NAVBHARAT URBAN COOPERATIVE CREDIT SOCIETY LIMITED, THANE V. INCOME TAX OFFICER, WARD 4(3), THANE

ITA 5289/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3679 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 12-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AKHTAR H ANSARI SR
• Keywords: Rule of consistency; Co-operative Credit Society
• Section: 271(1)(c)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL SMC BENCH MU MBAI BEFORE SHRI PAWAN SINGH JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 5289/MUM/2018 (ASSESSMENT YEAR 2014-15 ) ITA NO. 5288/MUM/2018 (ASSESSMENT YEAR 2015-16 ) NAVBHARAT URBAN CO-OPERATIVE CREDIT SOCIETY LTD., GR. FLOOR, SIDDHIVINAYAK DARSHA APARTMENT, PHADNIS MARG, PARNAKA, VASAI, DIST. PALGHAR- 401201. PAN: AAAAN5201B VS. ITO WARD- (4)(3) A WING, 6 TH FLOOR, ASHAR I.T. PARK, ROAD NO.16Z, WAGHALE IND. ESTATE, THANE-4000064. APPELLANT RESPONDE NT APPELLANT BY : NONE RESPONDENT BY : SHRI AKHTAR H. ANSARI (SR. AR) DATE OF HEARING : 30.09.2019 DATE OF PRONOUNCEMEN T : 01.11.2019 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER ; 1. THESE TWO APPEALS BY ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDERS OF LD. CIT(A)-3, THANE DATED 12.04.2018 &18.07.2018 FOR A SSESSMENT YEAR 2014-14 & 2015-16 RESPECTIVELY. IN BOTH THE APPEA LS, THE ASSESSEE HAS RAISED IDENTICAL GROUNDS OF APPEAL EXCEPT VARIATION OF FIGURE. FACTS FOR BOTH THE ASSESSMENT YEARS ARE IDENTICAL. THEREFORE, BOTH THE APPEALS WERE CLUBBED, HEARD TOGETHER AND ARE DECIDED BY COM MON ORDER. FOR APPRECIATION OF FACTS, THE APPEAL FOR ASSESSMENT YE AR 2015-16 IN ITA NO. 5288/MUM/2018 WAS TREATED AS LEAD CASE. THE ASS ESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NO. 5288 & 5289 MUM 2018-NAVBHARAT URBAN CO-OPERATIVE CREDI T SOCIETY LTD. 2 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED A.O. ERRED IN DISALLOWING DEDUCTION CLAIMED OF RS.28,78, 868/- U/S 80P(2)(A)(I) OF THE ACT BY DISREGARDING THE FACT THAT THE INTEREST WAS RECEIVED ON TERM DEPOSIT FROM SBI. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED A.O. ERRED IN DISALLOWING DEDUCTION CLAIMED OF RS. 6,84, 482/- U/S 80P(2)(A)(I) OF THE ACT BY DISREGARDING THE FACT THAT THE COMMISSIO N WAS RECEIVED FROM MSEB. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED A.O. ERRED IN INITIATING PENALTY U/S 271(1)(C) AND INTER EST U/S 234A, B, C & D. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED COMMISSIONER OF INCOME TAX(A) ERRED IN CONFIRMING T HE CONTENTIONS RAISED BY THE ASSESSING OFFICER. [BJ RELIEF PRAYED: THE APPELLANT THEREFORE PRAYS AS FOLLOWS, 1. TO DELETE THE DISALLOWANCE OF DEDUCTION CLAIMED OF RS. 28,78,868/- U/S 80P(2)( A) (I) OF THE ACT. 2. TO DELETE THE DISALLOWANCE OF DEDUCTION CLAIMED OF RS. 6,84,482/- U/S 80P(2)(A)(I) OF THE ACT. 3. TO DELETE PENALTY LEVIED U/S 271(1)(C) AND INTER EST CHARGED U/S 234 A, B, C & D. [C] GENERAL: - THE APPELLANT RESERVE RIGHTS TO ADD ALTER OR DELE TE ANY PORTION OF THIS APPEAL BEFORE ITS CONCLUSION. THIS APPEAL IS FILED LATE AND PETITION FOR CONDON ATION OF DELAY IS FILED AND THE SAME MAY BE CONSIDERED. A DETAILED PAPER BOOK ALONG WITH CASE LAWS WILL B E SUBMITTED AT THE TIME OF HEARING. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO-OPERATIVE SOCIETY AND ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILIT Y TO ITS MEMBERS, FILED ITS RETURN OF INCOME ON 24.09.2010 FOR ASSESSMENT Y EAR 2010-11 DECLARING TOTAL INCOME OF NIL. THE CASE WAS SELECTE D FOR SCRUTINY. DURING ITA NO. 5288 & 5289 MUM 2018-NAVBHARAT URBAN CO-OPERATIVE CREDI T SOCIETY LTD. 3 THE ASSESSMENT, THE ASSESSING OFFICER NOTED THAT DU RING THE YEAR THE ASSESSEE EARNED INTEREST INCOME OF RS. 28,78,868/- ON FIXED DEPOSITS WITH STATE BANK OF INDIA. THE ASSESSEE HAS ALSO REC EIVED COMMISSION INCOME FROM MSEB OF RS. 7,34,482/-. THE ASSESSING O FFICER TOOK HIS VIEW THAT THE ASSESSEE HAS EARNED INCOME FROM NON-M EMBERS AND THE AFORESAID INTEREST INCOME SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER ISSUED S HOW-CAUSE NOTICE DATED 11.09.2017 TO THE ASSESSEE. THE ASSESSEE FILE D ITS REPLY AND RELIED UPON THE CASE LAW IN CIT VS. RAMANATHAPURAM DISTRIC T CO-OPERATIVE CENTRAL BANK LTD, CIVIL APPEAL NO. 4477 TO 4479 OF 1998(S), SHRI RENUKADEVI URBAN CREDIT CO-OPERATIVE SOCIETY LTD. V S. CIT ITS NO. 5008/2009 (KARNATAKA HIGH COURT), CIT VS. SOLAPUR N AGARI AUDYOGIC SAHAKAI BANK LIMITED IN IT APPEAL NO. 46 OF 2008 (B OMBAY HIGH COURT & RAJMATA URBAN CO-OPERATIVE BANK LTD. VS. NO . 479/PN/10 (A.Y. 2013-14 ITAT PUNE. THE ASSESSING OFFICER NOTE ACCEPTED THE REPLY OF ASSESSEE. THE ASSESSING OFFICER CONCLUDED THAT THE CASE LAWS RELIED BY ASSESSEE ARE IN CASE OF CO-OPERATIVE BANK AND NOT OF CO- OPERATIVE SOCIETIES. THE ASSESSEE IS NOT AUTHORIZED TO CARRY OUT THE ACTIVITIES OF BANKING INSTITUTION AS PERMITTED TO C O-OPERATIVE BANKS. THE PROVISION OF SECTION 80P(2)(D) IS INAPPLICABLE AS T HE INTEREST INCOME EARNED ON FIXED DEPOSIT WITH THE NATIONALIZED BANK IS NOT EXEMPTED. THE ASSESSING OFFICER TREATED THE INTEREST INCOME O N FIXED DEPOSIT IN ITA NO. 5288 & 5289 MUM 2018-NAVBHARAT URBAN CO-OPERATIVE CREDI T SOCIETY LTD. 4 STATE BANK OF INDIA AS INCOME FROM OTHER SOURCES. S IMILARLY, THE INCOME DERIVED FROM COMMISSION FROM MSEB I.E. INCOME FROM NON-MEMBERS AND THE SAME DOES NOT FALL UNDER CONCEPT OF MUTUALI TY AND THIS RECEIPT WAS ALSO TREATED AS TAXABLE UNDER THE HEAD INCOME F ROM OTHER SOURCES AND TREATED THE SAID INTEREST INCOME. THE ASSESSING OFFICER AFTER ALLOWING BASIC EXEMPTION OF RS. 50,000/- TREATED TH E REMAINING AMOUNT OF RS. 6,84,482/- (7,34,882 50,000) AS INCOME FR OM OTHER SOURCES. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSE SSING OFFICER WAS AFFIRMED. THUS, FURTHER AGGRIEVED BY THE ORDER OF L D. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THIS T RIBUNAL. 