M/s Graduates Co-operative Credit Society Ltd , Bangalore V. Income Tax Officer Ward-6(2)(1), Bangalore

ITA 462/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4829 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 19-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKAS SURYAVANSHI
• Assessee Lawyers: SHIVA SHANKAR T S
• Keywords: Opportunity of being heard
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO S . 461 & 462 / BANG/201 8 ASSESSMENT YEAR S : 2009 - 10 & 2010 - 11 M/S. GRADUATES CO-OPERATIVE CREDIT SOCIETY LTD., NO. 1, 1 ST B ROAD, 4 TH MAIN ROAD, PAPAIAH GARDEN, BASAVESHWARA NAGAR, BANGALORE 560 079. PAN: AAAJB0572A VS. THE INCOME TAX OFFICER, WARD 6 (2) (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI SHIVASHANKAR T.S., CA RESPONDENT BY : SHRI VIKAS SURYAVANSHI , ADDL. CIT (DR) DATE OF HEARING : 0 4 . 0 4 .2018 DATE OF PRONOUNCEMENT : 11 . 0 4 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND TH ESE ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF CIT(A)-1, BANGALORE BOTH DAT ED 30.11.2017 FOR ASSESSMENT YEARS 2009-10 AND 2010-11. BOTH THESE A PPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2009-10 IN ITA NO. 461/BANG/2018 ARE AS UNDER. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A)-I, BANGALORE HAS GROSSLY ERRED IN DI SMISSING THE APPEAL FILED BY THE APPELLANT. 2. LEARNED CIT (A) -I BANGALORE IS GROSSLY ERRED IN THE DIFFERENTIATING THE DEFINITIONS AND APPLICABILITY OF THE 80P(2)(A)( I) AND 80P(4) OF INCOME TAX ACT., DISALLOWED THE CLAIM OF THE DEDUCT ION UNDER SECTION 80P(2)(A)(I) BY CONSIDERING THE APPELLANT IS A CO-O PERATIVE BANK, BY ITA NOS. 461 & 462/BANG/2018 PAGE 2 OF 4 READING SECTION 80(P)((2)(A)(I) TOGETHER WITH THE S ECTION 80P(4). WRONGLY CONSIDERING SECTION 80(P)(2)(A)(I) IS APPLI CABLE ONLY FOR PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO -OPERATIVE AGRICULTURAL & RURAL DEVELOPMENT BANK. 3. AS PER THE PROVISIONS OF THE SECTION 80P(2)(A)(I ) OF THE INCOME TAX ACT, WHICH IS REPRODUCED BELOW: 80P. DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOCIETIES. (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A CO-OP ERATIVE SOCIETY, THE GROSS TOTALINCOME INCLUDES ANY INCOME REFERRED TO I N SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUB JECT TO THE PROVISIONS OF THIS SECTION, THESUMS SPECIFIED IN SU B-SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL B E THE FOLLOWING, NAMELY : (A) IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED I N (I) CARRYING ON THE BUSINESS OF BANKING OR PROVIDIN G CREDIT FACILITIES TO ITS MEMBERS. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE ASSESSING OFFICERERRED IN READING THE SECTION 80(P) (2)(A)(I) WITHOUT APPRECIATING THAT ALL ITS MEMBERS ARE GRADUATES. 4. LEARNED CIT(A) -I BANGALORE, GROSSLY ERRED IN RE ADING THE SECTION 80(P)(2)(A)(I) WITHOUT APPRECIATING THAT ALL ITS ME MBERS ARE GRADUATES WHO ARE RESIDING WITHIN THE JURISDICTION AS SPECIFI ED IN THE BYE LAWS OF CREDIT SOCIETY. A CREDIT CO-OPERATIVE SOCIETY FORME D FOR EXCLUSIVE BENEFITS OF THE GRADUATES. 5. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 12,84,180/- IN RESPECT OF THE INCOME DERIVED FROM THE ACTIVITIES O F THE APPELLANT ENGAGED IN CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CR EDIT FACILITIES TO ITS MEMBERS. 6. THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDE NCE TO SUBSTANTIATE HIS CASE. 7. THE APPELLANT PRAYS LEAVE TO ADD, ALTER, CLARIFY AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCA SION DEMANDS. 3. THE GROUNDS RAISED BY THE ASSESSEE FOR ASSESSMEN T YEAR 2010-11 IN ITA NO. 462/BANG/2018 ARE AS UNDER. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A)-I, BANGALORE HAS GROSSLY ERRED IN DI SMISSING THE APPEAL FILED BY THE APPELLANT. ITA NOS. 461 & 462/BANG/2018 PAGE 3 OF 4 2. LEARNED CIT (A) -I BANGALORE IS GROSSLY ERRED IN THE DIFFERENTIATING THE DEFINITIONS AND APPLICABILITY O F THE 80P(2)(A)(I) AND 80P(4) OF INCOME TAX ACT., DISALLO WED THE CLAIM OF THE DEDUCTION UNDER SECTION 80P(2)(A)(I) BY CONS IDERING THE APPELLANT IS A CO-OPERATIVE BANK, BY READING SECTIO N 80(P)((2)(A)(I) TOGETHER WITH THE SECTION 80P(4). W RONGLY CONSIDERING SECTION 80(P)(2)(A)(I) IS APPLICABLE ON LY FOR PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATI VE AGRICULTURAL & RURAL DEVELOPMENT BANK. 3. AS PER THE PROVISIONS OF THE SECTION 80P(2)(A)(I ) OF THE INCOME TAX ACT, WHICH IS REPRODUCED BELOW: 80P. DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOCIETIES. (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A CO-OPERAT IVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB- SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUB- SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE A SSESSEE. (2) THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL BE TH E FOLLOWING, NAMELY : (A) IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED I N (I) CARRYING ON THE BUSINESS OF BANKING OR PROVIDIN G CREDIT FACILITIES TO ITS MEMBERS. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE ASSESSING OFFICERERRED IN READING THE SECTION 80(P) (2)(A)(I) WITHOUT APPRECIATING THAT ALL ITSMEMBERS ARE GRADUA TES. 4. LEARNED CIT(A) -I BANGALORE, GROSSLY ERRED IN RE ADING THE SECTION 80(P)(2)(A)(I) WITHOUT APPRECIATING THAT AL L ITS MEMBERS ARE GRADUATES WHO ARE RESIDING WITHIN THE JURISDICTION AS SPECIFIED IN THE BYE LAWS OF CREDIT SOCIETY. A CREDIT CO-OPERATI VE SOCIETY FORMED FOR EXCLUSIVE BENEFITS OF THE GRADUATES. 5. THE APPELLANT PRAYS THAT THE DISALLOWANCE OF RS. 21,33,923/- IN RESPECT OF THE INCOME DERIVED FROM THE ACTIVITIES O F THE APPELLANT ENGAGED IN CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CR EDIT FACILITIES TO ITS MEMBERS. 6. THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDE NCE TO SUBSTANTIATE HIS CASE. 7. THE APPELLANT PRAYS LEAVE TO ADD, ALTER, CLARIFY AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCA SION DEMANDS. ITA NOS. 461 & 462/BANG/2018 PAGE 4 OF 4 4. BOTH SIDES WERE HEARD AND IT WAS NOTED THAT THE IMPUGNED ORDER OF CIT(A) IS WITHOUT CONSIDERING THE LATEST JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. VS. A CIT AS REPORTED IN 397 ITR 1 AND THEREFORE, WE FEEL IT PROPER TO RESTORE THE E NTIRE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER CONSIDERING THIS LA TEST JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-O PERATIVE SOCIETY LTD. VS. ACIT (SUPRA) AND AFTER COMPARING THE FACTS OF THE P RESENT CASE WITH THE FACTS OF THAT CASE. HENCE THE ORDERS OF CIT(A) ARE SET ASID E IN BOTH THE YEARS AND THE ENTIRE MATTER IS RESTORED BACK TO HIS FILE FOR FRES H DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. NEEDLESS TO SAY, THE CIT (A) SHOULD PASS A SPEAKING AND REASONED ORDER AFTER COMPARING THE FACTS OF THE PRESENT CASE WITH THE FA CTS OF THAT CASE I.E. IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. VS. A CIT (SUPRA). 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GAR ODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 11 TH APRIL, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.