Assistant Commissioner of Income-tax, V. Shivneri Nagari Sahakari Pat Sanstha Maryadit, Kolhapur

ITA 350/PUN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7673 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-04-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 04-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , ! , ' # BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NOS. 345 TO 350/PUN/2016 '% & '& / ASSESSMENT YEARS: 2006-07 TO 2011-12 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. ....... / APPELLANT (% / V/S. SHIVNERI NAGARI SAHAKARI PATSANTHA MARYADIT, R.M. MOHITE BHAVAN, 451/1/B, E-WARD, NEAR USHA TALKIES, SHAHUPURI, KOLHAPUR-416 001 PAN : AAAAS1172L / RESPONDENT REVENUE BY : SHRI AJAY MODI ASSESSEE BY : NONE / DATE OF HEARING : 17.04.2018 / DATE OF PRONOUNCEMENT : 18.04.2018 ) / ORDER PER VIKAS AWASTHY, JM THIS BUNCH OF APPEALS FILED BY REVENUE ARE DIRECTED AGAINS T THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), PUNE-11 DATED 04.12.2 015 COMMON FOR THE ASSESSMENT YEARS 2006-07 TO 2011-12. 2 ITA NOS.345 TO 350/PUN/2016 A.YS.2006-07 TO 2011-12 2. NOTICE OF APPEAL WAS SENT TO THE ASSESSEE THROUGH R PAD ON THE ADDRESS MENTIONED IN FORM-36. ACKNOWLEDGEMENT ON RECORD CLEARLY INDICATES THAT THE NOTICE WAS DULY SERVED ON THE ASSESSEE. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHALF OF THE ASSESSEE. IT SEEMS THAT ASSES SEE IS NOT INTERESTED IN PURSUING THE APPEALS. UNDER SUCH CIRCUMSTANCES, WE PROCE ED TO DECIDE THESE APPEALS ON THE BASIS OF SUBMISSIONS MADE BY THE LD. DR AND MATERIAL AVAILABLE ON RECORD. SINCE, THE ISSUES INVOLVED IN ALL THE SIX APPEALS ARE SIMILA R AND ARE ARISING FROM SAME SET OF FACTS, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DISPOSED OF VIDE THIS COMMON ORDER. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE IS A CO-OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROVIDIN G CREDIT FACILITIES TO ITS MEMBERS. A SEARCH ACTION U/S.132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS CONDUCTED AT THE BUSINES S AND RESIDENTIAL PREMISES OF SHRI RAMCHANDRA MARUTI MOHITE ON 25/08/2011 & 26/08/ 2011. THE ASSESSEE BEING RELATED TO SHRI RAMCHANDRA MARUTI MOHITE WAS ALSO COVERED UNDER SEARCH PROCEEDINGS. ASSESSMENTS IN THE CASE OF T HE ASSESSEE WERE COMPLETED U/S.153C R.W.S 143(3) OF THE ACT. IN THE ASSESSMENT PROC EEDINGS, THE ASSESSING OFFICER DENIED THE BENEFIT OF DEDUCTION CLAIMED U/S .80P(2)(A)(I) OF THE ACT TO THE EXTENT OF INTEREST INCOME EARNED ON DEPOSIT OF SURPLUS FUNDS WITH THE BANKS OTHER THAN CO-OPERATIVE CREDIT SOCIETY/ CO-OPERATIVE BAN KS. 4. AGGRIEVED BY THE ADDITION MADE BY ASSESSING OFFICER, THE ASSESSE E CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TA X (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE COMPOSITE ORDER F OR THE ASSESSMENT YEARS 2006-07 TO 2011-12 DELETED THE ADDITION U/S. 80P(2 )(A)(I) OF THE ACT IN 3 ITA NOS.345 TO 350/PUN/2016 A.YS.2006-07 TO 2011-12 RESPECT OF INTEREST INCOME EARNED FROM DEPOSITS OF SURPLU S FUND WITH THE BANKS OTHER THAN CO-OPERATIVE CREDIT SOCIETY/ CO-OPERATIVE BA NKS. NOW, THE REVENUE IS IN SECOND APPEAL BEFORE TRIBUNAL. THE GROUNDS RAISED BY REVENUE IN ASSESSMENT YEAR 2006-07 READS AS UNDER: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING THE DEDUCTION UNDER SE CTION 80P(2)(A)(I) OF THE INCOME TAX ACT, 1961 TO THE ASSESSEE WITHOUT APPREC IATING THAT THE DEDUCTION UNDER SECTION 80P(2)(A)(I) HAS BEEN CLAIM ED BY THE ASSESSEE ON INCOME OF RS. 80,29,000/- (TAX