M/s. Ratnatray Gramin Bigar Sheti Sah. Pat. Sanstha Maryadit, Solapur V. Income-tax Officer, Ward - 2, Pandharpur

ITA 559/PUN/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0265 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 27-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Assessee Lawyers: RIYA SHAH
• Keywords: Non-deduction of tax
• Section: 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT . / ITA NOS.559 & 560/PUN/2018 / ASSESSMENT YEARS : 2012-13 & 2014-15 M/S. RATNATRAY GRAMIN BIGAR SHETI SAH.PAT SANSTHA MARYADIT, AT POST : SADASHIVNAGAR, MALSHIRAS, SOLAPUR 413109 PAN : AAAAR3999Q VS. ITO, WARD-2, PANDHARPUR (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THESE TWO APPEALS BY THE ASSESSEE RELATE TO THE ASSESSMENT YEARS 2012-13 & 2014-15. SINCE SOME COMMON ISSUE IS RAISED IN THESE APPEALS, I AM, THEREFORE, PROCEED ING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 559/PUN/2018 A.Y. 2012-13 : 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST DENIAL OF DEDUCTION U/S.80P OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED AS THE ACT) IN RELATION TO THE INTEREST INCOME OF APPELLANT BY MS. RIYA SHAH RESPONDENT BY SHRI M.K. VERMA DATE OF HEARING 11-12-2018 DATE OF PRONOUNCEMENT 11-12-2018 ITA NOS.559 & 560/PUN/2018 M/S. RATNATRAY GRAMIN BIGAR SHETI SAH. PAT SANSTHA MARYADIT 2 RS.5,33,321/- RECEIVED BY THE ASSESSEE FROM NATIONALISED BANKS. 3. BRIEFLY STATED, FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CO-OPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE AO OBSERVED THAT THE ASSESSEE EARNED INTEREST INCOME O F RS.4,28,999/- ON FDRS PLACED WITH IDBI BANK AND AXIS BA NK, ON WHICH DEDUCTION WAS CLAIMED U/S.80P OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT). THE AO NEGATIVED THE ASSESSEES CLAIM OF DEDUCTION ON SUCH INTER EST INCOME, WHICH ACTION CAME TO BE ECHOED IN THE FIRST APPEAL. 4. I HAVE HEARD BOTH THE SIDES AND PERUSED THE RELEVAN T MATERIAL ON RECORD. THE ONLY ISSUE IN THIS APPEAL IS WHETHER INTEREST INCOME EARNED FROM FDRS WITH THE NATIONALIZED BANKS IS ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT? THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI LAXMI NARAYAN NAGARI SAHAKARI PAT SANSTHA MARYADIT VS. ITO (ITA NO.604/PN/2014) HAS ALLOWED DEDUCTION U/S 80P OF THE ACT IN SIMILAR CIRCUMSTANCES VIDE ITS ORDER DATED 19-08-2015. IN THAT CASE, THE PUNE BENCH DISCUSSED THE CONTRARY VIEWS EXPRESS ED ITA NOS.559 & 560/PUN/2018 M/S. RATNATRAY GRAMIN BIGAR SHETI SAH. PAT SANSTHA MARYADIT 3 BY THE HONBLE KARNATAKA HIGH COURT IN TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (2015) 230 TAXMANN 309 (KAR.) ALLOWING THE DEDUCTION U/S. 80P ON INTEREST INCOME AND THE HONBLE DELHI HIGH COURT IN MANTOLA COOPERATIVE THRIFT CREDIT SOCIETY LTD. VS. CIT (2014) 110 DTR 89 (DELHI) NOT ALLOWING DEDUCTION U/S.80P ON INTEREST INCOME EARNED FROM BANKS UNDER SIMILAR CIRCUMSTANCES. BOTH THE HONBLE HIGH COURTS HAVE TAKEN INTO CONSIDERATION THE RATIO LAID DOWN IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD. 322 ITR 283 (SC) . THERE BEING NO DIRECT JUDGMENT FROM THE HONBLE JURISDICTIONAL HIGH COURT ON THE POINT, THE TRIBUNAL IN SHRI LAXMI NARAYAN NAGARI SAHAKARI PAT SANSTHA MARYADIT ( SUPRA ) PREFERRED TO GO WITH THE VIEW TAKEN IN FAVOUR OF THE ASSESSEE BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. (SUPRA). IN THE ABSENCE OF THEIR BEING ANY CHANGE IN THE LEGAL POSITION PREVAILING ON THIS ISSUE AFTER THE PASSING OF THE ORDER BY THE PUNE BENCH OF THE TRIBUNAL IN SHRI LAXMI NARAYAN NAGARI SAHAKARI PAT SANSTHA MARYADIT ( SUPRA ) AND A HOST OF OTHER ORDERS REITERATING THE SIMILAR VIEW, RESPECTFULLY FOLLOWING THE PRECEDENT, I OVERTURN THE IMPUGNED ITA NOS.559 & 560/PUN/2018 M/S. RATNATRAY GRAMIN BIGAR SHETI SAH. PAT SANSTHA MARYADIT 4 ORDER IN NOT ALLOWING DEDUCTION U/S.80P ON THE INTEREST INCOME AND DIRECT TO GRANT DEDUCTION ON SUCH INTEREST INCOME. ITA NO. 560/PUN/2018 A.Y. 2014-15 : 5. THE FIRST ISSUE RAISED IN THIS APPEAL IS AGAINST THE DENIAL OF DEDUCTION U/S. 80P OF THE ACT IN RESPECT OF INTEREST AMOUNTING TO RS.5,33,321/- EARNED FROM FIXED DEPOSIT RECE IPTS KEPT WITH BANKS. 6. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THE INSTANT GROUND ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF THE ASSESSMENT YEAR 2012-13. FOLLOWING THE VIEW TAKEN HEREINABOVE, I ORDER TO GRANT DEDUCTION U/S. 80P ON SUCH INTEREST INCOME. 7. THE ONLY OTHER ISSUE WHICH SURVIVES IN THIS APPEAL IS AGAINST MAKING DISALLOWANCE OF RS.2,70,834/- U/S. 40(A)(IA) OF THE ACT. 8. FACTS APROPOS THIS ISSUE ARE THAT THE ASSESSEE PAID COMMISSION TO PIGMY AGENTS. ON BEING CALLED UPON TO EXPLAIN AS TO WHETHER ANY DEDUCTION OF TAX AT SOURCE WAS MADE, THE ASSESSEE FURNISHED A COPY OF CERTIFICATE ISSUED BY ITO (T DS) ITA NOS.559 & 560/PUN/2018 M/S. RATNATRAY GRAMIN BIGAR SHETI SAH. PAT SANSTHA MARYADIT 5 PERMITTING NON-DEDUCTION OF TAX AT SOURCE ON SUCH COMMISSION PAYMENT TO THE EXTENT OF RS.5,80,000/-. THE AO FOUND THA T SMALL AMOUNTS TOTALLING TO RS.28,405/- WERE PAID AS COMMISSION TO SIX PERSONS, WHICH DID NOT ATTRACT TAX WITHHOLDING. OUT OF THE TOTAL COMMISSION PAYMENT BY THE ASSESSEE TO THE TUNE OF RS.8,79,239/-, THE AO REDUCED TH E AMOUNT COVERED UNDER TDS CERTIFICATE AT RS.5,80,000/- AND THE AMOUNT PAID TO SIX COMMISSION AGENTS RS.28,405/-. THE REMAINING AMOUNT OF RS.2,70,834/- WAS DISALLOWED U/S. 40(A)(IA) OF THE ACT. THE ASSESSEE DID NOT CHALLENGE THIS ISSUE BEFORE THE LD. CIT(A). HOWEVER, AN ADDITIONAL GROUND HAS BEEN RAISED BEFORE THE TRIBUNAL URGING IT TO DELETE THE DISALLOWANCE WHICH WAS MADE BY THE AO AND INADVERTENTLY NOT CHALLENGED BEFORE THE LD. CIT(A). 9. HAVING HEARD BOTH THE SIDES AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD, I FIND THAT THERE CAN BE NO RE ASON TO STOP THE ASSESSEE FROM TAKING A FRESH LEGAL PLEA BEFORE THE TRIBUNAL WHICH WAS INADVERTENTLY NOT TAKEN UP BEFORE THE LD. CIT(A). SINCE THIS MATTER HAS NOT BEEN EXAMINED BY THE LD. CIT(A) ON MERITS, I AM OF THE CONSIDERED OPINION THAT IT WO ULD ITA NOS.559 & 560/PUN/2018 M/S. RATNATRAY GRAMIN BIGAR SHETI SAH. PAT SANSTHA MARYADIT 6 BE IN THE FITNESS OF THINGS IF THE LD. CIT(A) IS DIRECTED TO EXAMINE THE ASSESSEES CASE ON THIS ISSUE. NEEDLESS TO SA Y, THE ASSESSEE WILL BE ALLOWED REASONABLE OPPORTUNITY OF HEARING. 10. IN THE RESULT, THE APPEAL FOR A.Y. 2012-13 IS ALLOWED A ND THAT FOR THE A.Y.2014-15 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DECEMBER, 2018. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 11 TH DECEMBER, 2018 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS-7, PUNE 4. / THE PR. CIT-6, PUNE 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NOS.559 & 560/PUN/2018 M/S. RATNATRAY GRAMIN BIGAR SHETI SAH. PAT SANSTHA MARYADIT 7 DATE 1. DRAFT DICTATED ON 11-12-18 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 11-12-18 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *