERUSED THE RECORD. THE MAIN PLANK OF THE ARGUMENT OF LD. COUNSEL IS THAT THE ASSESSEE SOCIETY IS ALSO PROVIDING CREDIT FACILITIES TO ITS MEMBERS IN ADDITION FOR PROVIDING OTHER SERVICES WHICH ARE NOT THE FACTS IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY LTD. (SUPRA). HE SUBMITS THAT THE INTEREST INCOME EARNED BY THE ASSESSEE IS AN OPERATIONAL INCOME AND HENCE, EVEN THOUGH THE SAME IS NOT COVERED U/S. 80P(2)(D) BUT IT IS COVERED U/S. 80P(2)(A)(I) OF THE ACT AND THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION IN RESPECT OF ENTIRE INTEREST IN COME . WE HAVE ALSO HEARD THE LD. DR. 9 . ADMITTEDLY, IN THE PRESENT CASE THE ASSESSEE HAS KEPT THE D EPOSITS WITH THE STATE BANK OF INDIA (SBI) WHICH IS A NATIONALIZED BANK AND NOT A CO - OPERATIVE BANK OR CO - OPERATIVE SOCIETY . H ENCE, IN TERMS OF SEC. 80P(2)(D) OF THE ACT , T HE SAID INTEREST INCOME IS NOT COVERED . THE PLANK OF 5 ITA NO S. 262 & 263/PN/2014, KOLHAPUR UDYAM CO - OP. SOC. LTD., KOLHAPUR ARGUMENT IS THAT THE ASSESSEE SOCIETY IS PROVIDING CREDIT FACILITIES ALSO AND HENCE, IT IS OPERATIONAL INCOME , W E FIND THAT THIS ARGUMENT IS NOT DEALT WITH BY THE LD. CIT(A). MOREOVER, THE RELEVANT MATERIAL IS ALSO NOT BEFORE US LIKE MEMORANDUM AND BYE - LAWS OF THE ASSESSEE SOCIETY, A UDITED STATEMENT OF ACCOUNT ETC. THE CONTENTION OF THE ASSESSEE IS THAT THE FUNDS PARKED WITH THE STATE BANK OF INDIA ARE OUT OF THE ACTIVITY OF THE ASSESSEE TO PROVIDE CREDIT FACILITIES. WE CONSIDER IT FIT TO RESTORE THIS ISSUE TO THE FILE OF THE LD. CI T(A) FOR FRESH ADJUDICATION IN THE LIGHT OF OUR ABOVE OBSERVATIONS. THE ASSESSEE HAS TO ESTABLISH THAT THE INTEREST INCOME EARNED FROM THE STATE BANK OF INDIA IS OUT OF THE ACTIVITY OF THE PROVIDING CREDIT FACILITIES TO ITS MEMBERS. ACCORDINGLY, GROUND N O. 1 IS ALLOWED FOR THE STATISTICAL PURPOSE. THE LD. COUNSEL SUBMITS THAT HE IS NOT PRESSING GROUND NO. 2 AS PER THE INSTRUCTIONS OF THE ASSESSEE. ACCORDINGLY, GROUND NO. 2 IS DISMISSED AS NOT PRESSED. 10 . IN THE RESULT, BOTH THE APPEALS OF THE ASSESS EE ARE PARTLY ALLOWED FOR THE STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 30 - 01 - 20 1 5 SD/ - SD/ - ( R . K . PAN DA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE , DATED : 30 TH JANUARY, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) , KOLHAPUR 4 THE CIT - I/ I I, KOLHAPUR 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR , INCOME TAX APPELLATE TRIBUNAL , PUNE