Puncha G.P.S.K.U.S.Ltd, Purulia V. ITO, Ward 3(4), Asansol

ITA 581/KOL/2021

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8718 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 24-08-2022
• Assessment Year: 2017-2018
• Appeal Filed On: 19-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Co-operative Credit Society
• Section: 144; 139; 80P; 250; 139(1); 194A

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'एसएमसी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA डॉ. मनीष बोरड, ल े खा सदस्य क े समक्ष Before DR. MANISH BORAD, ACCOUNTANT MEMBER I.T.A. No.: 581/Kol/2021 Assessment Year: 2017-18 Puncha G.P.S.K.U.S. Ltd..........................................Appellant [PAN: AABAP 8774 A] Vs. ITO, Ward-3(4), Asansol........................................Respondent Appearances by: Sh. M. Goenka, CA, appeared on behalf of the Assessee. Sh. Biswanath Das, CIT(D/R), appeared on behalf of the Revenue. Date of concluding the hearing : August 25 th , 2022 Date of pronouncing the order : November 10 th , 2022 ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2017-18 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short ld. “CIT(A)”] dated 31.03.2021 arising out of the assessment order framed u/s 144 of the Act dated 20.12.2019. I.T.A. No.: 581/Kol/2021 Assessment Year: 2017-18 Puncha G.P.S.K.U.S. Ltd. Page 2 of 6 2. The assessee is in appeal before this Tribunal raising the following grounds: “1. That Learned CIT(Appeal) Faceless Centre has erred in upholding that section 194A(3)(V) excluded co-operative bank from the definition of co-operative society by Finance Act, 2015 requiring them to deduct tax at source under section 194A and the amendment of section 194A(3)(v) excluding the co-operative banks from the definition of co- operative society by finance act 2015 and requiring them to deduct tax at source under section 194A also make the legislative intent clear that the cooperative banks are not that specie of genus co-operative society with would be entitled to exemption or deduction under the special provisions of chapter VIA in the form of section 80P of the Act. The assessee is a primary agricultural credit society and is not a bank and the deduction under section 80P(2)(a)(i) is not taken away by any amendment in any the Income Tax Act. The CIT Appeal is grossly wrong in upholding the assessee as co-operative bank but it is a primary agricultural society and fully illegible deduction under 80P(2)(a). 2. Section 80P(2)(a) allows deduction of entire income if co-operative society carrying on business of banking or providing credit facility to its members Here the co-operative society was carrying on banking business and business of providing credit facilities to its members. So the entire income is deductible under section 80P(2)(a)(i) of the I.T.Act so non-giving such deduction was illegal. 3. The Learned CIT (Appeal Faceless Centre also erred in treating the income as income from other sources whereas the Learned I.T.O. Computed as income from Business. The society carries on business of banking and providing credit facilities and the entire income is assessable as business income and no part is assessable as income from other sources. 4. The decisions of (1) Income Tax Tribunal Bangalore ITA No. 867/Bang/2017 in the case Sri Basawraj CFO Primary Agricultural Credit Co-Operative Society Ltd Kour P.0 Belary Dist. 583102 vs Commissioner of Income Tax (Appeal) Gulbarga 585101 (2) The High court of Ahmadabad in the case Commissioner of Income Tax Gandhinagar vs Jofari Momin Vikash Co-Operative credit society Ltd. Tax Appeal No. 863 of 2013 (3) Ahmadabad income Tax Appellate Tribunal in ITA No 1491/Ahd/2012 in the case Income Tax Office Ward 2 Patan 1 st Floor Samloka Mall Rajmjahalo Road Patan vs Jafari I.T.A. No.: 581/Kol/2021 Assessment Year: 2017-18 Puncha G.P.S.K.U.S. Ltd. Page 3 of 6 Momin Vikas Co Operative Credit Society Ltd decided that entire income of a credit society was deductible under section 80P(2)(a)(i) and no part of the income can be treated as income from other sources.” 