RABINDRA BHARATI UNIVERSITY COOPERATIVE CREDIT SOCIETY LIMITED, KOLKATA V. DCIT-CPC, Bangalore Jurisdictional AO – ITO Ward 51(4)/Kolkata, BENGALURU

ITA 585/KOL/2021

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8640 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 13-09-2022
• Assessment Year: misc
• Appeal Filed On: 20-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Period of limitation; Time period of passing order; Revised return
• Section: 56; 28; 143(3); 142(1); 80P; 250; 143(2)

Judgement Text

1. ITA No 584/Kol/2021 AY 2017-18 ITA No.585/Kol/2021 AY 2018-19 Rabindra Bharati Univerisity Co-op Credit Society Ltd. आयकर अपील य अ धकरण, पीठ “A-SMC” , कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL BENCH “A-SMC”KOLKATA सम : ी मनीष बोरड, लेखा Before: Shri Manish Borad, Hon’ble Accountant Member आयकर अपील सं.य/ ITA Nos.584 & 585/Kol/2021 Assessment Years: 2017-18 & 2018-19 Rabindra Bharati Univeristy Co- operative Credit Society Ltd. 56A Brackpore Trunk Road, Kolkata-700050. बनाम V/s. Income Tax Officer Ward 50(7), Kolkata PAN: AADAR1051L अपीलाथ /Appellant .. यथ /Respondent अपीलाथ क ओर से/By Appellant Shri A.K.Ghosh, Advocate,Ld.AR यथ क ओर से/By Respondent Shri Vijay Kumar, Ld.Addl.CIT/DR स ु नवाई क तार ख/Date of Hearing 14-09-2022 घोषणा क तार ख/ Date of Pronouncement 11-11-2022 आदेश /O R D E R PER MANISH BORAD, AM. Both the appeals of the assessee for the assessment years 2017-18 & 2018-19 are directed against the separate orders dt. 07-07-2021 & 08-07- 2021 passed u/s. 250 of the Income-tax Act, 1961 [ hereinafter, referred to as ‘the Act’] by the ld. Commissioner of Income-tax, Appeals [ in short, hereafter referred to as ‘the ‘ld. CIT(A) Kolkata (National Faceless Appeal Centre. 2. ITA No 584/Kol/2021 AY 2017-18 ITA No.585/Kol/2021 AY 2018-19 Rabindra Bharati Univerisity Co-op Credit Society Ltd. 2. Registry has informed that the both the appeal(s) filed by the assessee are time barred by 105 days. Condonation application has been filed by the assessee by way of Affidavit Dt. Nov., 10, 2021 (copy of which is placed on record). Perusal of the same shows that the delay was on account of illness of assessee’s Treasurer, who looks after the tax matter. For his illness he could not communicate the lawyer for taking necessary step in filing the appeal mater in time. From 15.03.2020 till 28.02.2022 there was COVID-19 restrictions. We, therefore, in view of the reasoning therein in the affidavit and judgment of The Hon 'ble Supreme Court vide Miscellaneous Application No. 21 of 2022 find that the limitation period in filing appeal between 15.03.2020 till 28.02.2022 has been excluded for calculating the limitation period. Since the period of limitation in the case of the assessee falls during this period, the same deserves to be extended and we, therefore, condone the delay of 105 days and admit both the appeal(s) for adjudication on merits. 3. First I take up the appeal number ITA No. 584/Kol/2021 for the AY 2017-18, wherein following grounds are raised by the assessee. 1. For that under the facts and circumstances of the case the Ld. Appellate Authority erred in law and facts, in confirming the action of the learned Assessing Authority in denying the claim of deduction u/s 80P(2)(a)(i) of the Income-tax Act, 1961 amounting to Rs. 91,091/-. 2. For that the Ld. Appellate Authority and the learned Assessing Authority erred in law and on facts in denying deduction u/s 80P of Income-tax Act, 1961 amounting to Rs. 91,091/-. The authorities treated the entire bank interest income under the head of income from other sources. 3. For that the Ld. CIT (A) erred in law and on facts in not allowing the claim of deduction of such interest income and ought to have appreciated that deposits were kept with banks for safety and prudence perspective which is at all-time available for disbursement to the members of the credit society. 3. ITA No 584/Kol/2021 AY 2017-18 ITA No.585/Kol/2021 AY 2018-19 Rabindra Bharati Univerisity Co-op Credit Society Ltd. 4. For that the Ld. Appellate Authority and the learned Assessing Authority erred in relying on the judgement pronounced by the Honourable Supreme Court in the case of The Totgars Sales Cooperative Society vs. The Income Tax Officer, Karnataka, though the facts of the case and the business activities of The Totgars Sales Cooperative Society and that of the appellant are entirely different. 5. For that your petitioner craves leave to add, alter, modify or delete any of the grounds at the time of hearing of the appeal or before. 4. Brief facts of the case are that the assessee is a co-operative credit society and declared Nil income in the e-return filed on 28-03-2018 for the AY 2017-18. After the case being selected for a limited scrutiny under CASS followed by serving of notices u/s. 143(2) and 142(1) of the Act. Thereafter, the ld. AO carried out the assessment proceedings and noticed that the assessee received interest on saving Bank a/c held with State Bank of India at Rs. 91,091/- and observed that since the said income is not earned from the activities carried out by the society, therefore, the interest received by the society is liable to be taxed as income from other sources and the same is not liable for deduction u/s. 80P(2)(a)(i) of the Act. 5. Aggrieved, the assessee preferred appeal before the ld. CIT(A), but failed to succeed. 6. Aggrieved, the assessee is now in appeal before this Tribunal. 7. Ld. Counsel for the assessee vehemently argued, filed written submissions and paper book containing 35 pages and contended that the alleged interest income was from saving bank account and is not from any deposits. It was submitted that maintaining of saving bank account is essential to carry out the business activities of the society and the same is necessary for business of the society. Therefore, the interest earned from such saving bank account should be treated as ‘business income’ eligible for deduction u/s. 80P(2)(a)(i) of the Act. 4. ITA No 584/Kol/2021 AY 2017-18 ITA No.585/Kol/2021 AY 2018-19 Rabindra Bharati Univerisity Co-op Credit Society Ltd. 8. Per contra, the Ld. Departmental Representative vehemently argued supporting the orders of the lower authorities. 9. I have heard the rival contentions and perused the material placed on record before us. The only issue raised before me is that the ld. CIT(A) erred in not allowing the deduction u/s. 80P(2)(a)(i) of the Act that the interest earned at Rs.91,091/- from saving bank account. I notice that the ld. CIT(A) denied the deduction following the judgment of Hon’ble Supreme Court in the case of Totgars Co-op Sale Society Ltd Vs. ITO (188 Taxmann.com 282) (2010), wherein the Hon’ble Apex Court laid down the ratio that interest income earned on the surplus or idle funds not immediately required for its business is not income from business taxable u/s. 28 of the Act, but was taxable as ‘income from other sources’ u/s. 56 of the Act. 10. However, I find that in the instant case alleged interest is neither earned on any surplus/idle funds nor from any fixed deposits. The said sum is in the nature of saving bank interest. This saving bank account in the name of the assessee society is used for carrying out the business activities of the assessee society for receiving of funds from the members and then providing credits to its members. In this process some bank balance is always there in the saving bank account on which quarterly interest is given. It is not in dispute that the assessee society is eligible for deduction u/s. 80P(2)(a)(i) of the Act. It is only the interest income from saving bank account, which has been excluded from the deduction u/s. 80P(2)(a)(i) of the Act. 11. I, therefore, under the given facts and circumstances of the case am of the view that since the alleged sum is earned from saving bank account, which is akin to the business activities carried out by the assessee the alleged interest is not earned from any surplus or idle funds and it is part of the business income and therefore, the judgment of the Hon’ble Apex Court 5. ITA No 584/Kol/2021 AY 2017-18 ITA No.585/Kol/2021 AY 2018-19 Rabindra Bharati Univerisity Co-op Credit Society Ltd. in the case of Totgars Co-op Sale Society Ltd supra is not applicable on the facts of the instant case. Thus the alleged sum is eligible for deduction u/s. 80P(2)(a)(i) of the Act and should not be treated as income from ‘other sources’. I, therefore, reverse the findings of the ld. CIT(A) and allow all the grounds raised by the assessee in appeal no. ITA No. 584/Kol/2021 for the AY 2017-18. 12. Now, I take up the appeal No. 585/Kol/2022 for the AY 2018-19, wherein following grounds have been raised :- 1. For that under the facts and circumstances of the case the Ld. Appellate Authority erred in law and facts, in confirming the action of the learned Assessing Authority in denying the claim of deduction u/s 80P(2)(a)(i) of the Income-tax Act, 1961 amounting to Rs. 13,52,434/-. 2. For that the Ld. Appellate Authority and the learned Assessing Authority erred in law and on facts in denying deduction u/s 80P of Income-tax Act, 1961 amounting to Rs. 13,52,434/-. The authorities treated the entire bank interest income under the head of income from other sources. 3. For that the Ld. CIT (A) erred in law and on facts in not allowing the claim of deduction of such interest income and ought to have appreciated that deposits were kept with banks for safety and prudence perspective which is at all-time available for disbursement to the members of the credit society. 4. For that the Ld. Appellate Authority and the learned Assessing Authority erred in relying on the judgement pronounced by the Honourable Supreme Court in the case of The Totgars Sales Cooperative Society vs. The Income Tax Officer, Karnataka, though the facts of the case and the business activities of The Totgars Sales Cooperative Society and that of the appellant are entirely different. 5. For that your petitioner craves leave to add, alter, modify or delete any of the grounds at the time of hearing of the appeal or before. 13. Brief facts of the case are that the assessee for the assessment year 2018-19 assessee filed e return on 16-08-2018 declaring Nil income after claiming deduction u/s. 80P(2)(a)(i) of the Act at Rs. 13,52,434/-. Thereafter, the said return was processed by the Centralized Processing Center, 6. ITA No 584/Kol/2021 AY 2017-18 ITA No.585/Kol/2021 AY 2018-19 Rabindra Bharati Univerisity Co-op Credit Society Ltd. Bangalore u/s.143(1) of the Act on 12-07-2019, wherein claim of deduction u/s. u/s. 80P(2)(a)(i) of the Act was not considered and income of the assessee society was assessed at Rs 13,52,430/-. Thereafter, the assessee filed revised return on 23-08-2019 after correctly uploading the schedule on the portal of income-tax for claiming the deduction u/s. 80P(2)(a)(i) of the Act, but the said revised return was not considered and the rectification petition dt. 03-08-2019 was also rejected. 14. Aggrieved, the assessee preferred appeal before the ld. CIT(A), but failed to succeed as the ld. CIT(A) did not consider the relevant details and documents as well as the schedule(s) uploaded on the e-portal faceless compliance. 15. Aggrieved, now the assessee is in appeal before this Tribunal. 16. The Ld. Counsel for the assessee vehemently argued and filed written submissions. 17. Per contra, the ld. Departmental Representative vehemently argued supporting the orders of the lower authorities. 18. I have considered the rival contentions and perused the material placed on record before me. While dealing with assessee’s appeal (ITA No. 584/Kol/2021 for the AY 2017-18), I observed that the assessee trust was found to be eligible for deduction u/s. u/s. 80P(2)(a)(i) of the Act by the AO. I find that in the proceedings carried out u/s. 143(3) of the AY for the AY 2017- 18 there is no change of facts and figure to that of in the current / present appeal (ITA No. 585/Kol/2021 for the AY 2018-19). It seems that the ld. CIT(A) has not examined the documents filed/uploaded by the assessee on e-portal of income-tax. Therefore, in the interest of justice and being fair to both the parties I hereby restore all the issues raised in the instant appeal to the file of the ld. CIT(A) for adjudicating the issues afresh after considering the submissions made by the assessee as well as our given findings in 7. ITA No 584/Kol/2021 AY 2017-18 ITA No.585/Kol/2021 AY 2018-19 Rabindra Bharati Univerisity Co-op Credit Society Ltd. assessee’s appeal no. ITA No. 584/Kol/2021 for the AY 2017-18 and if the assessee is able to comply/satisfy then it is eligible for claim of deduction u/s. 80P(2)(a)(i) of the Act, then ld. CIT(A) shall decide the issues in accordance with law after giving the assessee adequate opportunity of being heard. Thus, all the grounds raised by the assessee in this appeal for the AY 2018-19 are allowed for statistical purpose. 19. In the result, the appeal of assessee in ITA No. 584/Kol/2021 for the AY 2017-18 is allowed and that in ITA No. 585/Kol/2021 for the AY 2018-19 is allowed for statistical purpose. आदेश ख ु ले यायपीठ म दनांक 11 -11-2022 को उ घो षत। The order pronounced in the open Court on 11 -11-2022 Sd/- (MANISHBORAD) ACCOUNTANT MEMBER Dated :11-11-2022 **PP/SPS आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1.अपीलाथ /Appellant/: Rabindra Bharati Univeristy Co-operative Credit Society Ltd.56A Brackpore Trunk Road, Kolkata- 700050. 2. यथ /Respondent/: Income Tax Officer, Ward 50(7), Kolkata 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त- अपील / CIT (A) 5. वभागीय त न ध, आयकर अपील य अ धकरण कोलकाता / DR, ITAT, Kolkata 6.गाड फाइल/Guardfile. By order/आदेश से, /True Copy/ Assistant Registrar ITAT, Kolkata