EFFECT RS. 26,46,529/-) WHICH HAS BEEN EARNED BY INVESTING THE SURPLUS FUNDS I.E. FUNDS WH ICH WERE NOT REQUIRED FOR THE BUSINESS NEEDS OF THE ASSESSEE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN NOT APPLYING THE RATIO LAID DOWN BY THE HO N'BLE APEX COURT IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCIETY LTD. VS. ITO REPORTED IN (2010) 229 CTR 229 (SC) TO THE PRESENT CASE? IDENTICAL GROUNDS HAVE BEEN RAISED BY THE REVENUE IN OT HER ASSESSMENT YEARS. EXCEPT FOR VARIATION IN THE AMOUNT OF DISALLOWANCE U/ S. 80P(2) OF THE ACT, THERE IS NO OTHER CHANGE IN THE GROUNDS RAISED BY REVENUE IN ALL THE ASSESSMENT YEARS. 5. SHRI AJAY MODI REPRESENTING THE DEPARTMENT SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRANTED RELIEF TO THE ASSESSEE BY PLACING RELIANCE ON THE DECISIONS OF PUNE BENCH OF TRIBUNAL IN THE CASE OF SHIVNERI NAGARI SAH. PAT SANSTHA MARYADIT VS. ITO IN ITA N O.2223/PN/2013 FOR THE ASSESSMENT YEAR 2009-10 DECIDED ON 31.10.2014. T HE TRIBUNAL WHILE DECIDING THE ISSUE IN FAVOUR OF ASSESSEE IN ITA NO. 2223 /PN/2013 (SUPRA.) HAS IN TURN PLACED RELIANCE ON ANOTHER DECISION OF PUNE BENCH OF TRIBUNAL IN THE CASE OF ITO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. IN ITA NO.1336/PN/2011 FOR THE ASSESSMENT YEAR 2008-09 DECIDED ON 31 .07.2013. 4 ITA NOS.345 TO 350/PUN/2016 A.YS.2006-07 TO 2011-12 6. THE LD. DR POINTED THAT A PERUSAL OF PARA-7 OF THE IMPU GNED ORDER WOULD SHOW THAT COMMISSIONER OF INCOME TAX (APPEALS) WHILE GRANTIN G RELIEF TO THE ASSESSEE, WAS UNDER IMPRESSION THAT ITA NO.2223/PN/2013 (SUPRA.) IS ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10. WHER EAS, FOR ASSESSMENT YEAR 2009-10, THE ASSESSEE WAS IN APPEAL BEFORE THE COM MISSIONER OF INCOME TAX (APPEALS). HOWEVER, NAME OF THE ASSESSEE CLOSELY RESE MBLES WITH THE ASSESSEE IN ITA NO. 2223/PUN/2013 (SUPRA). THE PAN OF PR ESENT ASSESSEE AND PAN OF ASSESSEE IN ITA NO. 2223/PUN/2013 (SUPRA) ARE DIFFE RENT. THUS, THE ORDER OF TRIBUNAL IN ITA NO.2223/PUN/2013 (SUPRA) IS NOT IN THE CAS E OF CASE. 6.1 THE LD. DR SUBMITTED THAT THE TRIBUNAL IN THE CASE OF I TO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD.(SUPRA) HAS DISTINGUISHED TH E JUDGMENT OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF TOTGARS CO- OPERATIVE SALE SOCIETY LTD. VS. ITO REPORTED AS 322 ITR 283. WHEREAS, THE HON' BLE DELHI HIGH COURT IN THE CASE OF MANTOLA CO-OPERATIVE THRIFT & CREDIT SOCIETY LTD. VS. COMMISSIONER OF INCOME-TAX REPORTED AS 229 TAXMAN 68 ( DELHI) AND THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF STATE BANK O F INDIA (SBI) VS. COMMISSIONER OF INCOME TAX REPORTED AS 389 ITR 578, HA S HELD THAT THE SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS , EARNING INTEREST, INCOME ON DEPOSIT OF SURPLUS FUNDS IN BANKS, IS NOT DEDUCT ABLE U/S. 80P(2) OF THE ACT. IN BOTH THE DECISIONS, JUDGMENT OF HON'BLE SUPRE ME COURT OF INDIA IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCIETY LTD. VS. IT O (SUPRA.) HAS BEEN FOLLOWED. 7. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LD. DR AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE SOLITARY ISSUE RAISED B Y REVENUE IN ALL THESE APPEALS IS AGAINST ALLOWING OF BENEFIT OF DEDUCTION U/S.8 0P(2)(A)(I) OF THE ACT ON INTEREST INCOME EARNED FROM DEPOSITS OF SURPLUS FUN D WITH THE BANKS 5 ITA NOS.345 TO 350/PUN/2016 A.YS.2006-07 TO 2011-12 OTHER THAN CO-OPERATIVE CREDIT SOCIETY/ CO-OPERATIVE BA NKS. THE ASSESSING OFFICER MADE DISALLOWANCE IN RESPECT OF INTEREST INCOME ON DE POSIT OF SURPLUS FUNDS WITH THE BANKS IN THE ASSESSMENT YEARS UNDER APPEAL ARE A S UNDER: 8. THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE AD DITIONS BY PLACING RELIANCE ON THE DECISION IN THE CASE OF SHIVNERI NAGA RI SAH. PAT SANSTHA MARYADIT VS. ITO (SUPRA). WE FIND, THE CO-ORDINATE BENCH OF TRIBUNAL IN THE AFORESAID CASE FOLLOWED THE ORDER OF PUNE BENCH OF TRIBUNAL IN THE CASE OF ITO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA.) AND HELD THE ASSESSEE ELIGIBLE FOR CLAIMING DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT ON THE IN TEREST INCOME RECEIVED FROM BANKS. THE COMMISSIONER OF INCOME TAX (APPE ALS) IN TURN FOLLOWING THE ORDER OF TRIBUNAL GRANTED RELIEF TO THE ASSESSEE. 9. THE LD. AR OF THE ASSESSEE HAS BROUGHT TO OUR NOTICE THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF MANTOLA CO-OPERAT IVE THRIFT & CREDIT SOCIETY LTD. VS. COMMISSIONER OF INCOME-TAX (SUPRA.) WHEREIN UNDER SIMILAR CIRCUMSTANCES THE INTEREST INCOME EARNED BY A CO-OPERA TIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS WAS HELD INELIGIBLE FOR CLAIMING DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. SIMILAR VIEW HAS BEEN TAK EN BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF STATE BANK OF INDIA(SBI) VS. ASST. YEARS 80P CLAIMED INTEREST TAXED BY THE AO 2006-07 30,84,981 80,29,199 2007-08 25,65,320 60,23,302 2008-09 15,57,023 87,09,874 2009-10 - 60,86,519 2010-11 15,52,277 59,58,304 2011-12 29,94,545 44,70,543 6 ITA NOS.345 TO 350/PUN/2016 A.YS.2006-07 TO 2011-12 COMMISSIONER OF INCOME TAX (SUPRA.). BOTH THESE JUDGMENTS ARE SUBSEQUENT TO THE ORDER OF TRIBUNAL IN THE CASE OF ITO VS. NIPHAD NAGAR I SAHAKARI PATSANSTHA LTD. (SUPRA.). IT WOULD BE RELEVANT TO MENTION THAT THE HON'BLE DELHI H IGH COURT AND HON'BLE GUJARAT HIGH COURT WHILE HOLDING THE ASSESSEE IN ELIGIBLE FOR CLAIMING DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT, HAVE FOLLOWED THE JUDGME NT OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF TOTGARS CO-OPERAT IVE SALE SOCIETY LTD. VS. ITO (SUPRA.). WE, FURTHER, OBSERVE THAT THE DECISION OF H ON'BLE DELHI HIGH COURT THOUGH RENDERED PRIOR TO THE PASSING OF IMPUGNED ORDER, WAS NOT CONSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEALS). TH US, WE ARE OF CONSIDERED VIEW THAT THIS ISSUE NEEDS REVISIT TO THE FILE O F COMMISSIONER OF INCOME TAX(APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS ) SHALL DECIDE THIS ISSUE DE-NOVO AFTER EXAMINING THE APPLICABILITY OF DECISION RENDERED BY HON'BLE DELHI HIGH COURT IN THE CASE OF MANTOLA CO-OPERAT IVE THRIFT & CREDIT SOCIETY LTD. VS. COMMISSIONER OF INCOME-TAX (SUPRA.) TO THE CASE OF ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) BEFORE DECIDING THIS ISSUE SHALL AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH LAW. ACCORDINGLY, APPEALS OF THE REVENUE ARE ALLOWED FOR STA TISTICAL PURPOSE IN THE TERMS AFORESAID. 10. IN THE RESULT, APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PU RPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 18 TH DAY OF APRIL, 2018. SD/- SD/- ( . / D. KARUNAKARA RAO ) ( ! /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 18 TH APRIL, 2018 SB 7 ITA NOS.345 TO 350/PUN/2016 A.YS.2006-07 TO 2011-12 ) * +',- . ', / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS), PUNE-11. 4. THE PR. CIT (CENTRAL), PUNE. 5. %&' () , * () , +,- , / DR, ITAT, A BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY // *2 / BY ORDER, 3 (- /PRIVATE SECRETARY * () , / ITAT, PUNE.