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE THE SER VICE OF NOTICE OF HEARING OF APPEAL THROUGH REGISTERED POST. THE NOTI CE SENT THROUGH REGISTERED POST RETURNED BACK WITH THE REMARK OF PO STAL AUTHORITIES UNCLAIMED THEREFORE, WE LEFT NO OPTION EXCEPT TO HEAR THE LD. DR FOR THE REVENUE AND TO DECIDE THE APPEAL ON THE BASIS O F MATERIAL AVAILABLE ON RECORD. 4. WE HAVE HEARD THE SUBMISSION OF LD. DEPARTMENTAL RE PRESENTATIVE (DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE SU PPORTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR FURTHER SUBMITS TH AT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION OF INTEREST INCOME OR COMMIS SION INCOME AS IT DOES NOT FULFIL THE CONDITIONS STIPULATED UNDER SEC TION 80P(2)(D). THE ITA NO. 5288 & 5289 MUM 2018-NAVBHARAT URBAN CO-OPERATIVE CREDI T SOCIETY LTD. 5 ASSESSEE HAS EARNED INTEREST INCOME. THE ASSESSEE H AS EARNED INTEREST INCOME FROM A NATIONALIZED BANK AND NOT FROM THE CO -OPERATIVE SOCIETY. THE CASE LAW RELIED BY ASSESSEE BEFORE THE LOWER AUTHORITY WERE NOT APPLICABLE ON THE FACTS OF THE CASE OF ASSESSEE , WHICH HAVE BEEN DULY DIFFERENTIATED BY LOWER AUTHORITIES. FURTHER, THERE IS NO MUTUALITY ON THE COMMISSION EARNED FROM MSEB. THE LD. DR FOR THE REV ENUE PRAYED FOR DISMISSAL OF APPEAL. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR FOR TH E REVENUE AND PERUSED THE RECORD. THERE IS NO DISPUTED THAT ASSES SEE EARNED INTEREST INCOME OF RS. 28,78,868/- ON DEPOSIT MADE WITH STAT E BANK OF INDIA. ADMITTEDLY, THE STATE BANK OF INDIA IS NOT A CO-OPE RATIVE SOCIETY RATHER A NATIONALIZED BANK. THEREFORE, IN OUR CONSIDERED VIE W THE ASSESSEE IS NOT ENTITLED FOR ANY DEDUCTION UNDER SECTION 80P(2)(D). SIMILARLY, FOR COMMISSION INCOME, THE ASSESSEE HAS NOT BROUGHT ANY FACT ON RECORD THAT ON COMMISSION INCOME THERE IS ANY ELEMENT OF MUTUAL ITY. NO DOCUMENTARY EVIDENCE OR WRITTEN SUBMISSION IS PLACE D BY ASSESSEE TO TAKE ANY OTHER VIEW. IN OUR VIEW, THE LOWER AUTHORI TIES HAVE RIGHTLY TREATED THE INTEREST INCOME AND COMMISSION EARNED B Y ASSESSEE AS INCOME FROM OTHER SOURCES, WHICH WE AFFIRM. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO. 5289/MUM/2018 FOR A.Y. 2014-15 ITA NO. 5288 & 5289 MUM 2018-NAVBHARAT URBAN CO-OPERATIVE CREDI T SOCIETY LTD. 6 7. THE ASSESSEE HAS RAISED THE IDENTICAL GROUNDS OF AP PEAL AS RAISED IN APPEAL FOR A.Y. 2015-16. THE FACTS OF THE APPEAL FO R THIS YEAR ARE ALSO IDENTICAL. CONSIDERING THE FACT THAT WE HAVE DISMIS SED THE APPEAL FOR A.Y. 2015-16, THEREFORE, FOLLOWING THE PRINCIPLE OF CONSISTENCY, APPEAL OF THIS YEAR IS ALSO DISMISSED WITH SIMILAR DIRECTI ON. 8. IN THE RESULT, APPEAL OF THE ASSESSEE FOR A.Y. 2014 -15 IS ALSO DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/11/2019. SD/- SD/- RAJESH KUMAR PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 01.11.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR SMC BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI