The ITO, Thiruvalla V. M/s.Thrikkodithanam Service Co-op Bank Ltd, Changanacherry

ITA 40/COCH/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7465 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-02-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 13-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Assessee Lawyers: VENKITACHALAM
• Keywords: Reasonable cause

Judgement Text

ITA NO S 38 TO 40/C/2015 . 1 IN THE INCOME TAX APPEL L A TE T R IBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI B P JAIN , A M & G EORGE GEORGE.K , J M ITA NO S. 38 TO 40/COCH/2015 . (ASST YEAR S 2008 - 09, 2010 - 11 & 2011 - 12 ) THE INCOME TAX OFFICER, WARD 4, THIRUVALLA VS M/S THRIKKODITHANA SERVICE COOP ERATIVE BANK TD THRIKKODITHANAM PO CHANGANACHERRY ( APPELLANT) (RESPONDENT) PAN NO. AAATT6067A ASSESSEE BY SHRI M S VENKITACHALAM REVENUE BY SHRI K P GOPAKUMAR, SR DR DATE OF HEARING 11 TH FEB 201 6 DATE OF PRONOUNCEMENT 1 MARCH 2016 OR D ER PER BENCH : THESE THREE APPEALS, AT THE INSTANCE OF REVENUE , ARE DIRECTED AGAINST THE CONSOLIDATED ORDER DATED 1.9.2014 OF THE CIT(A), THIRUVANANTHAPURAM. THE RELEVANT ASSESSMENT YEARS ARE 2008 - 09, 2010 - 11 AND 2011 - 12 . 2 THERE WAS A DELAY OF 64 DAYS IN FILING THESE APPEALS. THE REVENUE HAS FILED A PETITION ALONG WITH AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY IN FILING THESE APPEALS BELATEDLY. 3 AFTER CONSIDERING THE PETITION AND THE AFFIDAVIT FILED BY THE REVENUE, WE ARE OF THE OPINION THAT THE RE WAS A REASONABLE CAUSE IN FILING THESE APPEALS ITA NO S 38 TO 40/C/2015 . 2 BELATEDLY. THEREFORE, WE CONDONE THE DELAY OF 64 DAYS IN FILING THESE APPEALS AND TAKEN UP THESE APPEALS FOR ADJUDICATION. 4 SINCE IDENTICAL ISSUES ARE INVOLVED IN THESE APPEALS AND THEY PERTAIN TO THE S AME ASSESSEE, THEY WERE HEARD TOGETHER AND DISPOSE OFF BY THIS CONSOLIDATED ORDER. 5 THE GROUNDS RAISED, IN ALL THE ASSESSMENT YEARS, ARE IDENTICAL AND THEY READ AS FOLLOWS: 1 THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), TRIVANDRUM , IN SO FAR AS THE POINTS STATED BELOW ARE CONCERNED, IS OPPOSED TO LAW ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO WORK OUT THE INCOME EARNED FROM 10ARIS AN D ADVANCES GIVEN FOR AGRICULTURAL PURPOSES AND GIVE DEDUCTION U/S 80P(2)(A)(I) OF THE ACT TO THAT EXTENT. 3. THE LD. CIT (A) HAS WRONGLY PLACED RELIANCE ON THE DECISION OF THE HON'BLE TRIBUNAL IN THE CASE OF KERALA STATE CO - OPERATIVE AGRICULTURAL RURAL DE VELOPMENT BANK LTD. IN ITA NO . 506/COCH/20LO & S . P . NO . 67/COCH/20LO DATED 23 - 02 - 2011 TO COME TO THE CONCLUSION THAT THE INCOME EARNED FROM LOANS AND ADVANCES GIVEN FOR AGRICULTURAL PURPOSE NEED BE EXEMPTED. 4. THE LD. CIT (A) OUGHT TO HAVE NOTED THAT THE A BOVE DE C ISION RENDERED B Y THE HON ' BLE TRIBUNAL IS APPLICABLE ONLY TO AGRICULTURAL RURAL DEVELOPMENT BANK AND NOT TO PRIMAR Y SERVICE CO - OPERATIVE SOCIETIES/BANKS. 5. THE HON'BLE TRIBUNAL IN ITS SEVERAL DECISIONS HAS HELD THAT AN ASSESSEE - SOCIETY, WHICH DOE S NOT SATISFY THE PRIMARY REQUIREMENT OF LENDING MONEY FOR AGRICULTURAL PURPOSES, IS NOT ENTITLED FOR EXEMPTION U / S 80P(2)(A)(I) OF THE ACT . 6. IN THE INSTANT CASE, WHEN THE LD. CIT (A) CAME TO A FINDING THAT THE ASSESSING OFFICER WAS JUSTIFIED IN DEN Y IN G THE BENEFIT OF SECTION 80P(2)(A)(I) ITA NO S 38 TO 40/C/2015 . 