3. At the outset, ld. Counsel for the assessee submitted that the assessee is primary agricultural credit society and not a cooperative bank and therefore, the amendment brought in by the Finance Act, 2015 inserting Section 194A(3)(v) of the Act is not applicable on the assessee and further, the assessee is eligible for deduction u/s 80P of the Act. 4. Per contra ld. D/R submitted that the assessee has not filed the return of income and thus, has not claimed any deduction u/s 80P of the Act. Further, during the course of assessment proceedings the assessee failed to appear and ld. AO had to pass ex-parte best judgment assessment order u/s 144 of the Act and the net profit shown in the audited profit & loss account has been rightly treated as business income. 5. I have heard rival contentions and perused the records placed before me. The assessee has claimed that it is a primary agricultural credit society. It had not filed its return of income for AY 2017-18. However, books of accounts are regularly maintained and the assessee filed the copy of audited profit & loss account and balance sheet and also submitted the document before the lower authorities to prove that the assessee society is engaged in the business of agricultural development amongst its members and for this purpose the society collects and gives loan to its members. Ld. Counsel for the assessee has also contended that the assessee society is eligible for claiming deduction u/s 80P(2)(a)(i) of the Act. I.T.A. No.: 581/Kol/2021 Assessment Year: 2017-18 Puncha G.P.S.K.U.S. Ltd. Page 4 of 6 However, no such claim was entertained since the assessee did not file return of income. 6. Now, as regards the claim of deduction under the provision of Chapter VI-A of the Act, amendments in Section 80AC of the Act was made and as per Clause 2 of Section 80AC of the Act as amended form 1 st April, 2018, any deduction is admissible under any provision of Chapter VI-A of the Act only if the assessee furnishes the return of income for such assessment year on or before the due date specified under sub-Section 1 of Section 139 of the Act. Now, before the amendment was brought in on 1 st April, 2018, Section 80AC of the Act reads as follows: “Deduction not to be allowed unless return furnished. —Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after— (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE; (ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading “C.—Deductions in respect of certain incomes”, no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.]” 7. From perusal of the above Section I find that the condition for filing return of income before due date u/s 139(1) of the Act was only mandatory for claiming deduction u/s 80-IA/80-IAB/80- IB/80-IC/80-ID/80-IE of the Act. Section 80P of the Act is not appearing in Section 80AC of the Act before amendment. Now, in the instant case, the assessee has not filed the return of income. However, the details filed before the lower authorities I.T.A. No.: 581/Kol/2021 Assessment Year: 2017-18 Puncha G.P.S.K.U.S. Ltd. Page 5 of 6 indicate that the assessee is primarily an agricultural credit society. Before the amendment brought in w.e.f. 01.04.2018 in Section 80AC of the Act, it was not mandatory to file income tax return for the cooperative society having income below taxable limit. It will certainly create hardship for the society if such deduction is not given only for not filing the return of income. The year under appeal is AY 2017-18 and it is not directly hit by Section 80AC of the Act. 8. Under these given facts and circumstances of the case and in the interest of justice and also in order to assess the real income of the assessee as per the provisions of the Income Tax Act, I set aside the finding of ld. CIT(A) and restore the issues raised on merit to the file of ld. AO thereby giving one more opportunity to the assessee to file all necessary details including computation of income and the details for claiming deduction u/s 80P(2)(a)(i) of the Act and I direct ld. AO to offer a reasonable opportunity of being heard to the assessee and if in case, the claim of assessee of deduction u/s 80P(2)(a)(i) of the Act is found to be correct, the same may be allowed in accordance with law. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Kolkata, the 10 th November, 2022. Sd/- [Manish Borad] Accountant Member Dated: 10.11.2022 Bidhan (P.S.) I.T.A. No.: 581/Kol/2021 Assessment Year: 2017-18 Puncha G.P.S.K.U.S. Ltd. Page 6 of 6 Copy of the order forwarded to: 1. Puncha G.P.S.K.U.S. Ltd., Vill. & P.O.-Puncha, Dist.- Purulia, West Bengal-723 151. 2. ITO, Ward-3(4), Kolkata. 3. CIT(A)- NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata