ITO 21(2)(3), MUMBAI V. MUMBAI SIDHIWATAP KARMACHARI COOPERATIVE CREDIT SOCIETY LTD, MUMBAI

ITA 5559/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8454 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 14-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Assessee Lawyers: V G GINDE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI R.P.TOLANI, JUDICIAL MEMBER ITA NO.5559/MUM/2016 (ASSESSMENT YEAR 2012-13) THE ITO -21(2)(3), ROOM NO.105, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI -400 012. ...... APPELLANT VS. MUMBAI SIDHIWATAP KARMACHARI CO-OPERATIVE CREDIT SOCIETY LTD., GROUND FLOOR, BRAHAMAN SAHAYAK SANG, ROAD NO.3, SHIVAJI PARK, DADAR (W),MUMBAI 400028 PAN: AABMO 189N .... RESPONDE NT APPELLANT BY : MS BEENA SANTOSH RESPONDENT BY : SHRI V.G. GINDE DATE OF HEARING : 01/02/2016 DATE OF PRONOUNCEMENT : 01/02/2017 ORDER THIS IS REVENUES APPEAL CHALLENGING THAT THE LD . CIT(A) HAS ERRED IN LAW AND ON FACTS IN:- (I) ALLOWING BENEFITS OF SECTION 80P(2)(A)(I) OF THE IN COME TAX ACT, 1961 TO THE ASSESSEE REFERRING TO BANKING REGULATION ACT, 1 949 AND HOLDING THAT ASSESSEE IS NOT A CO-OPERATIVE BANK; (II) RELYING ON HON'BLE BOMBAY HIGH COURT IN THE CASE O F QUEPEM URBAN COOPERATIVE CREDIT SOCIETY LTD. (2015) 58 TAXMANN.C OM 113 (BOM) TO HOLD SO. 2 ITA NO.5559/MUM/2016 (ASSESSMENT YEAR 2012-13) 2. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON TH E ORDER OF ASSESSING OFFICER. ON THE OTHER HAND, LD. REPRESENTATIVE FOR THE ASSES SEE CONTENDS THAT CIT(A) HAS CATEGORICALLY HELD THAT ASSESSEE IS NOT A COOPE RATIVE BANK, WHICH COMES UNDER THE RBI ACT AND IS REGISTERED AND FUNCTIONING AS A MEMBERS COOPERATIVE CREDIT SOCIETY, WHICH IS COVERED BY COOPERATIVE SOC IETIES ACT. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF QUEPEM URBAN COOPE RATIVE CREDIT SOCIETY LTD. HAS HELD THAT THE ASSESSEE CANNOT BE CONSIDERE D AS A CO-OPERATIVE BANK FOR THE PURPOSES OF SECTION 80P(4) OF THE ACT AS FOLLOW ING THREE CONDITIONS ARE NOT SATISFIED:- (I) THE PRINCIPAL BUSINESS OF PRIMARY OBJECTIVE SHO ULD BE BUSINESS OF BANKING. (II) ITS PAID UP SHARE CAPITAL AND RESERVES SHOULD NOT BE LESS THAN RUPEE ONE LAC. (III)ITS BYE-LAWS DO NOT PERMIT ADMISSION OF ANY OT HER CO-OPERATIVE SOCIETY AS ITS MEMBER. FURTHER, RELIANCE IS PLACED ON THE DECISIONS HON'B LE KARNATAKA HIGH COURT IN THE CASES OF: I. SHRI VARDHAMAN URBAN CO-OPERATIVE CREDIT SOCIETY LT D. VS. CIT,ITA NO.100038 OF 2014 DATED 21/09/2015. II. HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. M/S. JAFARI MOMIN VIKAS CO.OP CREDIT,442,443 AND 863 OF 2013 DA TED 15 TH JANUARY, 2014, III. THESE JUDGMENTS ALSO SUPPORT THE VIEW ADOPTED BY TH E LD. CIT(A) AND HON'BLE BOMBAY HIGH COURT. 3 ITA NO.5559/MUM/2016 (ASSESSMENT YEAR 2012-13) 3. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S AND PERUSED THE MATERIAL ON RECORD. IN MY CONSIDERED VIEW, THERE I S A CLEAR DISTINCTION BETWEEN COOPERATIVE BANK GOVERNED BY RBI ACT AND MEMBERS CR EDIT COOPERATIVE SOCIETY, WHICH IS GOVERNED BY COOPERATIVE SOCIETIES ACT. IT IS UNDISPUTED THAT ASSESSEE IS NOT FUNCTIONING AS A BANK. THE CIT(A) HAS REFERRED TO THE BYE-LAWS , SOCIETY REGISTRATION CERTIFICATE, ETC. AND HELD THA T THE BENEFITS OF SECTION 80P(2)(A)(I) CANNOT BE DENIED TO THE ASSESSEE WHICH IS NOT A COOPERATIVE BANK. IN MY CONSIDERED VIEW, THERE IS NO INFIRMITY IN THE ORDER OF CIT(A), WHICH IS CONSONANCE WITH DECISIONS OF HON'BLE BOMBAY HIGH CO URT, HON'BLE KARNATAKA HIGH COURT AND HON'BLE GUJARAT HIGH COURT. IN VIE W THEREOF, THE ORDER OF CIT(A) IS UPHELD AND REVENUES APPEAL IS DISMISSED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 01/02/2017 SD/- (R.P.TOLANI) JUDICIAL MEMBER MUMBAI, DATED 01/02/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI