ITO 17(2)(3), MUMBAI V. THE MAHARASHTRA MANTRALIYA VA SANLAGANA SHASKIYA KARAMCHARI CO.OP.CREDIT SOCIETY LTD., MUMBAI

ITA 3475/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8531 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 22-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G PANSARI
• Keywords: Set aside
• Section: 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 3475/MUM/2018 ASSESSMENT YEAR: 2012 - 13 & ITA NO. 3476/MUM/2018 ASSESSMENT YEAR: 2013 - 14 INCOME TAX OFFICER - 17(2)(3), ROOM NO. 123B/G, 1 ST FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020. VS. THE MAHARASHTRA MANTRALIYA VA SANLAGANA SHANLAGANA SHASKIYA KARAMCHARI CO. OP. CREDIT SOC. LTD., 1 ST FLOOR, POST OFFICE BLOCK, MANTRALIYA, MUMBAI - 400032. PAN NO. AAAAT8908R APPELLANT RESPONDENT REVENUE BY : MR. D.G. PANSARI, DR ASSESSEE BY : MR. RUTURAJ H. GURJAR , AR DATE OF HEARING : 09/07/2019 DATE OF PRONOUNCEMENT : 10/07/2019 ORDER PER N.K. PRADHAN, AM THE CAPTIONED APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 28, MUMBAI [IN SHORT CIT(A)] AND ARISE OUT OF THE ASSESSMENT COMPLETED U/S 143 OF THE INCOME TAX ACT 1961 (THE ACT). AS COMMON ISSUES AR E INVOLVED, WE ARE PROCEEDING TO DISPOSE THEM OFF THROUGH A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. FACTS BEING IDENTICAL, WE BEGIN WITH THE ASSESSMENT YEAR (AY) 2012 - 13 . THE MAHARASHTRA MANTRALIYA ITA NOS. 3475 & 3476/MUM/2018 2 2. THE EFFECTIVE GROUNDS OF APPEAL FILED BY THE R EVENUE READ AS UNDER: 1. ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT DEDUCTION U/S 80P(2)(I)(IA) IS ALLOWABLE, AN ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE DEBITED TO THE P & L A/C IS REQUIRED TO BE COVERED UNDER PROVISIONS OF SECTION 80P OF THE INCOME TAX ACT, 1961, EVEN WHEN IT IS SETTLED PRINCIPLE THAT THE DEEMING FICTION CREATED UNDER ANY PROVISIONS OF THE ACT CANNOT BE IMPORTED INTO A BENEFICIAL PROVISIONS OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80P WITHOUT CONSIDERING INSERTION OF SECTION 80P(4) AND SUB - CLAUSE (VIIA) TO SECTION 2(24) VIDE FINANCE ACT, 2006 W.E.F. 01.4.2007. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, TH E LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80P WITHOUT CONSIDERING THE FACTS THAT THE ASSESSEE FULFILS ALL THE THREE CONDITIONS LAID DOWN U/S 56(C)(CCV) OF PART V OF THE BANKING REGULATION ACT, 1949 AND THEREFORE, FALLS IN THE CATEGORY OF A PRIMARY C O - OPERATIVE BANK. 3 . BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE IS A CO - OPERATIVE CREDIT SOCIETY ENGAGED IN THE BUSINESS OF ACCEPTING AND LENDING MONEYS TO ITS MEMBERS ONLY IN THE NORMAL COURSE OF ITS ACTIVITIES. IN THE COMPUTATION OF TOTAL INCOME, TH E ASSESSEE HAS CLAIMED DEDUCTION OF RS.2,32,79,304/ - U/S 80P(2)(A)(I) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) OBSERVED THAT THE DEDUCTION ALLOWABLE U/S 80P(2)(I) IN THE CASE OF CO - OPERATIVE CREDIT SOCIETY ENGAGED IN CARRYING OF THE BUSINESS OF BANKING (CO - OPERATIVE BANKS) HAS BEEN WITHDRAWN FROM THE ASSESSMENT YEAR (AY) 2007 - 08, EXCEPT IN THE CASE OF PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. REFERRING TO THE THE MAHARASHTRA MANTRALIYA ITA NOS. 3475 & 3476/MUM/2018 3 RELEVANT PROVISIONS OF MAHARASHTRA CO - OPERATIVE SOCIETIES ACT, 1960; PART V OF T HE BANKING REGULATION ACT, 1949; AND SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT, THE AO HELD THAT (I) THE ASSESSEE IS A CO - OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK, (II) THE ASSESSEE FULFILS THE CONDITION LAID DOWN IN SECTION 56(C)(CCV) OF PART V OF THE BANKING REGULATION ACT, 1949 FOR BEING A CO - OPERATIVE BANK. CONSIDERING THE ABOVE FACTS, THE AO DISALLOWED THE CLAIM OF DEDUCTION MADE BY THE ASSESSEE U/S 80P OF THE ACT. 4 . IN APPEAL, THE LD. CIT(A) , CONSIDER ING THE ORDER PASSED BY THE ITAT FOR AY 2010 - 11 IN THE CASE OF THE ASSESSEE ALLOWED THE APPEAL FILED BY THE ASSESSEE. 5. BEFORE U S, THE LD. DR SUBMITS THAT THE AO IN THE INSTANT CASE HAS RIGHTLY MADE THE DISALLOWANCE OF DEDUCTION CLAIMED BY THE ASSESSEE U/S 80P OF THE ACT BY REFERRING TO THE MAHARASHTRA CO - OPERATIVE SOCIETIES ACT, 1960, BANKING REGULATION ACT, 1949 AND THE PROVISION S OF SECTION 80P OF THE INCOME TAX ACT. IT IS ARGUED BY HIM THAT IN THE PRESENT CASE THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80P WITHOUT CONSIDERING INSERTION OF SECTION 80P(4) AND SUB - CLAUSE (VIIA) TO SECTION 2(24) VIDE FINANCE ACT, 2006 W.E.F. 01.04.2007. THUS IT IS STATED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THE ORDER PASSED BY THE AO BE RESTORED. 6. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE PRESENT ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE O RDER OF THE ITAT B BENCH, MUMBAI IN ASSESSEES OWN CASE FOR AY 2010 - 11 THE MAHARASHTRA MANTRALIYA ITA NOS. 3475 & 3476/MUM/2018 4 AND FACTS BEING IDENTICAL, THE ORDER PASSED BY THE LD. CIT(A) BE CONFIRMED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IT IS FOUND THAT THE SAME ISSUE AROSE BEFORE THE TRIBUNAL IN THE APPEAL FILED BY THE R EVENUE FOR AY 2010 - 11. THE ITAT B BENCH, MUMBAI IN ASSESSEES OWN CASE FOR AY 2010 - 11 IN ITA NO. 5051/MUM/2013 HELD AS UNDER: 4. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISIONS BROUGHT TO OUR NOTICE. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. JAFARI MOMIN VIKAS CO - OP. CREDIT SOCIETY LTD. IN ITA NO S. 442 OF 2013 WITH 443 OF 2013 AND 863 OF 2013 HELD AS UNDER: 7. FROM THE ABOVE CLARIFICATION, IT CAN BE GATHERED THAT SUB - SECTION (4) OF SECTION 80P WILL NOT APPLY TO AN ASSESSEE WHICH IS NOT A CO - OPERATIVE BANK. IN THE CASE CLARIFIED BY CBDT, DELHI CO - OP. URBAN THRIFT & CREDIT SOCIETY LTD. WAS UNDER CONSIDERATION. CIRCULAR CLARIFIED THAT THE SAID ENTITY NOT BEING A CO - OPERATIVE BANK, SECTION 80P(4) OF THE ACT WOULD NOT APPLY TO IT. IN VIEW OF SUCH CLARIFICATION, WE CANNOT ENTERTAIN THE REVENUES CONTENTION THAT SECTION 80P(4) WOULD EXCLUDE NOT ONLY THE CO - OPERATIVE BANKS OTHER THAN THOSE FULFILLING THE DESCRIPTION CONTAINED O/TAXAP/442/2013 ORDER 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 - O PERATIVE SOCIETY. EXCLUSION CLAUSE OF SUB - SECTION (4) OF SECTION 80P, THEREFORE, WOULD NOT APPLY. IN THE RESULT, TAX APPEALS ARE DISMISSED. SIMILAR VIEW IS TAKEN BY THE TRIBUNALS MUMBAI BENCH IN THE CASE OF M/S. MUMBAI TELEWORKERS CO - OP. CREDIT SOCIETY LTD. IN ITA NO. 7106/MUM/2012 AND IN THE CASE OF M/S. KULSWAMI CO - OP. CREDIT SOCIETY LTD. IN ITA NO. 3223/MUM/2011 AND 505/MUM/2012. AS THE FACTS AND THE ISSUES ARE THE MAHARASHTRA MANTRALIYA ITA NOS. 3475 & 3476/MUM/2018 5 IDENTICAL TO THE FACTS AND ISSUES INVOLVED IN THE JUDICIAL DECISIONS REFERRED TO HEREINABOV E, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 7.1 FACTS BEING IDENTICAL, WE FOLLOW THE ABOVE ORDER OF THE CO - ORDINATE BENCH AND CONFIRM THE ORDER OF THE LD. CIT(A). ALSO FACTS BEING SIMILAR , OUR DECISION FOR THE AY 2012 - 13 APPLIES MUTATIS MUTANDIS TO AY 2013 - 14. 8. IN THE RESULT, THE APPEALS FILED BY THE R EVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/07/2019. SD/ - SD/ - (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI ; DATED: 10/07/2019 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI