The Alarsa Nagrik Co.Op.Credit Society Ltd., Anand V. The Income tax Officer,Ward-3(4), Petlad

ITA 2918/AHD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80475 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI , ACCOUNTANT MEMBER ITA NO . 2918 /AHD/20 1 2 A. Y. 200 9 - 10 THE ALARSA NAGRIK CO.OP. CREDIT SOCIETY LTD., GANDHI CHOWK, AT & PO. ALAR SA, TA. BORSAD, DIST. ANAND (GUJARAT) PAN: AAATT 3680P VS ITO, WARD - 3(4), PETLAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI M.K. SINGH , SR. D.R. , ASSESSEE(S) BY : SHRI C HIRAG SHAH , A.R. / DATE OF HEARING : 2 6 / 0 9 /201 4 / DATE OF PRONOUNCEMENT: 31 / 10 /201 4 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN A PPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF T HE LD. CIT (APPEALS) - I, BARODA , DATED 26 . 10 . 201 2. SUBSTANTIVE GROUND RAISED BEFORE US IS REPRODUCED BELOW: 2 . THE ASSESSING OFFICER AS WELL AS FIRST APPELLATE AUTHORITY HAS ERRED IN LAW AND ON FACTS IN MAKING AND CONFIRMING RESPECTIVELY DISALLOWANCE OF DED UCTION U/S.80P(2)(A)(I) OF IT ACT. THE SAME DESERVES TO BE DELETED. 2 . FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) , DATED 26.12.2011 WERE THAT THE ASSESSEE WAS TAXED UNDER STATUS OF (CO - OPERATIVE SOCIETY). THE ASSE SSEE HAS DISCLOSED THE RETURN AT NIL INCOME; HOWEVER, THE AO HAS DENIED THE DEDUCTION U/S.80P(2)(A)(I) AND ASSESSED THE INCOME AT RS.47,78,090/ - . THERE WAS AN ITA NO. 2918 /AHD/201 2 THE ALARSA NAGRIK CO.OP. CREDIT SOCIETY LTD. VS. ITO, WARD - 3(4), PETLAD FOR A.Y. 200 9 - 10 - 2 - ANOTHER ADDITION U/S.40(A)(IA) WHICH IS NOT THE SUBJECT MATTER OF THIS APPEAL. AS PER AO, THE ASS ESSEE WAS CARRYING OUT THE BUSINESS OF BANKING BY P ROVIDING CREDIT FACILITIES TO ITS MEMBER. IT WAS ALSO FOUND THAT THE ASSESSEE WAS HAVING FDRS IN VARIOUS NATIONALIZE D BANKS. AS PER AO, THE ASSESSEE HAS RECEIVED INTEREST AMOUNTING TO RS.1,35,20,728/ - FROM THE BANKS AND CLAIMED DEDUCTION U/S.80P(2)(A)(I). THE FIRST OBJECTION OF THE AO WAS THAT AS PER SECTION 80P(2)(D) A CO - OPERATIVE SOCIETY CAN CLAIM DEDUCTION IF THE INTEREST IS RECEIVED FROM OTHER CO - OPERATIVE SOCIETY BUT NOT FROM A NATIONALIZE BANK. THE OTHER OBJECTION WAS THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION BECAUSE IT IS NOT A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL DEVELOPMENT BANK. ASSIGNING THESE REASONS, CLAIM OF DEDUCTION WAS DENIED AND TAX WAS IMPOSED. 3. BEING AGGRIEVED, THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. LEARNED CIT(A) HAS HELD THAT THE ASSESSEE HAD FAILED TO PROVE THAT IT WAS DEALING WITH ITS MEMBERS ONLY; HENCE, ACCORDING TO HIM, THE ASSESSEE WAS A CO - OPERATIVE BANK WITHIN THE MEANING OF BANKING REGULATION ACT; HENCE, NOT ENTITLED FOR CLAIM OF DEDUCTION U/S.80P(2)(A)(I). NOW THE ASSESSEE IS FURTHER IN APPEAL. 4. IN THE LIGHT OF THE ABOVE BRIEF FACTS, WE HAVE HEARD BOTH THE SIDES. PARTIES APPEARING BEFORE US HAVE ADMITTED THAT N OW THIS ISSUE REQUIRES RE - CONSIDERATION IN VIEW OF A LATEST DECISION OF RESPECTED ITAT B BENCH AHMEDABAD PRONOUNCED IN THE CASE OF CIT, GANDHINAGAR VS. M/S. JAFARI MOMIN VIKAS CO - OPERATIVE CREDIT SOCIETY LTD. , ORDER DATED 31.10.2012 WHICH WAS CONFIRMED BY HON BLE GUJARAT HIGH COURT IN TAX ITA NO. 2918 /AHD/201 2 THE ALARSA NAGRIK CO.OP. CREDIT SOCIETY LTD. VS. ITO, WARD - 3(4), PETLAD FOR A.Y. 200 9 - 10 - 3 - APPEAL NOS.442, 443 & 863 OF 2013 , ORDER DATED 15.01.2014 , WHEREIN IT WAS HELD THAT CONSIDERING THE FACTS, THE ASSESSEE WAS NOT A C O - OPERATIVE B ANK. FURTHER, IT WAS ALSO NOTED BY THE HON BLE COURT THAT THE SAID ASSESSEE WAS ADMITTEDLY NOT A CREDIT CO - OPERATIVE BANK BUT A CREDIT CO - OPERATIVE SOCIETY. THEREFORE, THE PARTIES HAVE STATED BEFORE US THAT THIS ISSUE SHOULD NOW BE DECIDED IN THE LIGHT OF THE ORDER OF HON BLE HIGH COURT BECAUSE SUCH FINDING ON FACTS WAS YET TO BE CONSIDERED BY THE REVENUE AUTHORITIES. WE FIND FORCE IN THIS SUBMISSION BECAUSE THE AMENDED PROVISIONS OF SECTION 80P(4) INSERTED W.E.F. 10.4.2007 HAS NOT ONLY PROVIDED THAT CO - OPERATIVE BANK SHALL NOT BE ENTITLED FOR THE DEDUCTION BUT ON ACCOUNT OF THE S AID ENACTMENT CO - OPERATIVE BANK AND PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK HAVE ALSO BEEN DENIED. THEREFORE, LEARNED CIT(A) IS HEREBY DIRECTED TO FIRST ASCERTAIN WHETHER THE ASSESSEE IS EITHER A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A RURAL DEVELOPMENT BANK AS PRESCRIBED IN THE ACT OR THE ASSESSEE IS A CO - OPERATIVE SOCIETY AS PRESCRIBED U/S.80P(2) OF IT ACT AND THEREUPON SHALL DECIDE THE ASSESSEE S CLAIM OF DEDUCTION. IN THE ABSENCE OF THOSE BASIC FACTS , IT IS NOT POSSIBLE AT PRESE NT FOR US TO DECIDE WHETHER THE ASSESSEE IS ENTITLED FOR THE CLAIM ED DEDUCTION. THEREFORE, UNDER THE INTEREST OF NATURAL JUSTICE, THIS MATTER IS RESTORED BACK TO THE FILE OF LEARNED CIT(A) TO BE DECIDED DE NOVO AS PER LAW, NEEDLESS TO SAY, AFTER PROVIDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. SIDE BY SIDE, THIS ASSESSEE IS HEREBY DIRECTED TO FULLY CO - OPERATE WITH THE LEARNED CIT(A) SO THAT THIS APPEAL CAN BE DECIDED AT AN EARLY DATE. SINCE, THE MATTER HAS BEEN RESTORED BACK TO THE FILE OF LEARNED CIT(A ); THEREFORE, THE GROUND RAISED BY THE ASSESSEE MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSE ONLY. ITA NO. 2918 /AHD/201 2 THE ALARSA NAGRIK CO.OP. CREDIT SOCIETY LTD. VS. ITO, WARD - 3(4), PETLAD FOR A.Y. 200 9 - 10 - 4 - 5. IN THE RESULT, ASSESSEE S APPEAL IS ALLOWED BUT FOR STATISTICAL PURPOSE ONLY. SD/ - SD/ - ( N.S. SAINI ) ( M UKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31 / 10 / 20 1 4 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD