The ACIT,B.K.Circle, Palanpur V. The Kamdar Co.Op. Credit Society Ltd., Banaskantha

ITA 2872/AHD/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1197 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO.2872/AHD/2012 (ASSESSMENT YEARS:2009-10) A.C.I.T., B. K. CIRCLE, PALANPUR APPELLANT VS. THE KANODAR CO.OP. CREDIT SOCIETY LTD., KANODAR, DIST. BANASKANTHA - 385520 RESPONDENT PAN: AAAAT6767C /BY APPELLANT : MS. SANYOGITA NAGPAL, SR. D.R. /BY RESPONDENT : MS.URVASHI SODHAN, A.R. /DATE OF HEARING : 02.12.2015 /DATE OF PRONOUNCEMENT : 03.12.2015 & ITA. NO.2867, 2868 & 2869/AHD/2012 (ASSESSMENT YEARS:2007-08, 08-09 & 09-10) A.C.I.T., B. K. CIRCLE, PALANPUR APPELLANT VS. THE SARDAR KRUSHINAGAR SAVING 2 ITA NO.2872/ AHD/ 2012 , A.Y. 09-10 & ITA NOS. 286 7, 2868 & 2869/AHD/12 FOR A.Y. 07-08, 08-09 & 09-1 0 & CREDIT CO.OP. SOCIETY LTD., DANTIWADA, PIN - 385506 RESPONDENT PAN: AAAAT3867B /BY APPELLANT : MS. SANYOGITA NAGPAL, SR. D.R. /BY RESPONDENT : NONE /DATE OF HEARING : 02.12.2015 /DATE OF PRONOUNCEMENT : 03.12.2015 ORDER PER RAJESH KUMAR, A.M: THESE APPEALS FILED BY THE REVENUE ARE AGAINST THE ORDERS OF CIT(A)- XX, AHMEDABAD, DATED 08.10.2012 FOR ALL THE ABOVE A SSESSMENT YEARS PERTAIN TO TWO DIFFERENT ASSESSEES. SINCE THE ISSUE INVOLV ED IN ALL THESE APPEALS IS OF COMMON NATURE AND THEREFORE THESE APPEALS ARE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. WE SHALL TAKE UP THE ITA NO.2872/AHD/2012 IN CASE OF THE KANODAR CO.OP. CREDIT SOCIETY LTD. REVENUE HAS RAISED FOLL OWING GROUNDS: 1) THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.10,68,423/- MADE U/S.80P(2)(A)(I) OF THE ACT. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONE R OF INCOME-TAX (APPEALS)-XX, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 2. THE COMMON ISSUE RAISED IN BOTH THE GROUNDS OF A PPEAL IS AGAINST THE DELETION OF DISALLOWANCE OF RS.10,68,423/- MADE U/S .80P(2)(A)(I) OF THE ACT BY CIT(A). 3 ITA NO.2872/ AHD/ 2012 , A.Y. 09-10 & ITA NOS. 286 7, 2868 & 2869/AHD/12 FOR A.Y. 07-08, 08-09 & 09-1 0 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A SOCIETY CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILITY TO ITS ME MBER AND CLAIMED DEDUCTION U/S.80P(2)(A)(I) OF THE ACT. THE LD. A.O. OBSERVED THAT THE CLAIM OF THE ASSESSEE WAS NOT IN ACCORDANCE WITH LAW AND THEREFO RE ISSUED NOTICE U/S.148 OF THE IT ACT ON 04.03.2011 AND FRAMED ASSESSMENT U /S.143(3) R.W.S. 147 OF THE ACT VIDE ORDER DATED 26.08.2011 BY REJECTING TH E CLAIM OF THE ASSESSEE. THE LD. A.O. CAME TO THE CONCLUSION THAT THE ASSESS EE CO-OPERATIVE SOCIETY WAS NEITHER A PRIMARY AGRICULTURAL CO-OP. SOCIETY N OR A PRIMARY CO-OP. AGRICULTURE AND RURAL DEVELOPMENT