ITO-20(3)(1), MUMBAI V. THE K E M HOSPITAL & SETH GSM COLLEGE EMPLOYEES CO-OP CREDIT SOCIETY LTD , MUMBAI

ITA 329/MUM/2023

AI Insights

The case involves an appeal by the Income Tax Officer against the order of the Commissioner of Income Tax (Appeals) which allowed a deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 to the KEM Hospital & Seth GSM College Employees Co Op Credit Society Ltd. The Revenue's appeal was based on the disallowance of the assessee's claim for a deduction of Rs.2,71,37,937 for the assessment year 2018-19, which was previously allowed in similar cases for earlier assessment years. The Tribunal referenced its previous decisions in the assessee's own cases for earlier years, where it consistently upheld the CIT(A)'s decisions allowing the deductions, noting that the assessee is a cooperative credit society and not a primary cooperative bank, thus not falling under the provisions of section 80P(4) of the Act as amended by the Finance Act, 2006.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136070 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 10-04-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 02-02-2023
• Other Referred Cases: ITA No.103/Mum/2023, ITA No.4986/Mum/2016, ITA No.6366/Mum/2019, ITA No.864/Mum/2017, ITA No.4552/Mum/2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MANOJ MISHRA; MUDIT SRIVASTAVA
• Keywords: Co-operative Credit Society

Judgement Text

म ु ंबई ठ “एच ”,म ु ंबई , ए ं म ज त # ं$, ेख े म' IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ H ”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER& SHRI AMARJIT SINGH , ACCOUNTANT MEMBER ं.329/म ु ं/2023 ( -. . 2018-19) ITA NO.329/MUM/2023(A.Y.2018-19) The ITO 20(3)(1),Mumbai, Room No.622, 6 th Floor, Piramal Chamber, Lal Baug, Mumbai – 400 012 ...... ./Appellant ब- म Vs. The KEM Hospital & Seth GSM College Employees Co Op Credit Society Ltd., Ground Floor, Old Building, KEM Hospital, Parel, Mumbai 400 012. PAN: AAAAT-5055-H ...../ त /Respondent . 0 / Appellant by : S/ Shri Manoj Mishra & Mudit Srivastava / त 0 /Respondent by : Shri Kumar Kale ु - ई 1 त / Date of hearing : 11/04/2023 234 1 त / Date of pronouncement : 11/04/2023 ेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [ in short ‘the CIT(A)’] dated 20/12/2022, for the Assessment Year 2018-19. 2 ITA NO.329/MUM/2023(A.Y.2018-19) 2. The solitary issue raised in appeal by the Revenue is against relief granted by the CIT(A) by deleting disallowance of assessee’s claim u/s. 80P(2) of the Income Tax Act, 1961 [in short ‘the Act’]. 3. Shri Kumar Kale appearing on behalf of the assessee submits at the outset that issue raised in appeal by the Revenue is perennial. In the preceding assessment years similar deduction u/s. 80P(2)(a)(i) of the Act was claimed by the assessee and the same was disallowed by the Assessing Officer. In first appeal the assessee’s claim of deduction was allowed by the CIT(A). The Department assailed the issue in appeal before the Tribunal but remained unsuccessful. The facts in the impugned assessment year are identical to the facts in assessment year 2017-18. The ld. Authorized Representative for the assessee furnished a copy of Tribunal order in ITA No.103/Mum/2023 for assessment year 2017-18, decided on 16/03/2023. 4. Shri Manjoj Mishra representing the Department vehemently defended the assessment order and prayed for reversing the findings of CIT(A). On query raised by the Bench, the ld. Departmental Representative fairly stated that the issue raised in present appeal is similar to the one decided by the Tribunal in assessee’s own case in assessment year 2017-18. 5. Both sides heard, orders of authorities below examined. The only issue assailed by the Revenue in appeal is deleting of disallowance of assessee’s claim of deduction u/s.80P(2)(a)(i) of the Act. The assessee is a Co-operative Credit Society run by employees of KEM Hospital & Seth GSM College. The assessee in the impugned assessment year has claimed a deduction of Rs.2,71,37,937/- u/s. 80P(2)(a)(i) of the Act. The Assessing Officer invoked the provisions of section 80P(4) to disallow the claim of assessee. In first appellate proceedings, the CIT(A) granted benefit of deduction u/s. 80P(2)(a)(i) of the Act to the assessee. We find that identical issue was assailed by the Department in assessment year 2017-18 vide ITA No.103/Mum/2023 (supra). The Tribunal dismissed the appeal of Revenue by holding as under: 3 ITA NO.329/MUM/2023(A.Y.2018-19) “ 3. The brief facts of the case as emanating from records are: The assessee is a Co-operative Credit Society engaged in providing credit facilities to its members. The assessee accepts various types of deposits only from its members and give loans only to its members. The members of appellant Co-Op Credit society are the employees of KEM Hospital & Seth GSM College. For the Assessment Year 2017-18, the assessee filed return of income on 13/10/2017 declaring total income as ‘Nil’ after claiming deduction of Rs.2,96,10,186/- u/s. 80P(2) of the Act. The Assessing Officer disallowed assessee’s claim of deduction by invoking the provisions of section 80P(4) of the Act. We find that this issue is perennial. The assessee’s claim of deduction u/s. 80P(2) of the Act was disallowed by the Assessing Officer for identical reasons in Assessment Year 2012-13. The assessee carried the issue in appeal before the CIT(A). The CIT(A) allowed assessee’s claim of deduction u/s. 80P(2) of the Act. The matter further travelled to the Tribunal in appeal by the Revenue in ITA No.4986/Mum/2016. The Tribunal dismissed the appeal of Revenue vide order dated 15/03/2018. Thereafter, in subsequent Assessment Years i.e. assessment year 2013- 14, 2014-15 and 2015-16, the Assessing Officer consistently disallowed assessee’s claim under section 80P(2) of the Act on identical grounds. The Tribunal in the orders for the respective Assessment Years accepted assessee’s claim for parity of reasons. For the sake of completeness relevant extract of the findings of Tribunal in Revenue’s appeal in ITA No.6366/Mum/2019 for Assessment Year 2015-16 decided on 07/04/2021 are reproduced herein below: “ 7. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been relied upon by the lower authorities. After deliberating at length on the orders of the lower authorities, we are persuaded to subscribe to the observations of the CIT(A) that as the assessee which is a co-operative credit society is not a primary co-operative bank, hence, it would not be hit by the provisions of Sec.80P(4) as had been made available on the statute vide the Finance Act, 2006 w.e.f 01.04.2007. Our said view is fortified by the fact that it is absolutely mandatory for a co-operative society to seek a licence from the Reserve Bank of India to form and operate as a co-operative bank. Further, a perusal of Circular No. 312 of the Reserve Bank of India reveals the process involved for conversion of a co-operative society into a primary co-operative bank. Admittedly, in the case before us as the assessee being a co-operative credit society is neither authorized nor had undertaken any of the banking business activities as are carried out by a primary co-operative bank, but had only provided financial assistance/credit to its members, therefore, it can safely be concluded that it cannot be held to be a co-operative bank. Apart from that, we find that as stated by the ld. A.R, and rightly so, the issue involved in the present appeal in squarely covered by the orders of the Tribunal in the assessee’s own case for the preceding years, viz. A.Y. 2012-13, ITA No. 4986/Mum/2018, dated 15.03.2018; A.Y 2013-14, ITA No. 864/Mum/2017, dated 20.06.2018; and A.Y 2014-15, ITA No. 4 ITA NO.329/MUM/2023(A.Y.2018-19) 4552/Mum/2019, dated 07.01.2021. On the basis of our aforesaid deliberations, we are persuaded to be in agreement with the observations of the CIT(A) that the assessee would not be hit by the provisions of Sec. 80P(4) of the Act. We, thus, being in agreement with the view taken by the CIT(A) that the claim of the assessee under Sec. 80P(2)(a)(i) was in order, uphold the same.” The Revenue has not been able to show any distinguishing feature in the impugned assessment year. Thus, we see no reason to deviate from the consistent view taken by the Tribunal in assessee’s own case in the past on same set of facts. The appeal of Revenue is thus, dismissed and the impugned order is upheld for parity of reasons.” In the light of above order by the Co-ordinate Bench in assessee’s own case, we see no infirmity in the impugned order. Hence, appeal by the Revenue is dismissed being devoid of any merit. 6. In the result, appeal by the Revenue is dismissed. Order pronounced in the open court on Tuesday the 11 th day of April, 2023. Sd/- Sd/- (AMARJIT SINGH ) (VIKAS AWASTHY) ेख /ACCOUNTANT MEMBER /JUDICIAL MEMBER म ु ंबई/ Mumbai, 6 - ं /Dated 11/04/2023 Vm, Sr. PS(O/S) त ल प अ े षतCopy of the Order forwarded to : 1. ./The Appellant , 2. / त / The Respondent. 3. The PCIT 4. 7 8 / त - , . . ., म ु बंई/DR, ITAT, Mumbai 5. 8 9: ; < /Guard file. BY ORDER, //True Copy// (Dy./Asstt.Registrar)/Sr. Private Secretary ITAT, Mumbai