M/s.Regional Oilseeds Growers Co-operative Societies Union Limited, Chitradurga V. Joint Commissioner of Income-Tax, Davangere

ITA 360/BANG/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0227 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 17-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 80P; 148

Judgement Text

ITA.360/BANG/2017 PAGE -1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.360/BANG/2017 (ASSESSMENT YEAR : 2010-11) M/S. REGIONAL OILSEEDS GROWERS COOPERATIVE SOCIETIE S UNON LTD, PLOT NO.74/A, KIADB INDUSTRIAL AREA, KELAGOTE, CHITRADURGA 577501 .. APPELLANT PAN : AACFR0370E V. JOINT COMMISSIONER OF INCOME-TAX, DAVANGERE RANGE, DAVANGERE .. RESPONDENT ASSESSEE BY : SHRI. SANDEEP C, CA REVENUE BY : SMT / SHRI. KAPILA H, JCIT HEARD ON : 26.03.2019 PRONOUNCED ON : 29.03.2019 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE ASSESSEE, AGAIN ST THE ORDER OF THE CIT (A), GULBARGA, DT.29.12.2016, FOR THE AS SESSMENT YEAR 2010-11, ON THE FOLLOWING GROUNDS OF APPEAL : ITA.360/BANG/2017 PAGE -2 02. IT WAS SUBMITTED BY THE LD. AR THAT THE TRIBUNA L VIDE ORDER DT.05.09.2018 IN ITA NOS.1352 TO 1355/BANG/2016, HA D DECIDED THE QUANTUM APPEAL IN FAVOUR OF THE ASSESSEE, WHEREIN A T PARAS 6.2 AND 6.3, IT WAS HELD AS UNDER : 6.1 ON THE SUBSTANTIVE ISSUE OF THE DISALLOWANCE OF THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 8OP OF THE ACT, SINCE THE JURISDICTIONAL ISSUES, NAMELY NON-FURNISH ING OF REASONS RECORDED, VALIDITY OF ISSUED NOTICES ISSUED UNDER SECTION 148 OF THE ACT AND VALIDITY OF ASSUMPTION O F JURISDICTION BY THE JCIT IN PASSING THE IMPUGNED OR DERS OF ASSESSMENT HAVE BEEN REMANDED BACK TO THE FILE OF T HE ASSESSING OFFICER FOR FRESH CONSIDERATION, IN OUR CONSIDERED VIEW, ADJUDICATION ON THE SUBSTANTIVE ISSUE IN THE APPEAL S AT THIS STAGE WOULD BE PREMATURE. IF THE ISSUE OF NOTICE AN D PASSING OF ORDERS FAIL TO PASS THE TEST, IN THE LIGHT OF OU R DIRECTIONS ISSUED ABOVE, THE IMPUGNED ORDERS OF ASSESSMENT, HA VING NO LEGS TO STAND ON, WILL FAIL AND CONSEQUENTLY SO TOO WITH THE DISALLOWANCES MADE. WE, THEREFORE, REFRAIN FROM ADJ UDICATING ON THE SUBSTANTIVE ISSUE OF ALLOWABILITY OF THE ASS ESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80P OF THE ACT. 6.2 IT MAY HOWEVER BE MENTIONED THAT THE ASSESSING OFFICER HAS DISALLOWED THE ASSESSEES CLAIM FOR DED UCTION UNDER SECTION 8OP OF THE ACT, INTER ALIA, ON THE IS SUE THAT THE ASSESSEE IS A FEDERATION OF SOCIETIES AND OTHER MEM BERS AND ITA.360/BANG/2017 PAGE -3 HENCE THE CONCEPT OF WHO CONSTITUTE 'MEMBERS' IS VE RY RELEVANT. WE ALSO OBSERVE THAT THE ASSESSING OFFICE R, HAS RENDERED A FINDING THAT THE SALES ARE MADE TO A G ENCIES OTHER THAN MEMBERS, BY INVOKING THE PRINCIPLE OF MUTUALIT Y. WE FIND THAT THE HONBLE APEX COURT IN THE CASE OF CIT IZEN CO- OPERATIVE SOCIETY LTD. (397 ITR 1) (SC), IN THE CON TEXT OF CREDIT CO-OPERATIVE SOCIETIES HAS RULED ON THESE TWO PRINC IPLES WHITE DECIDING THE ISSUE OF DEDUCTION UNDER SECTION SOP O F THE ACT. THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE PRINCIPLES ENUNCIATED IN THE AFORESAID DECISION OF THE HON'BLE APEX COURT (SUPRA) WHILE PASSING ORDERS, AFTER CONS IDERING THE JURISDICTIONAL ISSUES REMANDED BACK. 03. ON THE BASIS OF THE ABOVE, IT WAS SUBMITTED THA T THE ACTION OF THE AO TO LEVY PENALTY NO MORE SUBSISTS BECAUSE THE QUANTUM ADDITION HAS ALREADY BEEN SET ASIDE AND REMANDED BA CK TO THE AO. THEREFORE THE PENALTY PROCEEDINGS PENDING BEFORE TH IS TRIBUNAL IS ALSO REQUIRED TO BE SET ASIDE. 04. PER CONTRA, THE LD. DR RELIES ON THE ORDERS OF THE LOWER AUTHORITIES. 05. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE PENALTY PROCEEDINGS WERE INITIATED ON THE BASIS OF THE ORDER PASSED BY THE AO, WHEREBY THE AO HAD MADE THE ADDITION AND THEREAFTER HAD RECOMMENDED FOR IMPOSITION OF PE NALTY U/S.271(1)(C) OF THE ACT, OF RS.6,65,805/-, FOR FUR NISHING INACCURATE PARTICULARS OF INCOME. SINCE THE ORDER BY WHICH TH E QUANTUM WAS ADDED AND THE AO CAME TO THE CONCLUSION THAT THE AS SESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME CEASES T O EXIST, ON ACCOUNT OF BEING SET ASIDE BY THE TRIBUNAL, THE INI TIAL CAUSE OF LEVY OF PENALTY DOES NOT EXIST, WE HAVE NO HESITATION T O DELETE THE ITA.360/BANG/2017 PAGE -4 PENALTY PURSUANT TO ORDER PASSED BY THE AO DT.05.02 .2014. HOWEVER IT WILL BE OPEN FOR THE AO TO INITIATE THE PENALTY PROCEEDINGS. IN CASE IN THE REMAND PROCEEDINGS THE AO COMES TO A CONCLUSION THAT THIS IS A CASE FOR IMPOSITION OF PE NALTY AS THE ASSESSEE HAS EITHER FILED INACCURATE PARTICULARS OF INCOME OR HAD CONCEALED THE INCOME, PENALTY PROCEEDINGS MAY BE IN ITIATED AGAIN IN ACCORDANCE WITH LAW. 06. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF MARCH, 2019. SD/- SD/- (A. K. GARODIA) ( LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : 29.03.2019 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.