The Poothady Service Co-op Bank Ltd, Wynad V. The ITO, Calicut

ITA 441/COCH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81407 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 08-10-2014
• Court: TRIBUNAL
• Department Lawyers: K K JOHN
• Assessee Lawyers: P RAGHUNATHAN
• Keywords: Reasonable cause; Condonation of delay
• Section: 142(1); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND CHANDRA POOJ ARI, AM I.T.A. NO. 441/COCH/2014 ASSESSMENT YEAR : 2010-11 THE POOTHADY SERVICE CO-OP BANK LTD., KENICHIRA, SULTHAN BATHERY, WAYANAD-673 596. [PAN: AADAT 1944J] VS. THE INCOME TAX OFFICER, WARD- 1(4), CALICUT. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) S.P. NO. 60/COCH/2014 (ARSG. OUT OF I.T.A. NO. 441/COCH/2014) ASSESSMENT YEAR : 2010-11 THE POOTHADY SERVICE CO-OP BANK LTD., KENICHIRA, SULTHAN BATHERY, WAYANAD-673 596. [PAN: AADAT 1944J] VS. THE INCOME TAX OFFICER, WARD- 1(4), CALICUT. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI P RAGHUNATHAN, ADV. REVENUE BY SHRI K.K.JOHN, SR. DR DATE OF HEARING 01/12/2014 DATE OF PRONOUNCEMENT 05/12/2014 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 27- 05-2014 PASSED BY THE CIT(A), KOZHIKODE FOR THE AS SESSMENT YEAR 2010-11. I.T.A. NO.441/COCH/2014 & S.P. NO.60/COCH/2014 2 2. THE ASSESSEE HAS ALSO FILED STAY PETITION SEEKIN G STAY OF OUTSTANDING DEMAND OF RS. 18,52,980/-. 3. THERE WAS A DELAY OF 44 DAYS IN FILING THE ABOVE APPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL. THE ASSESSEE HAS FILED A PETI TION SEEKING CONDONATION OF DELAY AND ALSO HAS FILED AN AFFIDAVIT EXPLAINING TH E REASONS FOR DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL WITHIN THE DUE DATE. TH E LD. AR SUBMITTED THAT THE APPELLATE ORDER WAS RECEIVED ON L 8-06-2014 WHICH W AS BASED ON THE ORDER PASSED IN THE CASE OF KARIVALLUR SERVICE CO-OPERATI VE BANK LTD. AND THEREFORE THERE WAS DELAY IN STUDYING THE DETAILS OF THE ASSE SSMENT CARRIED OUT IN THE ABOVE SOCIETY. AFTER THE FINAL OPINION WAS RECEIVE D, THE COUNSELS PREPARED THE APPEAL TO BE FILED BEFORE THE TRIBUNAL ALONG WITH A PPLICATIONS FOR STAY AND CONDONATION OF DELAY IN FILING THE APPEAL WHICH CAU SED THE DELAY. IN THE MEANWHILE, THERE WERE INTERVENING HOLIDAYS AND ACCO RDINGLY, THE FINAL APPEAL AND APPLICATIONS WERE FILED ON 8 TH OCTOBER, 2014. HENCE, THE DELAY IN FILING THE APPEAL. THEREFORE, ACCORDING TO THE LD. AR, THE DE LAY WAS OCCASIONED ONLY BECAUSE OF THE DELAY IN PROCESSING AND TAKING THE F INAL DECISION IN THE MATTER AND THE DELAY WAS NEITHER WILLFUL NOR DELIBERATE. ACCORDING TO THE LD. AR, THE ASSESSEE WILL BE PUT TO IRREPARABLE LOSS AND INJURY IF THE DELAY IS NOT CONDONED. 4. THE LD. DR HAS NOT RAISED ANY SERIOUS OBJECT ION FOR CONDONATION OF DELAY IN FILING THE APPEAL BY THE ASSESSEE. I.T.A. NO.441/COCH/2014 & S.P. NO.60/COCH/2014 3 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E RECORD. WE FIND THAT THERE EXISTS REASONABLE CAUSE FOR NOT FILING THE AP PEAL IN TIME AND THE REASONS ADVANCED BY THE ASSESSEE FOR THE DELAY ARE BONA FID E. BEING SO, WE CONDONE THE DELAY IN FILING THE APPEAL BY THE ASSESSEE AND ADMIT THE APPEAL FOR ADJUDICATION. 6. THE ONLY ISSUE IN THIS APPEAL IS WITH REGARD TO DENIAL OF DEDUCTION U/S. 80P OF THE ACT BY INVOKING THE PROVISIONS OF SEC. 8 0A(5) OF THE ACT. 7 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO-OPERATIVE BANK REGISTERED UNDER THE KERALA CO-OPERATIVE SOCIETIES ACT, 1969. SINCE THE ASSESSEE HAD FAILED TO FILE RETURN OF INCOME FOR TH E ASSESSMENT YEAR 2010-11, THE ASSESSING OFFICER ISSUED NOTICE U/S. 142(1) REQ UIRING THE ASSESSEE TO FILE THE RETURN OF INCOME. HOWEVER, THE ASSESSEE NEITHE R COMPLIED WITH THIS NOTICE NOR FILED RETURN OF INCOME IN TERMS OF SEC. 139(1) OR 139)4) OF THE ACT AND HENCE, THE ASSESSING OFFICER PROCEEDED TO INITI ATE BEST JUDGMENT ASSESSMENT U/S. 144 OF THE ACT AS PER THE NOTICE IS SUED U/S. 142(1) OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER CALLED FOR DETAILS BY ISSUING NOTICE U/S. 142(1)(II) OF THE ACT. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSEE FILED RETURN OF INCOME ON 28-09-2012, WHIC H WAS BEYOND THE TIME LIMIT PRESCRIBED U/S. 139(4) OF THE ACT AND, THEREF ORE, THE ASSESSING OFFICER I.T.A. NO.441/COCH/2014 & S.P. NO.60/COCH/2014 4 TREATED THE SAME AS INVALID. ON THE BASIS OF MATER IALS GATHERED DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER WORKED OUT THE TOTAL INCOME OF THE ASSESSEE FROM BUSINESS AT RS.57,72,818/-. WHIL E COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER DISALLOWED THE CL AIM OF DEDUCTION U/S. 80P BY INVOKING THE PROVISIONS OF SECTION 80A(5). 8. ON APPEAL, THE CIT(A) BY RELYING ON HIS EARLIER DECISION IN THE CASE OF M/S. KARIVELLUR SERVICE CO-OPERATIVE BANK LTD. FOR ASSESSMENT YEAR 2009-10 VIDE ORDER DATED 21/09/2012, DISMISSED THIS GROUND IN THIS CASE ALSO AS THE FACTUAL MATRIX WAS SAME IN BOTH THE CASES. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 9. THE LD. AR SUBMITTED THAT THE ASSESSEE IS A PRI MARY AGRICULTURAL CREDIT SOCIETY AS DEFINED IN PART V OF BANKING REGU LATIONS ACT, 1949 AND IS REGISTERED UNDER THE PROVISIONS OF KERALA CO-OPERAT IVE SOCIETIES ACT. ACCORDING TO THE LD. AR THE ACTIVITIES OF THE SOCIE TY ARE ADMINISTERED AND LOOKED AFTER BY A BOARD OF DIRECTORS ELECTED FROM T HE MEMBERS OF THE SOCIETY AND IS SUBJECT TO SUPERVISION BY STATUTORY AUTHORIT IES LIKE THE REGISTRAR OF CO- OP SOCIETIES. THE LD. AR SUBMITTED THAT THE PRIMAR Y AND PRINCIPAL OBJECT OF THE SOCIETY IS PROVIDING FINANCIAL ACCOMMODATION TO ITS MEMBERS FOR AGRICULTURAL PURPOSES AND PURPOSES CONNECTED WITH A GRICULTURAL OPERATIONS. THE LD. AR SUBMITTED THAT BEING AN AGRICULTURAL CRE DIT SOCIETY, THE ASSESSEE IS I.T.A. NO.441/COCH/2014 & S.P. NO.60/COCH/2014 5 EXEMPTED FROM THE PROVISIONS OF INCOME TAX ACT AND HENCE HAD NOT BEEN FILING THE RETURN OF INCOME. HOWEVER, THE ASSESSIN G OFFICER ISSUED NOTICE U/S. 142(1) ON 07-02-2010 AND THE ASSESSEE COULD NOT UPD ATE THE ACCOUNTS FOR THE YEAR ENDED 31/03/2010 FOR WANT OF COMPLETION OF AUDIT AND HENCE SOUGHT TIME FOR FILING RETURN. ACCORDING TO THE LD. AR, T HE ASSESSING OFFICER GRANTED TIME UPTO 25/09/2012 AND THE FINAL RETURN WAS FILED ON 28-09-2012 IN WHICH THE ASSESSEE CLAIMED EXEMPTION U/S. 80P OF THE ACT. 10. HOWEVER, ACCORDING TO THE LD. AR, THE ASSESSING OFFICER TREATED THE RETURN FILED AS ABOVE WAS NON-EST BY HOLDING THAT T HE RETURN SHOULD HAVE BEEN FILED WITHIN THE TIME ALLOWED U/S. 139(1) AND/ PR (4) OF THE ACT AND SUBSEQUENTLY PASSED ORDERS UNDER SEC. 144 OF THE AC T DETERMINING THE NET TAXABLE INCOME OF THE ASSESSEE AT RS. 5772818/- AND INTEREST AMOUNTING TO RS.2755980/-. HENCE, THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER REJECTED THE ASSESSEES CLAIM OF EXEMPTION U/S. 80P OF THE ACT. 11. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF THE LOWER AUTHORITIES. 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. WE FIND THAT A SIMILAR CAME UP FOR CONSIDERATION BEFORE THE TRIB UNAL IN THE CASE OF RAMANTHALI SERVICE CO-OPERATIVE BANK LTD. VS. ITO I N I.T.A. NO. I.T.A. NO.441/COCH/2014 & S.P. NO.60/COCH/2014 6 361/COCH/2012 DATED 21/11/2014. THE RELEVANT PORT ION OF THE OBSERVATIONS OF THE TRIBUNAL IS EXTRACTED BELOW: 4. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME WITHIN THE TIME ALLOWED EITHER U/S 139(1) OR 139(4) OR WITHIN THE TIME ALLOWED BY THE ASSESSING OFFICER U/S 142(1) OF THE ACT. THIS TRIBUNAL, IN THE CASE OF M/S KADACHIRA SERVICE CO-O PERATIVE BANK LTD & ORS VS ITO (2013) 153 TTJ (COCHIN) 129 AFTER CONS IDERING THE PROVISIONS OF SECTION 80A(5) AND THE JUDGMENT OF TH E APEX COURT IN PRAKASH NATH KHANNA & ANOTHER VS CIT (2004) 266 ITR 1 (SC) FOUND THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 80P UNLESS RETURN IS FILED EITHER U/S 139(1) OR 139(4) OR WITHIN THE TIM E PROVIDED BY THE ASSESSEE IN THE NOTICE ISSUED U/S 142(1) OF THE ACT OR U/S 148 OF THE ACT AND A CLAIM WAS MADE FOR DEDUCTION U/S 80P OF T HE ACT. IN VIEW OF THE ABOVE, , THIS TRIBUNAL DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE LOWER AUTHORITY. 13 TO BE CONSISTENT WITH THE VIEW TAKEN BY THE TRIB UNAL, WE ARE INCLINED TO DISMISS THIS GROUND OF THE ASSESSEE. 14. SINCE WE HAVE DECIDED THIS ISSUE AGAINST THE AS SESSEE, THE STAY PETITION FILED BY THE ASSESSEE HAS BECOME INFRUCTUO US. BEING SO, THE STAY PETITION FILED BY THE ASSESSEE IS DISMISSED AS INFR UCTUOUS. 15. IN THE RESULT, BOTH THE APPEAL AND THE STAY PET ITION FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 5-12-2014 SD/- SD/- (N.R.S.GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 5TH DECEMBER, 2014 I.T.A. NO.441/COCH/2014 & S.P. NO.60/COCH/2014 7 GJ COPY TO: 1. THE POOTHADY SERVICE CO-OP BANK LTD., KENICHIRA, SULTHAN BATHERY, WAYANAD-673 596. 2. THE INCOME TAX OFFICER, WARD-1(4), CALICUT. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS), KOZHIKO DE. 4. THE COMMISSIONER OF INCOME-TAX, KOZHIKODE. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN