Appeal details
Counselvise Citation
[2016] 132 COUNSELVISE.COM (IT) 8471 (ITAT-COCHIN)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 1 month(s) 10 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-06-2016
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
28-06-2016
Assessment Year
2009-2010
Appeal Filed On
18-05-2015
Judgement Text
ITA 581 & OTHERS (7 APPEALS) 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN (SMC) BEFORE SHRI B P JAIN , ACCOUNTANT MEMBER ITA NO 581/COCH/2014 (A SST YEAR 2009 - 10 ) MEPPAYUR SERVICE COOP BAN K LTD MEPPAYUR POST KOZHIKODE 673 524 PAN NO. AACAM3219J VS INCOME TAX OFFICE WARD 2(1) CALICUT ( APPELLANT) (RESPONDENT) ASSESSEE BY NONE REVENUE BY SHRI A DHANARAJ, SR DR DATE OF HEARING 28 TH JUNE 2016 DATE OF PRONOUNCEMENT 28 TH JUNE 2016 ITA NO 55 /COCH/201 5 (A SST YEAR 2010 - 11 ) CHERTHALA SOUTH SERVICE COOP BANK L TD NO.1344 CHERTHALA SOUTH PO CHERTHALA ALAPPUZHA 688524 PAN NO.AAAAC1385R VS THE INCOME TAX OFFICER WARD 1 ALAPPUZHA ( APPELLANT) (RESPONDENT) ASSESSEE BY MR KRISHNA KUMAR, A REVENUE BY SHRI A DHANARAJ, SR DR DATE OF HEARING 28 TH JUNE 2016 DATE OF PRONOUNCEMENT 28 TH JUNE 2016 ITA NO 268 /COCH/201 6 (A SST YEAR 2008 - 09 ) OORUTTAMBALAM SER COOP BANK LTD OORUTTAMBALAM TRIVANDRU M PAN NO. AAAA01130G VS INCOME TAX OFFICER WARD 2 (3), TRIVANDRUM ( APPELLANT) (RESPONDENT) ITA 581 & OTHERS (7 APPEALS) 2 ASSESSEE BY H ARUN RAJ S. REVENUE BY SHRI A DHANARAJ, SR DR DATE OF HEARING 28 TH JUNE 2016 DATE OF PRONOUNCEMENT 28 TH JUNE 2016 ITA N O S. 285 & 286/COCH/2015 (A SST YEAR S 2008 - 09 & 09 - 10 ) CH EMANCHERY SERVICE COOPERATIVE BANK L T D P OST - CHEMANCHERRY KOYILANDY TALUK KOZHIKODE 673 304 PAN AACAT2189A VS THE INCOME TAX OFFICER WARD 2(1), KOZHIKODE ( APPELLANT) (RESPONDENT) ASSESSEE BY SRI A S NARAYANAMOORTHY REVENUE BY SHRI A DHANARAJ, SR DR DATE OF HEARING 28 TH JUNE 2016 DATE OF PRONOUNCEMENT 28 TH JUNE 2016 ITA NO S. 332 & 333 /COCH/201 5 (A SST YEAR S 2008 - 09 & 09 - 10 ) M/S ATHOLY SERVICE COOP BANK LTD ATHOLY CALIC UT - 673 315 PAN AACAA2851J VS THE INCOME TAX OFFICER WARD 2(1), KOZHIKODE ( APPELLANT) (RESPONDENT) ASSESSEE BY SH CBM WA RRIER REVENUE BY SHRI A DHANARAJ, SR DR DATE OF HEARING 28 TH JUNE 2016 DATE OF PRONOUNCEMENT 28 TH JUNE 2016 ORDER PER B P JAIN, AM : THESE ARE 7 APPEALS FILED BY DIFFERENT ASSESSEES ARISE OUT OF THE SEPARATE ORDERS OF THE CIT(A) AS PER THE DETAILS GIVEN UNDER: ITA 581 & OTHERS (7 APPEALS) 3 SL.NO. ITA NO. NAME OF THE ASSESSEE CIT(A)S ORDER DATE 1 581/COCH/2014 MEPPAYUR SERVICE COOP BAN K LTD 30.09.2014 2 55/ COCH/201 5 CHERTHALA SOUTH SERVICE COOP BANK 21.10.2014 3 268/COCH/2016 OORUTTAMBALAM SER COOP BANK LTD 30.12.2015 4 - 5 285 & 286 /COCH/201 5 CH EMANCHERY SERVICE COOPERATIVE BANK L T D 0 5.02.1015 6 - 7 332 & 333/COCH/2015 M/S ATHOLY SERVICE COOP BANK LTD 05.02.2015 2 SINCE COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS; THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. 2.1 IN THE CASE OF MEPPAYUR SERVICE COOPERATIVE BA N K LTD, IN ITA NO. 581/COCH/2014 NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER , I PROCEED TO DISPOSE OFF THE SAME EXPARTE AFTER HEARING THE LD DR AND CONSIDERING THE MATERIAL AVAILABLE ON RECORD. 3 THE SOLITARY ISSUE THAT WAS ARGUED IS WHETHER THE CIT(A) IS JUSTIFIED IN CONFIR MING THE ACTION OF THE AO IN DENYING THE DEDUCTION U/S 80P(2) OF THE ACT. 4 BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS: ITA 581 & OTHERS (7 APPEALS) 4 THE ASSESSEE, IN ALL THESE APPEALS, IS A PRIMARY AGRICULTURAL CREDIT SOCIETY REGISTERED UNDER THE KERALA COOPERATIVE SOCIETIE S ACT, 1969. IT IS ENGAGED IN THE BUSINESS OF PROVIDING AGRICULTURAL CREDIT TO ITS MEMBERS. THE CLAIM OF DEDUCTION U/S 80P (2) WAS DENIED BY THE AO FOR THE REASON THAT THE ASSESSEE IS PRIMARILY ENGAGED IN THE BUSINESS OF BANKING AND IN VIEW OF SECTION 80P( 4) OF THE ACT, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80P(2) OF THE ACT. THE VIEW TAKEN BY THE AO WAS CONFIRMED BY THE CIT(A). 5 THE ASSESSEE BEING AGGRIEVED IS IN APPEAL BEFORE THIS TRIBUNAL. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE RECENT JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE CHIRAKKAL SERVICE COOPERATIVE BANK LTD & OTHERS IN ITA NO.212 OF 2013 ( JUDGMENT DATED 15 TH FEBRUARY 2016). 5.1 THE LD DR W AS UNABLE TO CONTROVERT THE ABOVE SUBMISSIONS OF THE ASSESSEE. 6 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD.. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE CHIRAKKAL SERVICE COOPERATIVE BANK LTD & OTHERS (SUPRA) HAS H ELD THAT THE PRIMARY AGRICULTURAL CREDIT SOCIETY REGISTERED UNDER THE KERALA COOPERATIVE SOCIETIES ACT, 1969 IS ENTITLED TO THE BENEFIT OF DEDUCTION U/S 80P(2). THE HONBLE HIGH COURT WAS CONSIDERING THE FOLLOWING SUBSTANTIAL QUESTION OF LAW: ITA 581 & OTHERS (7 APPEALS) 5 A) WHETHER O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE UNDER CONSIDERATION, THE TRIBUNAL IS CORRECT IN LAW IN DECIDING AGAINST THE ASSESSEE, THE ISSUE REGARDING ENTITLEMENT FOR EXEMPTION UNDER SECTION 80P, IGNORING THE FACT THAT THE ASSESSEE IS A PRIMARY AGRICUL TURAL CREDIT SOCIETY? 6.1 IN CONSIDERING THE ABOVE QUESTION OF LAW, THE HONBLE HIGH COURT RENDERED THE FOLLOWING FINDINGS: 15. APPELLANTS IN THESE DIFFERENT APPEALS ARE INDISPUTABLY SOCIETIES REGISTERED UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT, 1969, FOR SORT, KCS ACT AND THE BYE - LAWS OF EACH OF THEM, AS MADE AVAILABLE TO THIS COURT AS PART OF THE PAPER BOOKS, CLEARLY SHOW THAT THEY HAVE BEEN CLASSIFIED AS PRIMARY AGRICULTURAL CREDIT SOCIETIES BY THE COMPETENT AUTHORITY UNDER THE PROVISIONS OF THAT AC T. THE PARLIAMENT, HAVING DEFINED THE TERM 'CO - OPERATI VE SOCIETY' FOR THE PURPOSES OF THE BR ACT WI TH REFERENCE TO, AMONG OTHER THINGS, THE REGISTRATION OF A SOCIETY U N DER ANY STATE LAW RELATING TO CO - OPERATIVE SOCIETIES FOR THE TIME BEING; IT CANNOT BUT BE TAKEN THAT THE PURPOSE OF THE SOCIETIES SO REGISTERED UNDER THE STATE LAW AND ITS OBJECTS HAVE TO BE UNDERSTOOD AS THOSE WHICH HAVE BEEN APPROVED BY THE COMPETENT AUTHORITY UNDER SUCH STATE LAW. THIS, WE VISUALISE AS DUE RECIPROCATIVE LEGISLATIVE EXERCI SE BY THE PARLIAMENT RECOGN I SING THE PREDOMINANCE OF DECISIONS RENDERED UNDER THE RELEVANT STATE LAW. IN TH I S VIEW OF THE MATTER, ALL THE APPELLANTS HAV I NG BEEN CLASSIFIED AS PRIMARY AGRICULTURAL CRED I T SOC I ET I ES B Y THE COMPETENT AUTHOR I TY UNDE R TH E KCS A CT , I T HAS NECESSAR IL Y TO BE HELD THAT THE PRINCIPAL OBJECT OF SUCH SOCIETIES IS TO UNDERTAKE AGR I CULTURAL CREDIT ACTIVITIES AND TO PROVIDE LOANS AND ADVANCES FOR AGRICULTURAL PURPOSES , THE RATE ' OF INTEREST ON SUCH LOANS AND ADVANCES TO BE AT THE RATE FI XED BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES UNDER THE KCS ACT AND HAV I NG I TS AREA OF OPERATION CONFINED TO A VILLAGE, PANCHAYAT OR A MUNICIPALITY. THIS IS THE CONSEQUENCE OF THE DEFINITION CLAUSE IN SECTION 2(OAA) OF THE KCS ACT. THE AUTHORITIES UNDER THE IT ACT CANNOT PROBE INTO ANY ISSUE OR SUCH MATTER RELATING TO SUCH APPLICANTS. 16. THE POSITION OF 1 AW BEING AS ABOVE WITH REFERENCE TO THE STATUTORY PROVISIONS, THE APPELLANTS HAD SHOWN TO THE AUTHORITIES AND THE TRIBUNAL THAT THEY ARE PRIMARY AGRICU LTURA L CREDIT SOCIETIES IN TERMS OF CLAUSE (CCIV) OF SECTION 5 OF THE BR ACT, HAVING REGARD TO THE PRIMARY OBJECT OR PRINCIPAL BUSINESS OF EACH OF THE APPELLANTS. IT IS ITA 581 & OTHERS (7 APPEALS) 6 ALSO CLEAR FROM THE MATERIALS ON RECORD THAT THE BYE - LAWS OF EACH OF THE APPELLANTS DO . NOT PERMIT ADMISSION OF ANY OTHER CO - OPERATIVE SOCIETY AS MEMBER, EXCEPT MAY BE, IN ACCORDANCE WITH THE PROVISO TO SUB - CLAUSE 2 OF SECTION 5(CCIV) OF THE BR ACT. THE DIFFERENT ORDERS OF THE TRIBUNAL WHICH ARE IMPEACHED IN THESE APPEALS DO NOT CONTAIN ANY FINDING OF FACT TO THE EFFECT THAT THE BYE - 1AWS OF ANY OF THE APPELLANT OR ITS CLASS I FICATION BY THE COMPETENT AUTHORITY UNDER THE KCS ACT LS ANYTHING DIFFERENT FROM WHAT WE HAVE STATED HEREIN ABOVE. FOR THIS REASON, IT CANNOT BUT BE HELD THAT THE APPEL LANTS ARE ENTITLED TO EXEMPTION FROM THE PROVISIONS OF SECTION 80P OF THE IT ACT BY VIRTUE OF SUB - SECTION 4 OF THAT SECT; ON. IN THIS VIEW OF THE MATTER, THE APPEALS SUCCEED. 17. IN THE LIGHT OF THE AFORESAID, WE ANSWER SUBSTANTIA 1 QUESTION 'A' IN FAVOU R OF THE APPELLANTS AND HOLD THAT THE TRIBUNAL ERRED IN LAW IN DECIDING THE ISSUE REGARDING THE ENTITLEMENT OF EXEMPT ION UNDER SECTION 80P AGAINST THE APPELLANTS. WE HOLD THAT THE PRIMARY AGRICULTURAL CREDIT SOCIETIES, REGISTERED AS SUCH UNDER THE KCS ACT; AND CLASSIFIED SO, UNDER THAT ACT, INCLUDING THE APPELLANTS ARE ENTITLED TO SUCH EXEMPTION. 6.2 IN ALL THESE CASES BEFORE ME, THE CERTIFICATE OF REGISTRATION OF ALL THESE ASSESSEES, UNDER THE KERALA COOPERATIVE SOCIETIES ACT AND THE BYE - LAWS, ARE PL ACED ON RECORD. IT IS CLEAR FROM THE PERUSAL OF THE SAME THAT THE ASSESSEE IN ALL THESE APPEALS ARE PRIMARY AGRICULTURAL CREDIT SOCIETIES AND PROVIDING AGRICULTURAL CREDIT FACILITIES TO ITS MEMBERS. THE HONBLE JURISDICTIONAL HIGH COURT, IN THE ABOVE CITED JUDGMENT HAS HELD THAT SUCH SOCIETIES ARE ENTITLED TO THE BENEFIT OF DEDUCTION U/S 80P(2) OF THE ACT. IN VIEW OF THE ABOVE FINDINGS OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA), I ALLOW THE APPEALS OF ALL THESE ASSESSEE. IT IS ORDERED ACCORDINGLY. ITA 581 & OTHERS (7 APPEALS) 7 7 IN THE RESULT, THE APPEALS FILED BY ALL THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH DAY OF JUNE 2016 SD/ - ( B P JAIN ) ACCOUNTANT MEMBER COCHIN: DATED 28 TH , JUNE 201 6 RAJ* COPY TO: 1 . APPELLANT 1) MEPPAYUR SERVICE COOP BAN K LTD MEPPAYUR POST KOZHIKODE 673 524 2) CHERTHALA SOUTH SERVICE COOP BANK L TD NO.1344 CHERTHALA SOUTH PO CHERTHALA ALAPPUZHA 688524 3) OORUTTAMBALAM SER COOP BANK LTD OORUTTAMBALAM TRIVANDRU M 4) CH EMANCHERY SERVICE COOPERATIVE BANK L T D P OST - CHEMANCHERRY KOYILANDY TALUK KOZHIKODE 673 304 5) M/S ATHOLY SERVICE COOP BANK LTD ATHOLY CALIC UT - 673 315 2 . RESPONDENT 1) INCOME TAX OFFICE WARD 2(1) CALICUT 2) THE INCOME TAX OFFICER WARD 1 ALAPPUZHA ITA 581 & OTHERS (7 APPEALS) 8 3) INCOME TAX OFFICER WARD 2 (3), TRIVANDRUM 4) THE INCOME TAX OFFICER WARD 2(1), KOZHIKODE 5) THE INCOME TAX OFFICER WARD 2(1), KOZHIKODE 3 . CIT(A) , KOZ HIKODE /TRIVANDRUM 4 . CIT, KOZHIKODE/ TRIVANDRUM 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN
