M/s Shree Siddeshwara Souhardha Credit Co-operative Ltd, Bengaluru V. Income Tax Officer, Ward-7(2)(2), Bengaluru

ITA 2827/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4857 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 22-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURUPRASAD
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 2827 / BANG/201 7 ASSESSMENT YEAR : 20 1 3 - 14 M/S. SHREE SIDDESHWARA SOUHARDA CREDIT CO-OPERATIVE LTD., NO. 2, JANAKA PRASAD, 2 ND CROSS, LALBAGH ROAD, CKC GARDEN, BANGALORE 560 027. PAN: AAFAS2584R VS. THE INCOME TAX OFFICER, WARD 7 (2) (2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI M.DEVRAJU, VICE-PRESIDENT OF ASSESSEE COMPANY RESPONDENT BY : SHRI GURUPRASAD, ADDL. CIT (DR) DATE OF HEARING : 11 .04.2018 DATE OF PRONOUNCEMENT : 13 .04.2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A)-7, BANGALORE DATED 01.09.2017FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED ASSESSING OFFICER IS NO T JUSTIFIED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED I N DENYING THE DEDUCTION BY SAYING 'SECTION 80P (4) IS TAKING AWAY , EFFECTIVELY THE PRIVILEGE GIVEN U/S 80P (2) (A) (I) FOR OTHER CO-OP ERATIVE SOCIETIES AND BANKS'. 3. THE LEARNED ASSESSING OFFICER HAS MISINTERPRETED THE SECTION 80P (4) WHERE IT CLEARLY SAYS THAT THE PROVISIONS OF SE CTION 80P DONT APPLY TO ANY CO-OPERATIVE BANK. WE ARE REGISTERED UNDER T HE SOCIETIES ACT AND NOT GOVERNED BY THE BANKING REGULATION ACT. THE REFORE, THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN NOT A LLOWING DEDUCTION U/S 80P(1)(A) DESPITE SPECIFIC PLEA MADE BY THE APP ELLANT IN THIS ITA NO.2827/BANG/2017 PAGE 2 OF 4 REGARD. 4. THE LEARNED CIT(A) HAS ERRED IN CONSIDERING THE FACTS OF DECISION OF THE HONOURABLE SUPREME COURT IN THE CASE OF THE CITIZEN CO- OPERATIVE SOCIETY LTD CIVIL APPEAL NO 10245 OF 2017 , WHERE IT WAS HELD THAT ANY INCOME THAT THE APPELLANT HAS BEEN DE NIED THE BENEFIT OF 80P(2)(A)(I) ON THE GROUNDS THAT IT MOSTLY COLLECTE D DEPOSITS FROM THE NOMINAL MEMBERS AND LENT LOAN TO NOMINAL MEMBERS. T HE APPELLANT CANNOT BE TREATED AS CO-OPERATIVE SOCIETY MEANT ONL Y FOR ITS MEMBERS AND PROVIDING CREDIT FACILITIES TO ITS MEMBERS'. IN OUR CASE, APPELLANT IS ACCEPTING DEPOSITS AND PROVIDING LOANS ONLY TO M EMBERS. THEREFORE, THE ABOVE JUDGMENT OF SUPREME COURT DOES NOT HOLD G OOD IN THE CASE OF APPELLANT. 5. THE LEARNED ASSESSING OFFICER HAS NOT CONSIDERED THE FACTS OF KARNATAKA HIGH COURT JUDGMENT IN THE CASE OF CIT VS SRI BILURE GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITA, QUOTIN G THAT THE CASE HAS NOT REACHED FINALITY AS IT IS PENDING BEFORE HO N'BLE SUPREME COURT. DECISION OF KARNATAKA HIGH COURT IS BINDING IRRESPECTIVE OF INTERPRETATION OF THE LEARNED ASSESSING OFFICER. ON THE BASIS OF ABOVE GROUNDS AND OTHER GROUNDS WHI CH MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER PASSED UNDER SECTION 143(3) BE QUASHED AND RELIEF SOUGHT BE GRANTED. 3. THIS APPEAL WAS FIXED FOR HEARING FIRST TIME ON 12.02.2018 BUT SINCE THE BENCH DID NOT FUNCTION ON THAT DATE, HEARING WAS ADJOURNE D TO 05.03.2018 AND THE NOTICE OF HEARING WAS ISSUED TO ASSESSEE AND ON THI S DATE ALSO I.E. ON 05.03.2018, THE BENCH DID NOT FUNCTION AND AGAIN HE ARING WAS ADJOURNED TO 21.03.2018 AND THE NOTICE WAS ALSO ISSUED. ON 21.0 3.2018, THE HEARING WAS ADJOURNED TO 22.03.2018 AND ON THIS DATE, THE HEARI NG WAS AGAIN ADJOURNED TO 11.04.2018 ON THE REQUEST OF LD. AR OF ASSESSEE. O N THIS DATE I.E. 11.04.2018, AN APPLICATION WAS MOVED FOR SEEKING ADJOURNMENT AN D IN THE SAID APPLICATION, IT WAS STATED THAT THE CHIEF EXECUTIVE SHRI L. NAGA RAJU WHO IS REPRESENTING THE ASSESSEES CASE IS OUT OF STATION AND THEREFORE, HE ARING MAY BE ADJOURNED. SINCE THE DATE OF HEARING WAS GIVEN AFTER THE CONSE NT OF SHRI L. NAGARAJU ON 22.03.2018 AND IT IS NOT SHOWN TO THE BENCH THAT TH ERE WAS A COMPELLING REASON WHICH HAS ARISEN AFTER 22.03.2018 FOR THE LD. AR OF ASSESSEE TO GO OUT OF STATION, THE REQUEST FOR ADJOURNMENT WAS REJECTED A ND THE APPEAL WAS HEARD. SHRI M. DEVARAJU, VICE PRESIDENT OF THE ASSESSEE SO CIETY APPEARED AND ARGUED THE APPEAL. HE REITERATED THE SAME CONTENTIONS WHI CH WERE RAISED BEFORE THE ITA NO.2827/BANG/2017 PAGE 3 OF 4 AUTHORITIES BELOW. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 4. AT THIS JUNCTURE THE BENCH ASKED THE LD. DR OF R EVENUE TO SHOW THAT WHAT IS THE BASIS OF THE AOS ALLEGATION THAT ASSESSEE IS A CO- OPERATIVE BANK AND WHETHER ANY BASIS IS INDICATED BY AO FOR ALLEGING SO AND WH ETHER IT HAS BEEN STATED BY THE AO IN THE ASSESSMENT ORDER THAT THE ASSESSEE IS REGISTERED WITH RBI UNDER BANKING REGULATIONS ACT. THE BENCH ALSO WANTED THE LD. DR OF REVENUE TO SHOW THAT BEFORE FOLLOWING THE LATEST JUDGMENT OF H ONBLE APEX COURT RENDERED IN THE CASE OFTHE CITIZEN CO-OPERATIVE SOCIETY LTD. VS. ACIT AS REPORTED IN 397 ITR 1 BY CIT(A), HE HAS COMPARED THE FACTS OF THE P RESENT CASE WITH THE FACTS OF THAT CASE. IN REPLY, THE LD. DR OF REVENUE COUL D NOT SATISFY THE BENCH ON BOTH THESE ASPECTS. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE FACTS OF THE PRESENT CASE AS NOTED ABOVE AND IN VIEW OF THESE FACTS OF THE PRESE NT CASE, I FEEL IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF AO FOR FRESH DECISION WITH THE DIRECTION THAT THE AO SHOULD PASS A SPEAKING AND REASONED ORDER AN D IF IT IS STILL THE ALLEGATION OF THE AO THAT ASSESSEE IS A CO-OPERATIV E BANK THEN HE SHOULD INDICATE THE BASIS FOR ALLEGING SO AND HE HAS TO GI VE A CATEGORICAL FINDING THAT WHETHER ASSESSEE IS REGISTERED WITH RBI UNDER BANKI NG REGULATIONS ACT IF AO WANTS TO APPLY AND FOLLOW THE JUDGMENT OF HONBLE A PEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. VS. A CIT (SUPRA), THEN HE SHOULD COMPARE THE FACTS OF THE PRESENT CASE WITH THE FACT S OF THAT CASE AND THEN DECIDE THE ISSUE BY WAY OF A SPEAKING AND REASONED ORDER AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO ASSESSEE. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR REGARDING THE MERIT OF T HE CASE AT THE PRESENT STAGE AND HENCE, I DO NOT MAKE ANY COMMENT ON THE MERIT O F THE CASE. ITA NO.2827/BANG/2017 PAGE 4 OF 4 6. 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/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 13 TH APRIL, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.