3 OF THE ACT , HE OUGHT NOT TO HAVE GIVEN A DIRECTION TO ALLOW BEN E FIT OF DEDUCTION TO THE E X TENT OF INCOME EARNED FROM PROVIDING LOANS FOR AGRICULTURAL PURPO SE S . WHEN THE PRIMAR Y OBJECT ITSELF IS NOT SATISFIED, SECTION 8 0P( 4) COMES INTO OPERATION A ND EVE N PARTIAL DEDUCTION IS UN J USTIFIED . 7. THE LD. CIT (A) HAS HELD IN PARA 8 (GROUND 5) OF HIS ORDER THAT ' THE APPELLANT HAD ALREADY BEEN PROVED TO BE NOT A PRIMARY AGRICULTURAL CREDIT CO - OPERATIVE SOCIETY AS SUBSTANTIAL AM OUNT OF LOAN WAS NOT GIVEN FOR AGRICULTURAL PURPOSE OR PURPOSES CONNECTED WITH AGRICULTURAL ACT I V I TIES AND THE INCOME EARNED BY THE APPELLANT ON ACCOUNT OF LOAN GIVEN FOR AGRICULTURAL PURPOSE OR ACTIVITIES IS MUCH LESS THAN THE LOAN GIVEN FOR NON - AGRICULT URAL PURPOSE'. IN S UCH A SITUATION , THE LD. CIT (A) OU G HT NOT TO HA V E ALLOWED EVEN PARTIAL DEDUCTION TO THE ASSESSEE - SO C IET Y WHICH IS FUNCTIONING AS A CO - OPERATIVE BANK AND HENCE, HIT BY THE PROVISIONS OF S E CTION 80P(4) OF THE ACT .. FOR THESE AND OTHER GR OUNDS THAT MAY BE ADVANCED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THE ABOVE POINTS MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MA Y BE RESTORED. 6 BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLO WS: THE ASSESSEE IS A COOPERATIVE SOCIETY ENGAGED PRIMARILY IN THE BUSINESS OF BANKING. FOR THE RELEVANT ASSESSMENT YEARS, THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80P(2) OF THE ACT. THE ASSESSMENTS WERE COMPLETED DENYING THE BENEFIT OF DEDUCTION U/S 80P(2 ) OF THE I T ACT. THE REASONING OF THE AO TO DENY THE BENEFIT OF DEDUCTION U/S 80P(2) WAS THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BANKING AND SUBSEQUENT TO INTRODUCTION OF SUB.SEC.(4) TO SECTION 80P OF THE ACT, THE ASSESSEE IS NOT ENTITLED TO THE BENEFIT OF DEDUCTION U/S 80P(2) OF THE ACT. 7 THE ASSESSEE BEING AGGRIEVED PREFERRED APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) PARTLY ALLOWED THE APPEALS OF THE ASSESSEE BY HOLDING THAT ITA NO S 38 TO 40/C/2015 . 4 ADVANCES MADE FOR AGRICULTURAL PURPOSES ARE ENTITLED T O THE BENEFIT OF DEDUCTION U/S 80P(2) OF THE ACT. 8 THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. AT THE VERY OUTSET, THE LD COUNSEL FOR THE ASSESSEE ADMITTED THAT THE ISSUE IN QUESTION IS COVERED BY THE ORDERS OF THE TRIBUNAL , AGAINST THE ASSESSEE IN THE CASES OF M/S KUNNAMANGALAM COOPERATIVE BANK VS ITO IN I TA NO. 156/COCH/20124 DATED 25.7.2014 AND M/S PINARAYI SERVICE COOPERATIVE BANK LTD VS ITO IN ITA NO . 123/COCH/2012 DATED 31.7.2014. THE LD DR, PRESENT WAS DULY HEARD. 9 WE HAVE HEARD THE RI VAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. T HE LD COUNSEL FOR THE ASSESSEE HAD SUBMITTED THAT T HE ISSUE IN QUESTION IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE ORDERS OF THE TRIBUNAL IN THE CASES OF M /S KUNNAMANGALAM CO - OPERATIVE BANK IN ITA NO. 156/COCH/20124 DATED 25.7.2014 FOR THE ASSESSMENT YEAR 2009 - 10 AND M/S PINARAYI SERVICE CO - OPERATIVE BANK LTD IN ITA NO. 123/COCH/2012 DATED 31.7.2014 FOR THE AY 2009 - 10 (SUPRA) . IN VIEW OF THE SUBMISSIONS OF THE LD AR, WE A RE NOT DELIBERATING MUCH O N THE FACTS OF THE CASE . THEREFORE, THE GROUNDS RAISED BY THE REVENUE ARE ALLOWED. IT IS ORDERED ACCORDINGLY. ITA NO S 38 TO 40/C/2015 . 5 10 IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF MARCH 2016 . SD/ - SD/ - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 1 ST MAR 2016 RAJ* COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT , 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN