ITO Ward 2(1), Salem V. S-1235 Udayapatti PACCS Ltd., Salem

ITA 2776/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5238 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 20-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M BALUC A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . , BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER I.T.A.NO.2774/CHNY/2017 ASSESSMENT YEAR : 2014-15 & ASSESSMENT YEAR : 2012-13 THE INCOME TAX OFFICER, NO.138/3,LMR SHOPPING ARCADE, SALEM ROAD, NAMAKKAL 637 001. VS. M/S. S 748 VARGOORAMPATTY, PACCS LTD , VARAGOORAMPATTY,ANIMOOR, TIRUCHENGODE TK, NAMAKKAL 637 214. [PAN AAGAS 4396 A] ( !' / APPELLANT) ( #$!' /RESPONDENT) I.T.A.NO.2776/CHNY/2017 ASSESSMENT YEAR : 2012-13 THE INCOME TAX OFFICER, WARD-2(1), SALEM. VS. M/S. S 1235 UDAYAPATTI, PACCS LTD , UDAYAMPATTI P.O. SALEML 636 140. [PAN AAFAS 8771 G] ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : MR.B.SAGADEVAN,JCIT,D.R /RESPONDENT BY : MR.M.BALU,C.A / DATE OF HEARING : 05 - 0 4 - 201 8 / DATE OF PRONOUNCEMENT : 09 - 0 4 - 201 8 % / O R D E R ITA NOS.2772,2774/CHNY/2017 :- 2 -: PER ABRAHAM P GEORGE, ACCOUNTANT MEMBER THESE TWO APPEALS FILED BY THE DEPARTMENT ARE DI RECTED AGAINST ORDERS DATED 31.08.2017 & 27.09.2017 OF THE COMMISSIONER OF INCOME-TAX (APPEALS), SALEM-7. 2. GROUNDS TAKEN BY THE REVENUE IN BOTH THESE APP EALS ASSAIL THAT THE DIRECTION OF THE LD.CIT(A) TO ALLOW THE CL AIM OF ASSESSEE FOR DEDUCTION U/S.80P(2)(A)(I) OF THE ACT. 3. LD. COUNSEL FOR THE REVENUE SUBMITTED THAT BOTH THE ASSESSEES HAD NOMINAL MEMBERS, IN ADDITION TO ITS SHAREHOLDING MEMBERS. ACCORDING TO LD.D.R, THE HONBLE APEX COU RT IN THE CASE OF CITIZENS CO-OPERATIVE SOCIETY VS. ACIT ( (2017) 39 7 ITR 1 HAD CLEARLY HELD THAT DEDUCTION U/S.80P(2)(A)(I) OF THE ACT COU LD NOT BE ALLOWED TO A SOCIETY, WHICH WAS EARNING INTEREST FROM ASSOCIAT E MEMBERS. AS PER THE LD.D.R, RESIDENT MEMBERS AND NOMINAL MEMBERS OF THE ASSESSEES HERE WERE VERY SIMILAR TO THE ASSOCIATE MEMBER, AND THEREFORE, BY VIRTUE OF THE DECISION OF APEX COURT MENTIONED SUPR A, DEDUCTION U/S.80P(2)(A)(I) OF THE ACT COULD NOT BE GIVEN TO T HE ASSESSEES. CONTENTION OF LD.D.R WAS THAT LD.CIT(A) HAD RELIED ON CERTAIN DECISIONS OF THE TRIBUNAL IN THE CASE OF KARKUDALPATTY PRIMAR Y AGRICULTURAL CO- OPERATIVE CREDIT SOCIETY LTD., VS.ITO (ITA NO.292/M DS./2014 DATED ITA NOS.2772,2774/CHNY/2017 :- 3 -: 17.03.2014) AND THAT OF I.T.O VS. S-1308 AMMAPET PR IMARY AGRICULTURAL CO-OPERATIVE BANK LTD.,SALEM (ITA NO.8 25/MDS./2017, DATED 23.09.2015) FOR GIVING RELIEF TO THE ASSESSEE . AS PER THE LD.D.R, IN VIEW OF THE JUDGEMENT OF HONBLE APEX COURT IN T HE CASE OF THE CITIZENS CO-OPERATIVE SOCIETY (SUPRA), THESE DECIS IONS OF ABOVE TRIBUNAL WERE NO MORE GOOD LAW. 4. PER CONTRA, LD.A.R STRONGLY SUPPORTING THE ORDE RS OF THE LD.CIT(A) SUBMITTED THAT BOTH THE ASSESSEES SOCIETI ES WERE REGISTERED UNDER TAMIL NADU CO-OPERATIVE SOCIETIES ACT, 1983 A ND THERE WAS NO DISTINCTION BETWEEN A MEMBER AND ASSOCIATE MEMBER U NDER THE SAID ACT. ACCORDING TO HIM, ORDER OF HONBLE APEX COURT IN THE CASE OF THE CITIZENS CO-OPERATIVE SOCIETY (SUPRA) HAD CONSIDER ED THE CATEGORIES OF MEMBERSHIP AS PER MAHARASTRA CO-OPERATIVE SOCIETY A CT (MACSA). CONTENTION OF LD.A.R WAS THAT BOTH THE ASSESSEES HA VING BEEN REGISTERED UNDER TAMIL NADU CO-OPERATIVE SOCIETIES ACT, 1983, THE JUDGEMENT OF HONBLE APEX COURT IN THE CASE OF THE CITIZENS CO- OPERATIVE SOCIETY (SUPRA) HAD NO APPLICABILITY. 5. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW. THE QUESTION WHETHER THE DEDUCTION U/S.80P(2)(A)(I) OF THE ACT C OULD BE GIVEN TO A ITA NOS.2772,2774/CHNY/2017 :- 4 -: SOCIETY, WHICH WAS HAVING BUSINESS WITH BOTH REGUL AR MEMBERS AS WELL AS ASSOCIATE MEMBERS HAD COME UP BEFORE THE HO NBLE APEX COURT IN THE CASE OF THE CITIZENS CO-OPERATIVE SOCIETY(S UPRA). HONBLE APEX COURT HAD CLEARLY HELD THAT SUCH DEDUCTION WOULD NO T BE AVAILABLE TO A SOCIETY WHERE IT HAD BUSINESS WITH NOMINAL MEMBERS, WHO WERE NOT SHARE HOLDER MEMBER IN THE REAL SENSE. NOW THE ARGU MENT TAKEN BY THE LD.A.R BEFORE ME IS THAT JUDGEMENT OF HONBLE A PEX COURT IN THE CASE OF THE CITIZENS CO-OPERATIVE SOCIETY (SUPRA) WAS IN RELATION TO MACSA WHEREAS THE ASSESSEES HERE WERE REGISTERED UN DER TAMIL NADU CO-OPERATIVE SOCIETIES ACT, 1983. BE THAT AS IT MAY , THE JUDGEMENT OF HONBLE APEX COURT IN THE CASE OF THE CITIZENS CO- OPERATIVE SOCIETY(SUPRA) WAS NOT AVAILABLE WITH THE LOWER AUT HORITIES, WHEN THEY CONSIDERED THE QUESTION WHETHER THE ASSESSEES WERE ELIGIBLE FOR CLAIMING EXEMPTION U/S.80P(2)(A)(I) OF THE ACT. RE CORDS MADE AVAILABLE BEFORE ME IS NOT ADEQUATE ENOUGH TO DECID E WHETHER THE PROVISIONS UNDER MACSA AND PROVISIONS UNDER TAMIL N ADU CO-OPERATIVE SOCIETIES ACT, 1983 IN RELATION TO VARIOUS CATEGORI ES OF MEMBERS ARE PARI-MATERIA OR ENTIRELY DIFFERENT. I AM THEREFORE, OF THE OPINION THAT THE QUESTION WHETHER ASSESSEE WAS ELIGIBLE FOR CLAI MING DEDUCTION U/S.80P(2)(A)(I) OF THE ACT, REQUIRES A RE-VISIT BY THE LD. ASSESSING OFFICER. I SET ASIDE THE ORDERS OF THE LOWER AUTHOR ITIES AND REMIT THE ITA NOS.2772,2774/CHNY/2017 :- 5 -: ISSUE BACK TO THE FILE OF THE LD. ASSESSING OFFICER FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 09 TH APRIL, 2018, AT CHENNAI. SD/- ( ! ' # ( ABRAHAM P GEORGE) / ACCOUNTANT MEMBER $% / CHENNAI &'( / DATED: 09 TH APRIL, 2018. K S SUNDARAM )'*++,-.+/. / COPY TO: + 1 . / APPELLANT 3. ) +) 0+1# / CIT(A) 5. .23+,,45 / DR 2. / RESPONDENT 4. ) +) 0 / CIT 6. 36'+7 / GF