BANK AND DISALLOW ED DEDUCTION CLAIMED BY THE ASSESSEE U/S.80P(2)(A)(I). THE A.O. FURTHER REFERRED TO THE AMENDMENTS IN SECTION 2(24) SUB-CLAUSE 7A AND ALSO SECTION 80P SUBSECTION 4 OF THE ACT. 4. LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSE SSEE BY FOLLOWING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F TOTGARS CO-OP. SALE SOCIETY LTD. VS. ITO 322 ITR 283 (2010) BY DIRECTIN G THE ASSESSING OFFICER TO ALLOW THE DEDUCTION IN RESPECT OF INCOME BY WAY OF INTEREST FROM MEMBERS AND TREAT THE OTHER INCOME AS INCOME FROM OTHER SOU RCES. 5. THE LD. D.R. RELIED HEAVILY ON THE ORDER OF A.O. AND PRAYED THAT THE ORDER OF CIT(A) MAY BE SET ASIDE AND THAT OF A.O. M AY BE RESTORED. 6. THE LD. A.R., ON THE OTHER HAND, SUBMITTED THAT THE ISSUE RAISED BY THE REVENUE IS COVERED IN FAVOUR OF THE ASSESSEE IN ITA NO.647/AHD/2011, A.Y. 2007-08 VIDE ORDER DATED 30.07.2015 AND THEREFORE, SUBMITTED THAT THE APPEAL OF THE REVENUE BE DISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE IS A CO-OP. SOCI ETY ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE ASSESSEE FILED ITS RETURN OF 4 ITA NO.2872/ AHD/ 2012 , A.Y. 09-10 & ITA NOS. 286 7, 2868 & 2869/AHD/12 FOR A.Y. 07-08, 08-09 & 09-1 0 INCOME ON 25.03.2011 BY CLAIMING DEDUCTION U/S.80P( 2)(A)(I) WHICH WAS REJECTED BY THE A.O. AND THE LD. CIT(A) PARTLY ALLO WED THE APPEAL OF THE ASSESSEE. THE LD. A.R. PLACED BEFORE US A COPY OF DECISION IN ITA NO.647/AHD/2011, A.Y. 2007-08, IN WHICH THE ISSUE O F ALLOWABILITY OF DEDUCTION U/S.80P(2)(A)(I) OF THE ACT HAS BEEN DECI DED IN FAVOUR OF THE ASSESSEE VIDE PARA 7 & 8 WHICH ARE REPRODUCED AS UN DER: 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) UPHELD THE ORDER OF A.O AFTER CONSIDERING THE DEFI NITION OF CO-OP. BANK MENTIONED IN CLAUSE (CCI) OF SECTION 56(5) OF PART-V OF BANKING REGULATION ACT, 1949. WE HOWEVER FIND THAT THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SURAT VANKAR SAHAKARI SANGH LTD. (SUPRA). AFTER CONSIDERING THE CLARIFICATION ISSUED BY CBDT VIDE CIRCULAR NO. 133 OF 2007 DATED 09.05.2007, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- 4. AS PER SECTION 80P(4), THE PROVISIONS OF SECTION 80P WOULD NOT APPLY IN R ELATION TO ANY CO-OPERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. AS PER THE EXPLANATION, THE TERMS CO-OPERATIVE BANK AND PRIMARY AGRICULTURAL CREDIT SOCIETY SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN PART V OF THE BANKING REGULATION ACT, 1949. 5. ASSESSING OFFICER HELD THAT BY VIRTUE OF SECTION 80P(4), THE RE SPONDENT ASSESSEE WOULD NOT BE ENTITLED TO BENEFITS OF DEDUCTION UNDER SECTION 80P. CIT(APPEALS ) AS WELL AS THE TRIBUNAL REVERSED THE DECISION OF THE ASSESSING OFFICE R ON THE PREMISE THAT THE RESPONDENT ASSESSEE NOT BEING A BANK, EXCLUSION PROVIDED IN SUB- SECTION(4) OF SECTION 80P WOULD NOT APPLY. THIS, IRRESPECTIVE OF THE F ACT THAT THE RESPONDENT WOULD NOT FALL WITHIN THE EXPRESSION PRIMARY AGRICULTURAL CREDIT SOCIETY. 6. HAD THIS BEEN THE PLAIN STATUTORY PROVISIONS UNDER CONSIDERATION IN ISOLATI ON, IN OUR OPINION, THE QUESTION OF LAW COULD BE STATED TO HAVE ARISEN. WHEN, AS CONTENDED BY THE ASSESSEE, BY VIRTUE OF SUB-SECTION(4) ONLY CO-OPERATIV E BANKS OTHER THAN THOSE MENTIONED THEREIN WERE MEANT TO BE EXCLUDED FOR THE PURPOS E OF DEDUCTION UNDER SECTION 80P, A QUESTION WOULD ARISE WHY THEN LEGISLATURE SPECIFIED PRIMARY AGRICULTURAL CREDIT SOCIETIES ALONG WITH PRIMARY CO- OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANKS FOR EXCLUSION FROM S UCH EXCLUSION AND IN OTHER WORDS, CONTINUED TO HOLD SUCH ENTITY AS ELIGIBLE FOR DEDUCTION. HOWEVER, THE ISSUE HAS BEEN CONSIDERABLY SIMPLIFIED BY VIRTUE OF CBDT CIRCULAR NO. 133 OF 2007 DATED 9.5.2007. CIRCULAR PROVIDES AS UNDER: SUBJECT: CLARIFICATION REGARDING ADMISSIBLY OF DEDUCTION UNDER SECTION 80P OF T HE INCOME-TAX ACT, 1961. 1. PLEASE REFER TO YOUR LETTER NO. DCUS/30688/2007, DATED 28.03.2007 ADDRESSED TO CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES, ON THE ABOVE GIVEN SUBJECT. 5 ITA NO.2872/ AHD/ 2012 , A.Y. 09-10 & ITA NOS. 286 7, 2868 & 2869/AHD/12 FOR A.Y. 07-08, 08-09 & 09-1 0 2. IN THIS REGARD, I HAVE BEEN DIRECTED TO STATE THAT SUB-SECTION(4) OF SE CTION 80P PROVIDES THAT DEDUCTION UNDER THE SAID SECTION SHALL NOT BE ALLOWABLE TO ANY CO-OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. FOR THE PURPOSE OF THE SAID SUB-SECTION, CO-OPERATIVE BANK SHALL HAVE THE MEANING ASSIGNED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949. 3. IN PART V OF THE BANKING REGULATION ACT, CO-OPERATIVE BANK MEANS A STATE CO-OPERATIVE BANK, A CENTRAL CO-OPERATIVE BANK AND A PRIMARY CO- OPERATIVE BANK. 4. THUS, IF THE DELHI CO OP URBAN T & C SOCIETY LTD. DOES NOT FALL WITHIN THE MEANING OF CO-OPERATIVE BANK AS DEFINED IN PART V OF THE BANKING REGULATION ACT, 1949, SUB-SECTION(4) OF SECTION 80P WILL NOT APPLY IN THIS CASE. 5. THE ISSUES WITH THE APPROVAL OF CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES. 7.FROM THE ABOVE CLARIFICATION, IT CAN BE GATHERED THAT SUB-SECTION(4) OF SE CTION 80P WILL NOT APPLY TO AN ASSESSEE WHICH IS NOT A CO-OPERATIVE BANK. IN THE CASE CLARIFIED BY CBDT, DELHI COOP URBAN THRIFT & CREDIT SOCIETY LTD. WAS UNDER CONSIDERATION. CIRCULAR CLARIFIED THAT THE SAID ENTITY NOT BEING A CO-OPERATIV E BANK, SECTION 80P(4) OF THE ACT WOULD NOT APPLY TO IT. IN VIEW OF SUCH CLARI FICATION, WE CANNOT ENTERTAIN THE REVENUES CONTENTION THAT SECTION 80P(4) WOULD EXCLUDE NOT ONLY THE CO-OPERATIVE BANKS OTHER THAN THOSE FULFILLING THE DESCRIPTION CONTAI NED THEREIN BUT ALSO CREDIT SOCIETIES, WHICH ARE NOT CO-OPERATIVE BANKS. IN THE PRESENT CASE, RESPONDENT ASSESSEE IS ADMITTEDLY NOT A CREDIT CO-OPERATIVE BANK BUT A CREDIT CO-OPERATIVE SOCIETY. EXCLUSION CLAUSE OF SUB-SECTION(4) OF SECTION 80P , THEREFORE, WOULD NOT APPLY.' IN THE RESULT, TAX APPEALS ARE DISMISSED. 8. IN THE PRESENT CASE, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO DEMONSTRATE THAT ASSESSEE IS A CO-OPERATIVE BANK AND NOT A CREDIT C O-OPERATIVE SOCIETY. IN SUCH A SITUATION, WE ARE OF THE VIEW THE ISSUE IN THE PRES ENT CASE IS DIRECTLY COVERED BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CAS E OF SURAT VANKAR SAHAKARI SANGH LTD. (SUPRA). BEFORE US, REVENUE HAS NOT PLACED ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFORESAID FACTS AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF HONBLE GUJARAT HIGH COURT , WE ARE OF THE VIEW THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80P. WE THEREFORE DIRECT ACCORDINGLY. IN THE RESULT, THE GROUND OF ASSESSEE IS ALLOWED. IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH, WE ARE OF THE VIEW THAT ISSUE IN THE PRESENT CASE IS DIRECTLY COVERED IN FA VOUR OF THE ASSESSEE AND MOREOVER, THE REVENUE HAS NOT PLACED ANY CONTRARY B INDING DECISION IN ITS SUPPORT BEFORE US. IN VIEW OF THESE FACTS AND RESP ECTFULLY FOLLOWING THE ABOVE DECISION, WE ARE OF THE VIEW THAT THE ASSESSEE IS E LIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I) OF THE ACT AND THE APPEAL OF THE R EVENUE IS DISMISSED. THE A.O. IS DIRECTED ACCORDINGLY. 6 ITA NO.2872/ AHD/ 2012 , A.Y. 09-10 & ITA NOS. 286 7, 2868 & 2869/AHD/12 FOR A.Y. 07-08, 08-09 & 09-1 0 ITA NOS. 2867, 2868 & 2869/AHD/12 FOR A.Y. 07-08, 0 8-09 & 09-10 8. THE ISSUE RAISED IN THE GROUNDS OF APPEAL IN ITA NOS. 2867, 2868 & 2869/AHD/12 FOR A.Y. 07-08, 08-09 & 09-10 IS SAME AS DECIDED BY US IN ITA NO.2872/AHD/2012 FOR A.Y. 2009-10 IN CASE OF THE KA NODAR CO.OP. CREDIT SOCIETY LTD. AND THEREFORE, FACTS BEING SAME, OUR D ECISION IN THE SAID ITA SHALL APPLY TO THESE APPEALS AS WELL AND AS A RESUL T, THE APPEAL OF THE REVENUE IS DISMISSED. THE A.O. IS DIRECTED ACCORDINGLY. 9. IN THE RESULT, ALL THE APPEALS OF REVENUE ARE DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 3 RD DAY OF DECEMBER, 2015. SD/- SD/- (SHAILENDRA KUMAR YADAV) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 03/12/2015 TRUE COPY / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) , -./ 00'(1 '( 1 23& / DR, ITAT, AHMEDABAD 4 /56 / GUARD FILE. BY ORDER / 1 / 2 % '( 1 23&