The Banas Bank Staff Credit Co.Op. Society Ltd., Palanpur V. The ACIT, B.K.Circle, Palanpur

ITA 2676/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6137 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 07-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Condonation of delay

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NOS. 2676 & 2677/AHD/2014 / ASSESSMENT YEAR: 2008-09 & 2011-12 THE BANAS BANK STAFF CREDIT CO-OP. SOCIETY LTD, HIMAT VIHAR COMPLEX, CITY LIGHT ROAD, PALANPUR (B.K.) 385 001 PAN : AAAAT 4777 G VS. THE ACIT, B.K. CIRCLE, PALANPUR (B.K.) / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVATIA, AR REVENUE BY : SHRI RAJDEEP SINGH, SR DR ! / DATE OF HEARING : 09/01/2018 / DATE OF PRONOUNCEMENT: 01/02/2018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANC E OF THE ASSESSEE AGAINST TWO SEPARATE ORDERS OF THE CIT(A)-XX, AHMED ABAD, BOTH DATED 28.04.2014, PASSED FOR ASSESSMENT YEARS 2008-09 & 2 011-12. 2. THE REGISTRY HAS POINTED OUT THAT BOTH THE APPEA LS OF THE ASSESSEE ARE TIME BARRED BY 94 DAYS. IN ORDER TO EXPLAIN THE DEL AY, THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY ALONG WITH AFFIDAVIT OF SHRI JAGDISHCHANDRA C. VAIDH. IT HAS BEEN DEPOSED IN TH E AFFIDAVIT THAT SHRI JAGDISHCHANDRA C. VAIDH IS 50 YEARS OF AGE AND HE I S THE SECRETARY-CUM- MANAGER OF THE SOCIETY. THE ORDER OF THE CIT(A) WA S SERVED UPON THE SOCIETY ON 06.05.2014; SOMEHOW, SHRI JAGDISHCHANDRA C. VAIDH HAS AN EYE ITA NOS. 2676 & 2677/AHD/2014 THE BANAS BANK STAFF CREDIT COOP SOCTY LTD VS. ACIT FOR AY: 2008-09 & 2011-12 2 PROBLEM AND HE WAS OPERATED. HE REMIND CONFINED TO BED FOR MORE THAN THREE MONTHS; THEREFORE, COULD NOT FILE THE APPEAL WITHIN THE TIME. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUB MITTED THAT A PERUSAL OF THE MEDICAL CERTIFICATE ATTACHED BY THE ASSESSEE WO ULD INDICATE THAT JUST 3-4 DAYS BEFORE THE TIME LIMIT WAS TO EXPIRE HE WENT FO R EYE TREATMENT, THERE WERE MORE THAN 50 DAYS PRIOR TO THAT IN WHICH THE A PPEALS COULD BE FILED. 3. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS PLACED ON RECOR D COPY OF THE MEDICAL CERTIFICATE ISSUED BY NETRALAYA, UNDER THE SIGNATUR E OF DR. MUDIT BANSAL, SHOWING THAT SHRI JAGDISHCHANDRA C. VAIDH CAME TO H IM FOR TREATMENT OF RETINAL DETACHMENT IN RIGHT EYE. IT WAS A MAJOR IL LNESS AND ON ACCOUNT OF ILLNESS OF THE SECRETARY, THE SOCIETY COULD NOT FIL E THE APPEAL WITHIN TIME. IN OUR OPINION, THERE CANNOT BE ANY DELIBERATE ATTEMPT AT THE END OF THE SOCIETY TO FILE THE APPEALS AFTER EXPIRY OF LIMITATION, BEC AUSE THIS STRATEGY WOULD NOT GIVE ANY BENEFIT TO THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE, WE CONDONE THE DELAY AND PROCEED TO DECIDE THE APPEALS ON MERITS. 4. THOUGH THE ASSESSEE HAS RAISED THREE GROUNDS OF APPEAL, BUT IN BRIEF, ITS GRIEVANCE IS THAT THE CIT(A) HAS ERRED IN NOT G RANTING BENEFIT OF SECTION 80P(2)(D) OF THE INCOME-TAX ACT ON THE DIVIDEND INC OME OF RS.3,04,050/- AND RS.2,02,700/- IN ASSESSMENT YEARS 2008-09 AND 2011- 12 RESPECTIVELY. 5. THE FACTS ON VITAL POINTS ARE COMMON IN BOTH THE APPEALS; THEREFORE, FOR THE FACILITY OF REFERENCE, WE ARE TAKING UP THE FACTS FROM ASSESSMENT YEAR 2008-09. THE ASSESSEE IS A CO-OPERATIVE SOCIETY, G IVING CREDIT FACILITY TO ITS MEMBERS. IT HAS FILED ITS RETURN OF INCOME ON 30.09 .2008 DECLARING NIL INCOME. SIMILARLY, IN ASSESSMENT YEAR 2011-12, IT H AS DECLARED NIL INCOME, AFTER CLAIMING DEDUCTION UNDER SECTION 80(P)(2) OF THE INCOME-TAX ACT. THE ASSESSEE HAS MADE FOLLOWING INVESTMENTS:- ITA NOS. 2676 & 2677/AHD/2014 THE BANAS BANK STAFF CREDIT COOP SOCTY LTD VS. ACIT FOR AY: 2008-09 & 2011-12 3 AY 2008-09 AY 2011-12 INVESTMENT & DEPOSIT B.D.C.C. BANK SHARE 45000.00 45000.00 B.K. DIST. OIL SHARE 10025.00 10000.00 IFFCO SHARE 1000100.00 1000000.00 KRIBHACO SHARE 500100.00 500000.00 IT HAS SHOWN FOLLOWING DIVIDEND INCOME:- AY 2008-09 AY 2011-12 DIVIDEND INCOME FROM BANAS BANK SHARE 4050.00 2700.00 FROM IFFCO 200000.00 200000.00 FROM KRUSHCO 100000.00 100000.00 6. ACCORDING TO THE ASSESSEE, THESE DIVIDENDS INCOM E QUALIFY FOR DEDUCTION UNDER SUB-CLAUSE (D) OF SECTION 80P(2) OF THE INCOME-TAX ACT; BUT, LEARNED ASSESSING OFFICER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE. 7. ON APPEAL, LEARNED CIT(A) HAS CONFIRMED THE DISA LLOWANCE BY OBSERVING AS UNDER:- 3.13. WITH REGARD TO GROUND NO.2, THE AO HAS ALSO DENIED THE CLAIM OF DEDUCTION U/S.80P(2)(D) OF THE ACT AMOUNTING TO RS. 3,04,050/- STATING THAT THE INCOME IN THE NATURE OF INTEREST/DIVIDEND WAS D ERIVED FROM CO-OPERATIVE BANK I.E. BANAS BANK ETC. WHICH WAS NOT ADMISSIBLE FOR THE DEDUCTION U/S.80P(2)(D) OF THE ACT AS THE BANAS BANK WAS NOT A CO-OPERATIVE SOCIETY. IT IS WORTH HERE TO MENTION THAT AS PER THE AFORESAID PROVISIONS THE INCOME IS EXEMPT ONLY WHEN THE SAME HAS BEEN DERIVED FROM ITS INVESTMENTS WITH ANY OTHER CO-OPERATIVE SOCIETIES. NOW IN THE INSTANT CA SE BANAS BANK CANNOT BE SAID TO BE A CO-OPERATIVE SOCIETY AS AFTER THE INSE RTION OF SECTION 80P(4) CO- OPERATIVE BANKS HAVE BEEN SEPARATELY DEFINED FROM C O-OPERATIVE SOCIETIES. THE CO-OPERATIVE SOCIETIES HAD THEIR ACTIVITIES ONLY WI TH THEIR MEMBERS WHILE THE BANK HAS ITS OPERATIONS WITH PUBLIC AT LARGE. FURTH ER, THE BANKS ARE GOVERNED BY THE PROVISIONS OF BANKING REGULATION ACT, 1949 W HILE THE AFORESAID ACT DOES NOT APPLY OVER THE CO-OPERATIVE SOCIETIES. SO, AO'S STAND WITH REGARD TO CO-OPERATIVE SOCIETIES NOT AT PAR WITH THE CO-OPERA TIVE BANK IS CORRECT AND JUSTIFIED AND THUS THE APPELLANT IS NOT ENTITLED TO GET THE DEDUCTION U/S.80P(2)(D) OF THE ACT ON THE AFORESAID INTEREST/ DIVIDEND INCOME. MOREOVER, THE FINDINGS OF HON'BLE ITAT IN THE CASE OF JAFARI MOMIN VIKAS CO-OP. ITA NOS. 2676 & 2677/AHD/2014 THE BANAS BANK STAFF CREDIT COOP SOCTY LTD VS. ACIT FOR AY: 2008-09 & 2011-12 4 CREDIT SOCIETY LTD. OVER THIS ISSUE IS FACT SPECIFI C AND COULD NOT BE APPLIED OVER THE FACTS OF THE PRESENT CASE AS THE APPELLANT HAS NOT DEMONSTRATED THAT FACTS OF BOTH THE CASES WERE IDENTICAL. 8. THE RELEVANT CLAUSES OF SECTION 80P OF THE ACT R EAD AS UNDER:- 80P. (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A CO-OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT T O THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUB-SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL B E THE FOLLOWING, NAMELY : (A) IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED I N XXX XXX (D) IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY THE CO-OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO-OPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME; 9. A PERUSAL OF THE ABOVE WOULD INDICATE THAT A CO- OPERATIVE SOCIETY, ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILIT Y TO ITS MEMBERS, IS ENTITLED FOR DEDUCTION UNDER SECTION 80P(2)(D) IN R ESPECT OF ANY INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY IT FROM ITS INVESTMENTS WITH ANY OTHER CO-OPERATIVE SOCIETY. IN CASE OF THE ASSESSE E, THIS DEDUCTION WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND T HAT, AS PER SUB-CLAUSE (4) OF SECTION 80P OF THE ACT, THE INSTITUTIONS WHE RE THE ASSESSEE MADE INVESTMENTS WERE NOT CO-OPERATIVE SOCIETIES, RATHER THEY WERE CO-OPERATIVE BANKS. THE CONTENTION OF THE LEARNED COUNSEL FOR T HE ASSESSEE WAS THAT INHERENTLY ALL THESE BANKS WERE CO-OPERATIVES SOCIE TIES AND THEY WERE ENGAGED IN THE BANKING BUSINESS; THEREFORE, IN THEI R CASES THEY MIGHT NOT BE ENTITLED FOR DEDUCTION UNDER SECTION 80P(2), BUT DI VIDEND INCOME FROM INVESTMENTS WITH THEM WOULD QUALIFY FOR GRANT OF DE DUCTION UNDER SECTION 80P(2) IN THE HANDS OF THE CO-OPERATIVE SOCIETY WHI CH IS OTHERWISE ELIGIBLE. SINCE BOTH THE AUTHORITIES HAVE NOT SEEN THE MEMORA NDUM OF ASSOCIATION OR ANY OTHER EVIDENCE IN RESPECT OF THE INSTITUTIONS W HERE THE INVESTMENTS WERE MADE; THEREFORE, WE DEEM IT APPROPRIATE TO SET ASID E THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL DECIDE THE STATUS OF THE ITA NOS. 2676 & 2677/AHD/2014 THE BANAS BANK STAFF CREDIT COOP SOCTY LTD VS. ACIT FOR AY: 2008-09 & 2011-12 5 INSTITUTIONS WHERE THE INVESTMENTS WERE MADE BY THE ASSESSEE. IF THEY WERE FOUND TO BE CO-OPERATIVE SOCIETIES, THEN DEDUCTION AS PER SECTION 80P(2)(D) WOULD BE GRANTED; OTHERWISE, HE WILL DECIDE THE ISS UE IN ACCORDANCE WITH LAW. 10. WITH ABOVE OBSERVATIONS, BOTH APPEALS OF THE AS SESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 1 ST FEBRUARY, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/02/2018 BIJU T., SR.PS ! &'( )( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD