THE BHANOKI CO-OP.AGRI.MULTIPUPOSE SOCIETY LTD, , PHAGWARA V. DEPUTY COMMISSIONER OF INCOME ATX , PHAGWARA

ITA 588/ASR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7129 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-01-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 12-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMAR
• Assessee Lawyers: Y K SUD
• Keywords: Condonation of delay; Bonafide mistake
• Section: 80P

Judgement Text

.IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SH. N. K. SAINI, HONBLE VICE PRESIDENT ITA NO. 588/ASR./2017 : ASSTT. YEAR : 2011-12 THE BHANOKI CO-OP, AGRI, MULTIPURPOSE SOCIETY LTD., VPO BHANOKI, PHAGWARA VS DCIT, PHAGWARA (APPELLANT) (RESPONDENT) PAN NO. AADAT0546N ASSESSEE BY : SH. Y.K. SUD, AR REVENUE BY : SH. M.S. PARMAR, DR DATE OF HEARING : 15.01.2019 DATE OF PRONOUNCEMENT : 16.01.2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 27.09.2016 OF LD. CIT(A)-2, JALANDHAR. 2. THE REGISTRY IS POINTED OUT THAT THE APPEAL FILE D BY THE ASSESSEE IS BARRED BY LIMITATION BY 277 DAYS. THE ASSESSEE F URNISHED THE APPLICATION FOR CODONATION OF DELAY STATING THEREIN AS UNDER: SUB: APPLICATION FOR CONDONATION OF DELAY IN FILIN G THE APPEAL MOST RESPECTFULLY IT IS SUBMITTED AS UNDER: 1. THAT THE APPEAL IN THE ABOVESAID CASE WAS DUE TO BE FILED BY 10.12.2016 I.E. WITHIN 60 DAYS OF 10.10.2016 WHEN T HE ORDER OF THE CIT(A) WAS SERVED ON OUR COUNSEL IN APPEAL SH. Y.K. SUD C.A. 2. THAT SH. Y.K. SUD C.A. RECEIVED THAT ORDER AND KEPT IT IN HIS FILE BUT DUE TO AN OVERSIGHT FAILED TO COMMUNICATE THE O RDER TO US SINCE WE WERE NOT HIS REGULAR CLIENTS BUT ONLY ENGA GED HIM FOR FILING THE APPEAL BEFORE CIT(A). ITA NO. 588/ASR./2017 THE B HANOKI COOP 2 3. THAT IN MEANTIME THE ASSESSMENT FOR ASST. YEAR 2015 -16 WAS FINALIZED BY ACIT VIDE HER ORDER DATED 25.07.2017 S ERVED ON US ON 16.08.2017 WHEREIN THE REFERENCE TO THE ORDER OF THE CIT(A) WAS MADE FOR ASST. YEAR 2011-12 FOR MAKING A DISALLOWANCE OF DEDUCTION U/S 80-P. 4. THAT WHEN THE ORDER OF 2015-16 WAS SENT TO MR. Y.K. SUD FOR FILING THE APPEAL BEFORE CIT(A) BY OUR LOCAL COUNSE L MR. PUNEET DUGGAL C.A. MR. Y.K. SUD INFORMED US THAT CI T(A) ORDER OF 2011-12 WAS SERVED UPON HIM BY THE CIT(A) OFFICE BUT DUE TO AN OVERSIGHT HIS OFFICE COULD NOT INFORM US ABOUT THE ORDER AND IT KEPT ON LYING IN HIS FILE. 5. THAT ON COMING TO KNOW ABOUT THE ORDER OF CIT(A) WE IMMEDIATELY GAVE INSTRUCTIONS TO MR. Y.K. SUD C.A. TO FILE THE APPEAL BEFORE ITAT ALONGWITH THE APPLICATION FO R CONDONATION OF DELAY. 6. THAT THE AFFIDAVIT OF MR. Y.K. SUD IS ENCLOSED HERE WITH EXPLAINING THE DELAY DUE TO OVERSIGHT OF THE OFFICE IS ENCLOSED HEREWITH FOR YOUR KIND PERUSAL. 7. THAT THE APPEAL AGAINST THE ORDER OF CIT(A) WHICH W AS DUE TO BE FILED WITHIN 60 DAYS OF 10.10.2016 IS BEING F ILED NOW WHICH IS LATE WHICH IS LATE BY 278 DAYS. 8. THAT IT IS RESPECTFULLY PRAYED THAT THE DELAY IN FI LING OF THE APPEAL AS MENTIONED IN PARA 7 MAY KINDLY BE CONDONE D SINCE THE DELAY IS NOT ATTRIBUTABLE TO US AND HAS BEEN CA USED DUE TO THE OVERSIGHT AND MISTAKE OF THE OFFICE OF OUR C OUNSEL MR. Y.K. SUD C.A. FOR THE BHANOKI CO-OP AGRI. MULTIPURPOSE SOCIETY LT D. SD/- SECRETARY THROUGH SD/- Y.K. SUD C.A. COUNSEL FOR THE ASSESSEE. ITA NO. 588/ASR./2017 THE B HANOKI COOP 3 3. THE ASSESSEE ALSO FURNISHED THE AFFIDAVIT OF THE LD. COUNSEL FOR THE ASSESSEE, STATING THEREIN AS UNDER:- AFFIDAVIT I YOGINDER KUMAR SUD C.A. S/O LATE SH. D.D. SUD A DVOCATE DO SOLEMNLY AFFIRM AS UNDER: 1. THAT I AM A CHARTERED ACCOUNTANT BY PROFESSION AND IS CARRYING ON MY PROFESSIONAL PRACTICE SINCE 1975. 2. THAT THE BHANOKI CO-OP AGRI. MULTIPURPOSE SOCIETY L TD. PHAGWARA ENGAGED ME COUNSEL TO FILE AND ARGUE THEIR INCOME TAX APPEAL BEFORE CIT(A) JALANDHAR FOR ASST. YEAR 2011-12. 3. THAT I PREPARED AND ARGUED THEIR APPEAL BEFORE CIT( A)-2 JALANDHAR AND THE ORDERS IN THE APPEAL WAS SERVED O N MY OFFICE BY CIT(A) ON 10.10.2016 AND THE ORDER OF THE CIT(A) WAS KEPT IN THE FILE OF THE ASSESSEE BY MY STAFF AN D THEY FAILED TO INFORM THE ASSESSEE ABOUT THE ORDER. 4. THAT IT WAS ONLY IN THE FIRST WEEK OF SEPTEMBER THE ASSESSEE CONTACTED ME THROUGH THEIR LOCAL COUNSEL MR. PUNEET DUGGAL C.A. TO FILE THE APPEAL BEFORE CIT(A) JALANDHAR FOR ASST. YEAR 2015-16 WHERE SIMILAR DISALLOWANCE WAS MADE. 5. THAT IN THE ASSESSMENT ORDER FOR 2015-16 A REFERENC E WAS MADE TO THE ORDER OF CIT(A) FOR ASST. YEAR 2011-12 AND AFTER READING THE SAID ORDER WHEN I CALLED FOR THE FILE F ROM MY STAFF I NOTICED THAT THE ORDER OF CIT(A) FOR ASST. YEAR 2011- 12 WAS LYING THERE AND MY STAFF HAD NOT INFORMED TH E ASSESSEE ABOUT THE ORDER. 6. THAT THE ASSESSEE INSTRUCTED ME TO FILE THE APPEAL BEFORE ITAT WITH A REQUEST TO CONDONE THE DELAY. ITA NO. 588/ASR./2017 THE B HANOKI COOP 4 7. THAT THE DELAY IN FILING THE APPEAL IS SOLELY ATTRI BUTABLE TO THE BONAFIDE MISTAKE OF MY STAFF AND IT IS PRAYED T HAT A LIBERAL VIEW BE TAKEN TO CONDONE THE DELAY. 3. DURING THE COURSE OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE CONTENTS OF THE AFORESAID APPLICATIO N AND THE AFFIDAVIT DATED 11 TH SEPTEMBER, 2017. 4. IN HIS RIVAL SUBMISSION, THE LEARNED DR OPPOSED THE CONDONATION OF DELAY AND STATED THAT THERE WAS NO REASONABLE CA USE. 5. IN THE PRESENT CASE, IT APPEARS THAT THE IMPUGNE D ORDER WAS NOT SERVED UPON THE ASSESSEE BUT ON THE COUNSEL OF THE ASSESSEE. THE SAID COUNSEL COULD NOT INFORM THE ASSESSEE AND THEREFORE THE APPEAL BEFORE THE LEARNED CIT(A) COULD NOT BE FILED WITHIN TIME. I, THEREFORE, CONSIDERING THIS VITAL FACT THAT THE ASSESSEE IS NO T ON FAULT FOR FILING THE APPEAL BELATED, CONDON THE DELAY AND THE APPEAL IS ADMITTED. 6. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF RS. 177069/- MADE BY THE AO U/S80-P OF THE INCOME TAX ACT, 1961. 2. THAT CIT(A) WHILE SUSTAINING THE DISALLOWING FAI LED TO APPRECIATE THAT THE PROVISIONS OF SECTION 80P(2)(A) IV WERE DULY APPLICABLE TO THE RENT CHARGES RECEIVED ON THE AGRI CULTURAL IMPLEMENTS FROM THE MEMBERS OF THE SOCIETY. 3. THAT THE ORDERS OF CIT(A) AND AO ARE AGAINST THE LAW AND FACTS OF THE CASE. 7. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL R ELATES TO THE SUSTENANCE OF DISALLOWANCE OF RS. 177069/- UNDE R SECTION U/S80-P OF THE INCOME TAX ACT, 1961. ITA NO. 588/ASR./2017 THE B HANOKI COOP 5 8. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE DERIVED INCOME FROM BANKING BUSINESS AND FILED THE RETURN OF INCOM E DECLARING NIL INCOME AFTER CLAIMING DEDUCTION UNDER SECTION 80P O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). LAT ER ON THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD EARNED RENTAL INCO ME OF MACHINERY AMOUNTING TO RS. 1,77,069/-. HE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE DEDUCTION CLAIMED UNDER SECTION 80P OF THE ACT ON THE AFORESAID AMOUNT SHOULD NOT BE DISALLOWED. THE ASSE SSEE SUBMITTED THAT THE INCOME AROSE FROM THE RENTAL INCOME OF AGR ICULTURAL EQUIPMENTS/IMPLEMENTS GIVEN ON RENTAL TO THE MEMBER S, THEREFORE, IT WAS ELIGIBLE BY DEDUCTION UNDER SECTION 80P(A)(2)(I V) OF THE ACT. HOWEVER, THE AO DID NOT FIND MERIT IN THE SUBMISSIO N OF THE ASSESSEE AND MADE THE DISALLOWANCE. 9. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND SUBMITTED THAT THE OBJECT OF THE ASSESSE E WAS TO PROVIDE THE AGRICULTURAL SERVICES AND BANKING SERVICES TO I TS MEMBERS AND THAT ONE OF THE OBJECT OF THE ASSESSEE SOCIETY WAS TO PR OVIDE AGRICULTURAL MACHINERY FROM A COMMON POOL SUCH AS TRACTOR, SEED DRILL, SPRAY PUMPS AND OTHER AGRICULTURAL MACHINERY. IT WAS FURT HER SUBMITTED THAT THE ASSESSEE PURCHASED IMPLEMENTS WHICH WERE KEPT I N COMMON POOL FOR USE OF THE MEMBERS AFTER CHARGING THE RENT WHIC H WAS CLEARLY EXEMPT UNDER SECTION 80P OF THE ACT. THE LEARNED CI T(A) DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE BY OBSERVI NG THAT THE RENTAL INCOME FROM MACHINERY EARNED BY THE ASESSEE SOCIETY DID NOT FALL WITHIN THE SCOPE OF THE PROVISIONS OF SECTION 80P(A )(2)(IV) OF THE ACT. ITA NO. 588/ASR./2017 THE B HANOKI COOP 6 10. NOW THE ASSESSEE IS IN APPEAL. 11. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMI TTED THAT THE IMPLEMENTS WERE PURCHASED BY THE ASSESSEE WHICH WER E GIVEN TO THE MEMBERS, THEREFORE, THE DEDUCTION WAS ALLOWABLE UND ER SECTION 80P(A)(2)(IV) OF THE ACT. 12. IN HIS RIVAL SUBMISSIONS, THE LEARNED DR SUPPOR TED THE ORDERS OF THE AUTHORITIES BELOW. 13. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, THE WHOLE CONTROVERSY REVOLVES AROUND THE DEDUCTION UNDER SECTION 80P OF THE ACT. THE PROVISIONS CONTAI NED SECTION 80P(A)(2)(IV) OF THE ACT, 1961 READS AS UNDER:- 80P. (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A COOP ERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORD ANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, THE SUMP S SPECIFIED IN SUB-SECTION (2), IN COMPUTING THE TOTAL INCOME OF T HE ASSESSEE. (2). THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL BE THE FOLLOWING, NAMELY:-- ---- ---- ---- (IV) THE PURCHASE OF AGRICULTURAL IMPLEMENTS, SEEDS , LIVESTOCK OR OTHER ARTICLES INTENDED FOR AGRICULTUR E FOR THE PURPOSE OF SUPPLYING THEM TO ITS MEMBERS, OR. ITA NO. 588/ASR./2017 THE B HANOKI COOP 7 14. FROM THE AFORESAID PROVISIONS, IT IS CLEAR THAT THE DEDUCTION UNDER SECTION 80P IS TO BE ALLOWED TO A COOPERATIVE SOCIETY WHOSE GROSS TOTAL INCOME IS DERIVED FROM THE PURCHASE OF AGRICULTURAL IMPLEMENTS, SEEDS, LIVESTOCK OR OTHER ARTICLES INTE NDING FOR AGRICULTURAL PURPOSE OF SUPPLYING THEM TO ITS MEMBE RS. IN THE PRESENT CASE, THE ASSESSEE PURCHASED THE AGRICULTURAL IMPLE MENTS WHICH WERE SUPPLIED TO ITS MEMBERS AND THE INCOME DERIVED FROM SUPPLYING OF THOSE IMPLEMENTS TO ITS MEMBERS IN THE FORM OF RENT AL WAS SHOWN AS AN INCOME WHICH WAS CLEARLY EXEMPT UNDER SECTION 80P(A )(2)(IV) OF THE ACT THEREFORE, THE LEARNED CIT(A) WRONGLY SUSTAINED THE DISALLOWANCE MADE BY THE AO. IN THAT VIEW OF THE MATTER, THE IMP UGNED DISALLOWANCE IS DELETED. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. (ORDER PRONOUNCED IN THE COURT ON 16/01/2019) SD/- (N. K. SAINI) VICE PRESIDENT DATED: 16/01/2019 SH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO. 588/ASR./2017 THE B HANOKI COOP 8 DATE INITIAL 1. DRAFT DICTATED ON 15.01.2019 PS 2. DRAFT PLACED BEFORE AUTHOR 16.01.2019 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 11. DATE OF UPLOADING