ITO, Sikar V. SIKAR SAHAKARI BHOOMI VIKAS BANK, Sikar

ITA 317/JPR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5435 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P R MEENA
• Assessee Lawyers: MAHENDRA GARGIEYA ADV DHK
• Keywords: Opportunity of being heard; Wrong claim
• Section: 143(3); 27; 148; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 317 & 318/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2008-09 & 2009-10 INCOME TAX OFFICER, WARD-4, SIKAR. CUKE VS. M/S SIKAR SAHAKARI BHOOMI VIKAS BANK, BASANT VIHAR, SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABSA 0923 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI P.R. MEENA (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADV) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04/02/2016 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 24/02/2016 VKNS'K@ ORDER PER T.R. MEENA, A.M. BOTH ARE THE APPEALS FILED BY THE REVENUE AGAINST THE ORDER DATED 28/01/2015 OF THE LEARNED C.I.T.(A)-III, JAIPUR, FOR A.Y. 2008-09 AND 2009-10. THE EFFECTIVE COMMON GROUND OF BOTH THE A PPEALS ARE AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 2 ITA NO. 317 & 318/JP/2015 ITO VS M/S SIKAR SAHAKARI BHOOMI VIKAS BANK 15,51,872/- FOR A.Y. 2008-09 & RS. 22,10,160/- FOR A.Y. 2009-10 LEVIED U/S 271(1)(C) OF THE IT ACT. PENALTY WAS IMPOSED ON ACCOUNT OF CLAIMED DEDUCTION U/S 80P(2)( A)(I) OF THE IT ACT OF RS. 15,51,872/- FOR A.Y. 2008-09 & RS. 22,10,160/- FOR A.Y. 2009-10. BY PLACING RELIANCE U PON THE DECISION OF THE APEX COURT IN THE CASE OF M/S RELIA NCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 158(SC). HOWE VER, SINCE THE ASSESSEE HAD MADE A CLAIM OF DEDUCTION WHI CH WAS EXFACIE FALSE IN VIEW OF THE AMENDMENT TO THE SEC TION 80P, INACCURATE PARTICULARS HAD BEEN FURNISHED AND LEVY OF PENALTY WAS JUSTIFIED. 2. THE SOLE GROUND OF BOTH THE APPEALS ARE AGAINST D ELETING THE PENALTY OF RS. 15,51,872/- AND RS. 22,10,160/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE AC T). THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEES CASES WERE SCRU TINIZED U/S 143(3) OF THE ACT ON 20/12/2010 FOR A.Y. 2008-09 AND 29/09 /2011 FOR A.Y. 2009-10 AT TOTAL INCOME OF RS. 50,32,240/- AND RS. 71,62,620/- AS AGAINST THE RETURNED INCOME OF RS. NIL. THE NATURE O F ADDITION WAS MADE BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80P(2)(A)(I) OF THE ACT EQUAL TO AMOUNT OF NET PROFIT SHOWN BY THE ASSESSEE IN ITS RETURN OF INCOME. THE LD ASSESSING O FFICER INITIATED PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT FOR FUR NISHING INACCURATE PARTICULARS OF INCOME AND CONCEALMENT THEREOF. 3 ITA NO. 317 & 318/JP/2015 ITO VS M/S SIKAR SAHAKARI BHOOMI VIKAS BANK 2.1 BEFORE IMPOSING PENALTY, THE LD ASSESSING OFFIC ER GAVE REASONABLE OPPORTUNITY OF BEING HEARD, WHICH WAS ALSO RESPONDED BY THE ASSESSEE VIDE LETTER DATED 22/11/2011. THE ASSESSEE HAD ARGU ED THAT IT HAS PREFERRED APPEAL BEFORE THE HONBLE ITAT, JAIPUR AND REQUESTED TO THE ASSESSING OFFICER TO KEEP THE PENALTY PROCEEDING IN ABEYANCE TILL DISPOSAL OF QUANTUM APPEAL. THE LD ASSESSING OFFICER DISALLOWED CLAIM MADE BY THE ASSESSEE U/S 80P(2)(A)(I) OF THE ACT BY HOLDING THAT INSERTION OF SUB-SECTION (4) TO SECTION 80P ONLY PR IMARY AGRICULTURAL CREDIT SOCIETY OF PRIMARY COOPERATIVE AGRICULTURAL RURAL DEVELOPMENT BANKS ARE ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT . THE LD CIT(A) ALSO CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R BY HOLDING THAT THE APPELLANT BANK HAD NOT FULFILLED THE NECESSARY CRITERIONS AND CONDITIONS, THEREFORE, HE ALSO CONFIRMED THE FINDIN G OF THE ASSESSING OFFICER. THE ASSESSING OFFICER FINALLY IMPOSED PENAL TY U/S 271(1)(C) OF THE ACT FOR CONCEALING THE TAXABLE INCOME BY FURNIS HING INACCURATE PARTICULARS OF INCOME AT RS. 15,51,872/- FOR A.Y. 2 008-09 AND RS. 22,10,160/- FOR A.Y. 2009-10, WHICH ARE 100% OF TAX SOUGHT TO BE EVADED. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD ALLOWED 4 ITA NO. 317 & 318/JP/2015 ITO VS M/S SIKAR SAHAKARI BHOOMI VIKAS BANK ASSESSEES APPEAL BY OBSERVING THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND DEDUCTION UNDER THIS SECTION HAD BEEN A LLOWED IN EARLIER YEARS AND THAT THE PROVISIONS OF SECTION 80P(4) WERE NOT APPLICABLE TO THE ASSESSEE INASMUCH AS THESE PROVISIONS ARE APPLI CABLE ONLY IN RESPECT OF COOPERATIVE BANK OR ANY OTHER BANK/RRBS. THE ASS ESSEE PLACED RELIANCE BEFORE THE LD CIT(A) ON FOLLOWING DECISIONS: I. CIT VS. JAFARI MOMIN VIKAS CO-OPERATIVE CREDIT S OCIETY LTD. (2014) 100 DTR 421 (GUJ). II. CIT VS. SHREE BILURU GURUBASAVE PATTINA SAHKARI SANGH NIYAMITHA, ITA NO. 5006/2013 (KARNATAKA). III. CIT VS. BANGALORE CREDIT CO-OPERATIVE SOCIETY L TD, ITA NO. 598/2013 (KARNATAKA). IV. SAGAR CREDIT CO-OPERATIVE SOCIETY LTD. VS. CIT, ITA NO. 306/BANG/2014 (ITAT, A BENCH, BANG.) THE APPELLANT ALSO CONTENDED THAT COMPLETE DETAILS I N RESPECT OF SUCH CLAIM HAS BEEN MADE BEFORE THE AO AND THAT IT IS NO T THE CASE THAT ANY FALSE CLAIM IS MADE. IT WAS ALSO CLAIMED THAT THE AS SESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE INDEPENDENT AND DISTINCT PROCEEDING AND THAT IT NOT NECESSARY THAT ADDITION MADE IN THE ASSESSMENT ORDER MAY JUSTIFY IMPOSITION OF PENALTY IN ALL CASES. AS PER APPELLANT THE FACT AS TO WHETHER PROVISIONS OF SEC. 80P(4) ARE APPLICABLE TO CO-OPERATIVE BANKS / BANK OR OTHER ENTITY IS DEF INITELY A DEBATABLE 5 ITA NO. 317 & 318/JP/2015 ITO VS M/S SIKAR SAHAKARI BHOOMI VIKAS BANK ISSUE AND THAT ON THE DEBATABLE ISSUE NO PENALTY U/ S 27 L(L)(C) CAN BE IMPOSED. FOR SUCH PROPOSITION OF LAW THE APPELLANT H AS PLACED RELIANCE ON THE FOLLOWING CASE LAWS: I. CIT V. HARSHVARDHAN CHEMICALS & MINERALS LTD. (20 03) 259 ITR 212 (RAJ.). II. CIT V. CHAPLIN POINT LABORATORIES LTD, [2007] 29 3 ITR 524 (MAD.)/ 212 CIT 58(MAD.) III. DURGA KAMAL RICE MILLS V. CIT [2004] 265 ITR 25( CAL.). IV. BURMAH SHELL OIL STORAGE AND DISTRIBUTING CO. O F INDIA LTD. V. ITO [1978] 112 ITR 592 (CAL.) IT WAS ALSO CONTENDED THAT ALL THE RELEVANT FACTS IN RESPECT OF SUCH CLAIM WERE BEFORE THE AO AND THEREFORE MAKING OF ANY BONAF IDE CLAIM WHICH IS DENIED BY THE AO DOES NOT AUTOMATICALLY RESULT INTO CONCEALMENT INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME A S HELD BY THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUETS PV T. LTD. [2010] 322 ITR 158 (SC). ON CAREFUL CONSIDERATION OF ALL RELEVA NT FACTS IT MAY BE MENTIONED THAT PENALTY U/S 271(L)(C) CAN BE IMPOSED EITHER WHEN THE ASSESSEE HAS CONCEALED ANY PARTICULARS OF INCOME OR HAVE FURNISHED INACCURATE PARTICULARS OF INCOME. IN THIS CASE THER E IS NO DISPUTE ON THE FACT THAT ALL DETAILS AND RELEVANT FACTS RELATING T O CLAIM OF DEDUCTION U/S 80P WERE FURNISHED BEFORE THE AO AND THEREFORE IT IS NOT A CASE OF 6 ITA NO. 317 & 318/JP/2015 ITO VS M/S SIKAR SAHAKARI BHOOMI VIKAS BANK FURNISHING OF INACCURATE PARTICULARS OF INCOME. THIS IS ALSO NOT A CASE OF CONCEALMENT OF INCOME KEEPING IN VIEW THE DECISION O F HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUETS PVT. LT D. (SUPRA) IN AS MUCH AS SUCH CLAIM WAS MADE IN A BONAFIDE MANNER WHICH HAS BEEN REJECTED BY THE AO. MOREOVER IT IS ALSO A SETTLED LAW THAT ON A DEBATABLE ISSUE NO PENALTY U/S 27L(L)(C) CAN BE IMPOSED AND THE DECISI ON OF HONBLE JURISDICTION HIGH COURT AND OTHER COURTS AS RELIED UPON BY THE APPELLANT SUPPORT SUCH PROPOSITION OF LAW. THE FACT THAT THE IS SUE AS TO WHETHER SEC. 80P(4) WAS APPLICABLE ONLY IN RESPECT OF COOPER ATIVE BANK / RRBS / OTHER BANKS OR TO ALL CATEGORIES OF ENTITIES WAS A D EBATABLE ISSUE IS PROVED FROM THE FACT THAT VARIOUS HONBLE HIGH COUR TS AS REFERRED BY THE APPELLANT IN THE WRITTEN SUBMISSION HAVE GIVEN SUCH DECISION / INTERPRETATION THAT SEC. 80P(4) WAS ONLY APPLICABLE IN RESPECT OF COOPERATIVE BANKS ETC. ACCORDINGLY I AM OF THE CONS IDERED VIEW THAT IN THIS CASE NO PENALTY U/S 271(1)(C) WAS IMPOSABLE. THE REFORE THE PENALTY IMPOSED BY THE AO AMOUNTING TO RS. 1551872/- U/S 27 1(1)(C) OF IT ACT IS DELETED. THE GROUNDS OF APPEAL ARE ALLOWED. 3.1 SIMILAR FINDING HAS BEEN GIVEN BY THE LD CIT(A) FOR A.Y. 2009-10. 7 ITA NO. 317 & 318/JP/2015 ITO VS M/S SIKAR SAHAKARI BHOOMI VIKAS BANK 4. NOW REVENUE IS IN APPEALS BEFORE US. THE LD DR VEH EMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND RE ITERATED THE ARGUMENTS MADE BEFORE THE LD CIT(A). AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE HONBLE ITAT, JAIPUR BENCH HAD ALLOWED THE ASSESSEES OWN APPEAL FOR A.Y. 2009-10 IN ITA NO . 177/JP/2013 ORDER DATED 11/08/2015 WHEREIN THE HONBLE BENCH HA S ALLOWED DEDUCTION U/S 80P OF THE ACT AS THE ADDITION IS NOT SUSTAINED BY THE HONBLE BENCH. THE PENALTY IMPOSED AND CONFIRMED IS DESERVED TO BE DELETED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE INVOLVED IN THE YEARS UNDER CONSIDERATION IS ALREADY COVERED AND DECIDED IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE BY THE ORDER OF THE COORDINATE BENCH FOR A.Y. 2009-10 IN ITA NO. 177/JP/2013 ORDER DATED 11/08/2015. THE COORDINATE BENCH HAS HELD AS UNDER:- 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AFTER GOING THROUGH THE CASE LAWS CITED BY THE ASSESSEE AS WELL A S BYELAWS OF SOCIETY, REVEALED THAT THE ASSESSEE IS NO T A COOPERATIVE BANK BUT COOPERATIVE SOCIETY. THE EXCLUS IVE PROVISION TO SUB-SECTION (4) OF SECTION 80P IS NOT 8 ITA NO. 317 & 318/JP/2015 ITO VS M/S SIKAR SAHAKARI BHOOMI VIKAS BANK APPLICABLE IN THE CASE OF THE ASSESSEE. THE CASE LAW REFERRED BY THE ASSESSEE IN THE CASE OF CIT VS. JAFA RI MOMIN VIKAS COOPERATIVE CREDIT SOCIETY LTD. (SUPRA) IS SQUARELY APPLICABLE. THE HONBLE GUJARAT HIGH COURT HAS HELD AS UNDER:- FROM THE ABOVE CLARIFICATION, IT CAN BE GATHERED T HAT SUB- SECTION (4) OF SECTION 80P WILL NOT APPLY TO AN ASS ESSEE WHICH IS NOT A COOPERATIVE BANK. IN THE CASE CLARIF IED BY CBDT, DELHI COOP URBAN THRIFT & CREDIT SOCIETY LTD. WAS UNDER CONSIDERATION. CIRCULAR CLARIFIED THAT THE SA ID ENTITY NOT BEING A COOPERATIVE BANK, SECTION 80P(4) OF THE ACT WOULD NOT APPLY TO IT. IN VIEW OF SUCH CLARIFICATIO N, WE CANNOT ENTERTAIN THE REVENUES CONTENTION THAT SECT ION 80P(4) WOULD EXCLUDE NOT ONLY THE CO-OPERATIVE BANK S OTHER THAN THOSE FULFILLING THE DESCRIPTION CONTAIN ED THEREIN BUT ALSO CREDIT SOCIETIES, WHICH ARE NOT COOPERATIV E BANKS. IN THE PRESENT CASE, RESPONDENT ASSESSEE IS ADMITTE DLY NOT A CREDIT SO-OPERATIVE BANK BUT A CREDIT CO-OPERATIV E SOCIETY. EXCLUSION CLAUSE OF SUB-SECTION (4) OF SECT ION 80P, THEREFORE, WOULD NOT APPLY. IN THE RESULT, TAX APPE ALS ARE DISMISSED. THE DEPARTMENT ITSELF HAS ALLOWED DEDUCTION U/S 80P(2)(A)(I) OF THE ACT IN A.Y. 2007-08, WHICH HAS N OT BEEN REOPENED U/S 148 AND NO ORDER U/S 263 WAS PASSE D BY THE DEPARTMENT. THE LD DR HAD NOT BROUGHT ON RECO RD ANY EVIDENCE THAT IN PRECEDING YEAR, THE ASSESSING OFFICERS ORDER IN A.Y. 2007-08 HAD NOT BEEN ACCEPT ED BY THE DEPARTMENT. BY RESPECTFULLY FOLLOWING THE DECISI ON OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. J AFARI MOMIN VIKAS COOPERATIVE CREDIT SOCIETY LTD.(SUPRA) ON IDENTICAL ISSUE, WE HOLD THAT THE ASSESSEE IS A COOP ERATIVE 9 ITA NO. 317 & 318/JP/2015 ITO VS M/S SIKAR SAHAKARI BHOOMI VIKAS BANK SOCIETY NOT A COOPERATIVE BANK AND IS ENTITLED FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. BY RESPECTFULLY FOLLOWING THE ORDER OF THE COORDINAT E BENCH IN ASSESSEES OWN CASE FOR A.Y. 2009-10, WE, THEREFORE, UPHOLD THE ORDER OF THE LD CIT(A). 5.1 SIMILAR FINDING SHALL APPLY FOR THE A.Y. 2009-1 0 MUTATIS MUTANDIS. 6. IN THE RESULT, BOTH THE REVENUES APPEALS ARE DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/02/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:-24 TH FEBRUARY, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD 4, SIKAR. 2. IZR;FKHZ @ THE RESPONDENT- M/S SIKAR SAHAKARI BHOOMI VIKAS BANK , SIKAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.317 & 318/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR