THE PRESBYTERIAN CHURC CO. OPERATIVE CREDIT And THRIFT SOCIETY LTD., AJMER V. ITO,WD-2(2), AJMER, AJMER

ITA 476/JPR/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7687 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-02-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 21-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency
• Section: 154; 139; 143(1); 80P; 250

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 476/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2019-20 The Presbyterian Churc Co. Operating Credit & Thrift Society Ltd., Ajmer cuke Vs. Income Tax Officer, Ward-2(2), Ajmer LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAATT 6019 Q vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Mahendra Gargieya, Adv. jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 21/02/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 25/04/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by assessee is arising out of the order of the National Faceless Appeal Centre, Delhi dated 26/05/2023 [here in after (NFAC)/ ld. CIT(A)] for assessment year 2019-20 which in turn arise from the order dated 18.04.2020 passed under section 143(1) of the Income Tax Act, by ADIT, CPC, Bangalore. 2 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO 2. In this appeal, the assessee has raised following grounds: - “1. The impugned order u/s 154/143(1)(a) dated 15.04.2021 is bad in law and on facts of the case, for want of jurisdiction and for various other reasons and hence the same may kindly be quashed and in any case, the impugned addition/s be deleted. 2. The ld. CIT(A)/NFAC erred in law as well as on the facts of the case in confirming the disallowance made of the deduction claimed u/s 80P(2)(a)(i) on account of the interest income, being a credit cooperative society providing credit facility to its members. The disallowance so made and confirmation thereof being contrary to the provisions of facts and law, be deleted in full and the deduction as claimed please be directed to allowed in full. 3. The ld. CIT(A)/NFAC erred in law as well as on the facts of the case in alleging non-filing of certain details which is contrary to the facts and in fact, all the relevant details are admittedly available on records establishing the compliance of the conditions hence the Appellant be held entitled to the deduction as claimed u/s 80P(2)(a)(i). 4. The appellant prays your honour indulgence to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.” 3. Succinctly, the fact as culled out from the records is that assessee has filed its return of income as AOP for AY 2019-20 on 29.08.2019 by admitting NIL income after claim of deduction under chapter VI of Income Tax Act for Rs. 5.08 lacs. The same was processed by ADIT, CPC, Benguluru, vide intimation u/s. 143(1) dated 18.04.2020 and total income was determined at Rs. 5,19,150. Apparently, appellant claim as an AOP under section 80P(2a)(i) was not allowed therefore, the assessee has filed rectification application under section 154 of the I.T. Act and same was duly processed by ADIT, CPC, Benguluru vide order dated 15.04.2021 passed u/s. 154 of the Act. In that order of rectification, ADIT, CPC, Benguluru has 3 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO rejected assessee 's claim for deduction under section 80P of the I.T. Act, once again as done in 143(1) order dated 18.04.2020. While rejecting the assessee’s application under section 154, the ADIT, CPC, Benguluru observed that assessee had not filled schedule VIA for claiming deduction u/s. section 80P as needed along with incorrect applicability of status other than co-op. society etc. 4. Aggrieved from the order passed u/s. 143(1), assessee preferred an appeal before the ld. CIT(A)/NFAC. Apropos to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below: “2.3 It is a fact on record that appellant has filed its e-Return of Income as applicable for A.Y 2019-20 by making a claim u/s 80P of I.T Act. However, apparently, the e-filed return was not correctly filed as applicable to the claim u/s 80P of I.T Act involving correct filling of relevant Schedule VIA claim as needed as per I.T Act in the e-filed ROI by duly fulfilling the required conditions as applicable to Cooperative Society involved in the claim of deduction u/s 80P(2)(a)(i) of I.T Act. In the light of these facts, apparently, appellant's claim was not allowed as the relevant statutory return of income as filed by the appellant as applicable to a Cooperative Society with its correct status is not duly reflected in the relevant columns of e-filed return of the appellant as observed by the ADIT, CPC, Bengaluru, while passing the rectification order u/s 154 of I.T Act dated 15.04.2021 as already extracted supra. in the light of these facts, appellant's mere claim that the claim of deduction u/s 80P(2)(a) (i) of I.T Act needs to be considered, though, the same is not properly reflected or reconcilable as per the provisions of I.T Act with the statutory filled e-filed return of the appellant is, apparently, neither acceptable nor justifiable. The filing of correct Return of Income by the appellant is a statutory obligation with due compliance involving defined provisions of I.T Act with consequential time limits to file such Return of Income well within the time correctly and effectively so as to make use of claims of deductions as attributable to any Cooperative Society as per the provisions of I.T Act. However, though the appellant filed two separate appeals, one against the 143(1) order dated 18.04.2020 and the other against the 154 order dated 15.04.2021, appellant could not bring on record any reconcilable and verifiable 4 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO facts of case resulting in reconciliation of correctness of its claims contrary to the observations of ADIT, CPC, Bengaluru, in its order u/s 143(1) / 154 order dated 18.04.2020 and 15.04.2021 of I.T Act. Accordingly, appellant could not adduce any specific evidence and justification involving correct reconciliation of its e-filed Return of Income with applicable claims u/s 80P(2)(a) (i) of |.TA so as to consider appellant's grounds of appeal on this issue for its allowability as per I.T Act. Further, the fact of any mistake apparent from record as attributable to these orders is neither made available nor made is evidenced/advanced by the appellant with supporting proofs/justification as per I.T. Act. In the absence of the same, apparently, appellant fails to succeed on this issue of claim on its allowability as brought out in the relevant grounds of appeal against these two orders of A.Y 2019-20, namely order u/s 143(1) of I.T Act dated 18.04.2020 and order u/s 154 of I.T Act dated 15.04.2021. Accordingly, appellant's grounds of appeal on this issue for these two appeals are not maintainable as filed against the order u/s 143(1) of I.T Act dated 18.04.2020 and order u/s 154 of I.T Act dated 15.04.2021. In the result orders of Assessing Officer, ADIT, CPC, Bangaluru are sustainable as per facts on record read with appellant e-filed ROI. 3. In the result, this appeal against order u/s 143(1)/154 of 1.T Act is dismissed.” 5. As the ld. CIT(A) has dismissed the appeal of the assessee and thus the present appeal filed by the assessee against the order of the ld. CIT(A), challenging the finding of the ld. CIT(A) on the ground as stated herein above. The only issue raised in this appeal is allowability of deduction claimed by the assessee u/s. 80P(2)(a)(i) of the Act. In support of the grounds so raised the ld. AR of the assessee, has filed the written submissions in respect of the various grounds raised by the assessee and the same is reproduced herein below. Brief General Facts: The facts noted by the CIT (A) at Page 2 Para 2 are: “The brief facts of the case involve that appellant has filed its return of income as AOP for AY 2019-20 on 29.08.2019 by admitting NIL income after claim of deduction under chapter VI of Income Tax Act for Rs. 5.08 lacs. The same was processed by ADIT, CPC, Benguluru vide 143(1) order dated 18.04.2020 by assessing the total income at Rs. 5,19,150 as against of Rs. 10,165 admitted by the 5 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO appellant. Apparently, appellant claim as AOP under section 80P(2a) (i) is not allowed is the contention of the appellant, against this 143(1) order dated 18.04.2020. Aggrieved by the order, appellant has filed rectification application under section 154 of the I.T. Act and same was duly processed by ADIT, CPC, Benguluru vide 154 order dated 15.04.2021. In this 154 order ADIT, CPC, Benguluru has rejected appellant’s claim for deduction under section 80P of the I.T. Act, once again as did in 143(1) order dated 18.04.2020. While rejecting the appellant’s application under section 154, the ADIT, CPC, Bengaluru observed that appellant had not filled schedule VIA for claiming deduction of section 80P as needed along with incorrect applicability of status other than co-op. society etc. The true extract of relevant 154 order is as under: The ld. CIT (A) thereafter reproduced the order u/s 154.” In the meanwhile, since the appellant also filed appeal against the very intimation u/s 143(1) dated 18.04.2020 the ld. CIT further observed: “Without prejudice to the above 154 order, meanwhile appellant has filed appeal against 143(1) order dated 18.04.2020, precisely raising the ground for claim of deduction u/s 80P(2)(a)(i) and could not adduce any further details as needed to reconcile with the e-filed return of appellant as filed for this AY 2019-20 for its correctness on its allow ability as per the provision of the I.T. Act. Further, appellant also filed another appeal against the above 154 order dated 15.04.2021 on19.05.2021. Apparently, with the same grounds of appeal seeking for claim under section 80P(2)(a) of I.T. Act. In this appeal filed also, appellant could not reconcile the discrepancies as observed by the ADIT, CPC, Bengaluru in its 154 order as extracted supra. In the light of these facts appellant’s two appeals, one against 143(1) order dated 18.04.2020 and another against 154 order dated 15.04.2021 is considered for its disposal as under after considering appellant’s overlapping and similar grounds of appeal as made in these two appeals filed for this AY 2019-20 on the same issue of 80P claim involving improper and incorrect filing of its statutory ROI as applicable for this AY 2019-20. 2.2 During the appeal proceedings, appellant is given various hearing notices including latest hearing notices dated 12.05.2023 and dated 17.05.2023 against these two pending appeals. Appellant has replied in response to these notices on 18.05.2023 and after careful consideration of the appellant overall submissions and keeping in view the facts of case as emanating from these 143(1) order and 154 orders of appellant’s, these two appeals are discussed and are disposed as per I.T. Act as under: During the course of the appellate proceedings the appellant filed detailed submissions dated 09.10.2022 (PB 24-25), 22.10.2022, 20.04.2023 (PB 26-27) uploaded on 24.04.2023 and 28.04.2023 The ld. CIT(A) however dismissed the appeal by holding as under: 2.3 It is a fact on record that appellant has filed its e-Return of Income as applicable for A.Y 2019-20 by making a claim u/s 80P of I.T Act. However, apparently, the e- 6 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO filed return was not correctly filed as applicable to the claim u/s 80P of I.T Act involving correct filling of relevant Schedule VIA claim as needed as per I.T Act in the e-filed ROI by duly fulfilling the required conditions as applicable to Cooperative Society involved in the claim of deduction u/s 80P(2)(a)(i) of I.T Act. In the light of these facts, apparently, appellant's claim was not allowed as the relevant statutory return of income as filed by the appellant as applicable to a Cooperative Society with its correct status is not duly reflected in the relevant columns of e-filed return of the appellant as observed by the ADIT, CPC, Bengaluru, while passing the rectification order u/s 154 of I.T Act dated 15.04.2021 as already extracted supra. In the light of these facts, appellant's mere claim that the claim of deduction u/s 80P(2)(a)(i) of I.T Act needs to be considered, though, the same is not properly reflected or reconcilable as per the provisions of I.T Act with the statutory filled e- filed return of the appellant is, apparently, neither acceptable nor justifiable. The filing of correct Return of Income by the appellant is a statutory obligation with due compliance involving defined provisions of I.T Act with consequential time limits to file such Return of Income well within the time correctly and effectively so as to make use of claims of deductions as attributable to any Cooperative Society as per the provisions of I.T Act. However, though the appellant filed two separate appeals, one against the 143(1) order dated 18.04.2020 and the other against the 154 order dated 15.04.2021, appellant could not bring on record any reconcilable and verifiable facts of case resulting in reconciliation of correctness of its claims contrary to the observations of ADIT, CPC, Bengaluru, in its order u/s 143(1)/154 order dated 18.04.2020 and 15.04.2021 of I.T Act. Accordingly, appellant could not adduce any specific evidence and justification involving correct reconciliation of its e-filed Return of Income with applicable claims u/s 80P(2)(a)(i) of I.T Act so as to consider appellant's grounds of appeal on this issue for its allowability as per I.T Act. Further, the fact of any mistake apparent from record as attributable to these orders is neither made available nor made is evidenced/advanced by the appellant with supporting proofs/justification as per I.T. Act. In the absence of the same, apparently, appellant fails to succeed on this issue of claim on its allowability as brought out in the relevant grounds of appeal against these two orders of A.Y 2019- 20, namely order u/s 143(1) of I.T Act dated 18.04.2020 and order u/s 154 of I.T Act dated 15.04.2021. Accordingly, appellant's grounds of appeal on this issue for these two appeals are not maintainable as filed against the order u/s 143(1) of I.T Act dated 18.04.2020 and order u/s 154 of I.T Act dated 15.04.2021. In the result orders of Assessing Officer, ADIT, CPC, Bangaluru are sustainable as per facts on record read with appellant e-filed ROI. 3. In the result, this appeal against order u/s 154 of I.T Act is dismissed” Hence this Appeal. GOA-1 & 4: Is a general ground and shall be considered while deciding other grounds of appeal GOA -2: Disallowance for deduction made u/s 80P 2(a)(i): 7 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO 1.Assessee is a Credit Cooperative Society: At the outset it is submitted that the assesse is a registered co-operative society working to serve its members. The society is duly registered under Co-Operative Societies Act, 1912.The operational area of the society is Ajmer and most of the members of the society are agriculturists. Also there is no dispute between the parties that the appellant is earning income on providing credit facilities to its members as required/s 80P(2)(a)(i). This is evident from the main objectives of the Appellant- Society, reproduced hereunder: Thus, on merits there appears no denial or doubt as regards the eligibility of the assessee to get the deduction u/s 80P(2)(a)(i) of the Act, nor therefore, has been made a ground of denial. 2. The Appellant- Society has been denied deduction merely on some procedural, technical and non-existing grounds which are completely unjustified in the eyes of law. The first ground of denial was that the deduction was not meant for the ‘status’ other than cooperative society and that the deduction is allowable only on the balance income, after set off of the current year and brought forward losses. It is however submitted that the status of the “person” has been defined u/s 2(31) of the Act, which is reproduced here: “Section 2(31) of the Act defines ‘Person’ as: 31) "person" includes— (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub- clauses; A perusal of the above definition reveals that there is no separate status shown by the Act in the name of Cooperative Society as wrongly alleged in the impugned order. As a matter of practice and rightly so, a Cooperative Society is 8 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO normally considered as AOP falling u/s 3(1)(v) of the Act. The appellant accordingly applied for the PAN and its PAN also shows in the capacity of AOP/Trust. There apart, in the ITR (PB 1) the appellant has shown the status as AOP/BOI and again in ITR 5 under, at pg. 1(PB 4) after mentioning AOP/BOI, the sub-status has been shown as other cooperative society. It is not known as from where this ground has been taken that deduction u/s 80P is not meant for status other than cooperative society, when the appellant has been filing in the same status as can be seen from the returns for other years as well, Kindly refer ITR for A.Y. 2020-21(PB 28)s. Thus, such a ground is completely non-existent and contrary to the provisions of the law. 3.The other ground is that the appellant did not correctly filed Schedule VI –A for claiming deduction u/s 80 P. However, it is not at all demonstrated as to what was not correctly filed and how it should have been filed. A perusal of the relevant columns in the ITR filed for this year at pg.52 (PB 5 ), there appears nothing wrong. All the columns have been filled properly to the best of knowledge of the appellant. There apart, in the succeeding and the preceding years also, the appellant has been claiming the same deduction but there has been no denial in those years whereas the facts and circumstances were the same. Therefore, there is no reason as to why the Department should have departed from the settled position of the parties following the rule of consistency. 4. It can be seen that there has been no dispute in the past, nor there can be now also, that the status of a cooperative society claiming a deduction under Section 80 P (2)(a)(i) shall always be AOP. A useful reference can be made to the decision in the case of Shri Datta Prasad Sahakari Patsanstha Ltd. vs. the ITO-26(3)(2) Mumbai in ITA No./6029/MUM/2019 For A.Y.-2011-12, where the Hon’ble ITAT Mumbai vide its order dated 08.09.2021, where the assessee wrongly filled in the status of firm as against AOP and thereafter, filed rectification u/s 154 correcting the mistake which was rejected by the AO and CIT(A) both, however, the Hon’ble ITAT in para 12 directed the AO to make the correction of the status of the assessee from Firm to AOP. Thus, it was agreed by the revenue also and by the Hon’ble ITAT that the status of a cooperative society claiming this type of deduction was correctly AOP only. In the present case, CPC Bangalore, though alleged wrong status but has not at all shown how it was wrong or what was the correct status for a society like the present one that is the Appellant-Cooperative society for claiming the subjected deduction. In this way, the said ITAT decision supports the case of the Assessee. It is therefore, humbly prayed that the deduction as claimed may be directed to be allowed at full and oblige.” 6. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions: 9 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO S. No. Particulars Pg. No. 1. Copy of ITR along with Computation u/s 139 dt. 29.08.2019 1-3 2. Copy of ITR Form (relevant extract only) 4-7 3. Copy of Bye Laws of Credit Cooperative Society dated 11.06.2014 8-22 4. Copy of Rectification application u/s 154 dated 18.04.2020 23 5. Copy of Written Submission filed on dated 9.10.2022 in response to Notice u/s 250 datec 08.09.2022 24-25 6. Copy of Written Submission filed on dated 20.04.2023 in response to Notice u/s 250 dated 06.04 20'23 _ 26-27 7. The ld. AR of the assessee submitted that the assessee has correctly claimed the deduction u/s. 80P as per copy of the ITR placed on record at paper book page 5 wherein the assessee has claimed the deduction of Rs. 5,08,493/- u/s. 80P(2)(a)(i) of the Act. Since the object of the assessee is to lend the money the deduction claimed by the assessee is allowable. As regards the contention of the status as AOP and not mentioned as co- operative society the ld. AR of the assessee submitted that there is no separate status for the co-operative society as per the definition given in the section 2(31) of the Act. To drive home to the similar contention so raised by the revenue the assessee relied upon the decision of the co-ordinate bench in the case of Shree Datta Prasad Sahakari Patsanstha Ltd., in ITA no. 6029/Mum/2019. 10 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO 8. Per contra, the ld. DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. AO and ld. CIT(A). The ld. DR submitted since the assessee has not filed correct status and has not filed the details in the ITR properly so the claim was rejected as the same was not correctly claimed. 9. We have heard the rival contentions and perused the material placed on record. The grievance of the assessee raised in this appeal is that the claim of the assessee was denied u/s 80P(2)(a)(i) of the Act stating that the same was not correctly made in the ITR filed. But in fact made (APB-5) in the ITR filed by the assessee as demonstrated before us and the second reason was not mentioning the status as co-operative society but mentioned as AOP. The fact related the first issue is that the assessee vide ITR filed, paper book page 5 wherein the assessee has correctly mentioned the claim u/s 80P(2)(a)(i), Banking / credit facilities to its members for an amount of Rs. 5,08,493/-. Thus, so far as the claim of the assessee as made in the ITR there is no discussion as on what reason the same is not correctly claimed. Considering the object of the society being lending money to its member the deduction is correctly claimed by the assessee in his return of income filed and so the reasons advanced by the revenue on 11 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO this part has no force and are purely based on surmises and conjecture. As regards the status showing as AOP we have gone through the definition of person given in section 2(31) of the Act wherein there is no separate status for co-operative society to mentioned and therefore, the mentioned of the status as AOP also does not disqualify the assessee to claim the deduction. Therefore, denial of the deduction on that second reasons is also not correct. We get the support of our view from the decision of co-ordinate bench of Mumbai in ITA no. 6029/Mum/2019 in the case of Shree Datta Prasad Sahakari Patsanstha Ltd., wherein the bench has dealt the similar issue and allowed the deduction even though the same was not claimed by the assessee in that return of income filed in that case. Whereas, the bench has noted that in this case the assessee has claimed the deduction and therefore, merely without specifying how the claim of the assessee is not correctly claimed and the same cannot be denied in the intimation u/s. 143(1) of the Act. In the light of these set of facts the ld. AO is directed to allow the claim of the assessee as claimed in the ITR u/s. 80P(2)(a)(i) of the Act. Based on these observations ground no. 2 & 3 raised by the assessee is allowed. Ground no 1 & 4 being general ground does not require our adjudication. In the result, the appeal of the assessee is allowed. 12 ITA No. 476/JP/2023 The Presbyterian Churc Co. Operative Credit & Thrift Society Ltd. vs. ITO Order pronounced in the open court on 25/04/2024. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 25/04/2024 * Ganesh Kumar, PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- The Presbyterian Churc Co. Operative Credit and Thrift Society Ltd., Ajmer 2. izR;FkhZ@ The Respondent- ITO, Ward 2(2), Ajmer 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 476/JP/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar