Sardar Patel Co-Operative Credit Society Ltd., Bardoli V. Deputy Commissioner of Income Tax Circle 2(3), Surat

ITA 645/SRT/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 4241 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-01-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 24-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AKSHAY M. MODI
• Keywords: Rule of consistency; Assessment record
• Section: 143(3); 2(19)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A.L.SAINI, AM आयकर अपील सं./ITA No.645/SRT/2023 (िनधाŊरणवषŊ / Assessment Year: (2014-15) (Physical Court Hearing) Sardar Patel Co-Operative Credit Society Ltd., Near Bank of Baroda, Opp. Jalaram Mandir, Station Road, Bardoli, Dist. Surat-394601 Vs. Deputy Commissioner of Income-tax, Circle-2(3), Surat, Aayakar Bhawan, Majura Gate, Surat-395001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAAAS 3444 H (अपीलाथŎ /Appellant) (ŮȑथŎ/Respondent) िनधाŊįरती की ओर से /Assessee by : Shri Akshay M. Modi, CA राजèव कȧ ओर से /Respondent by : Shri Vinod Kumar, Sr-DR सुनवाईकीतारीख/ Date of Hearing : 09/01/2024 घोषणाकीतारीख/Date of Pronouncement : 19/01/2024 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee, pertaining to assessment year 2014-15, is directed against the order passed by the National Faceless Appeal Centre, Delhi, [‘NFAC/Ld.CIT(A)’ for short] dated 25.07.2023, which in turn arises out of an assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’), dated 30.06.2016. 2. The grounds of appeal raised by assessee are as follows:- “1. On the facts and the circumstances of the case as well in law, the CIT(Appeals) erred in confirming the order passed by Deputy CIT, Circle 2(3), Surat (for the sake of brevity “The AO”) u/s 143(3) of the Act for the income assessed at Rs.1,25,31,690/- against the returned income at Rs. Nil denying the deductions claimed under Chapter VIA of the Act for the aggregate amount of Rs.3,16,59,726/-(subject to the availability of Gross Total Income), purely on misinterpretation and misconstruction of the provisions of law, misleading, misconceptual, arbitrary and perverse observations and hence, is liable to be quashed or annulled in toto. 2. On the facts and the circumstances of the case and as well in law, both the lower authorities have grievously failed to see and appreciate that the appellant society’s claim Page | 2 ITA No.645/SRT/2023 A.Y. 14-15 Sardar Patel Co-Op. Credit Society Ltd. of deduction u/s 80P(2)(d) of the Act had been towards the income earned by way of dividend and interest from investments with other co-operative societies for the aggregate amount of Rs.1,11,72,525/- (restricted to the availability of Gross Total Income) and therefore, the CIT(Appeals)s action confirming the AO’s order u/s 143(3) of the Act denying the deduction claimed under Chapter VIA of the Act merely on allegation of non-submission of the detailed breakup in respect of claim of deduction u/s 80P(2)(d) of the Act to the extent of Rs.1,11,72,525/- being perverse, arbitrary and mere allegatory, is without jurisdiction, bad in law, in-valid, illegal, unwarranted of facts and therefore, liable to be quashed. 3. On the facts and circumstances of the case and as well in law, both the lower authorities ought to have appreciated from the past assessment records and the orders of the appellate authorities that the appellant co.operative society is in existence under the status of registered co.operartive society and the income earned by way of dividend and interest was exclusively from investments with co.operative societies, within the meaning and definition of Section 2(19) of the Act and therefore, the action of the AO to invoke the provisions of Section 80P(4) of the Act and therefore, the assessment order u/s 143(3) passed by the AO denying the deduction claimed under Chapter VIA of the Act to the extent of Rs.3,16,59,426/- (subject to the Gross Total Income) on misconceived and an erroneous inference and purely on misinterpretation of the law settled on the issue of deduction u/s 80P(2)(d) of the Act in favour of the co.operative society, is without jurisdiction, perverse, bad in law, void ab initio, unsustainable and hence, liable to be quashed. 4. On the facts and in the circumstances of the case as well in law, both the lower authorities have erred in denying the benefit of deduction u/s 80P(2)(d) of the Act claimed for Rs.1,11,72,525/- (subject to the Gross Total Income) under gross misinterpretation, misconstruction, misapplication and misconceived and misconceptual application of the judicial pronouncements of the Apex Corut in Totagars Co.operative Sale Society Ltd. Vs. ITO (2010) 322 ITR 283 (SC) holding that “We are confining this judgment to the facts of the present case,” and hence, the order of the AO being without jurisdiction, unwarranted of facts, arbitrary, baseless, conjectural and patently in contravention to the law laid down by the jurisdictional High Court of Gujarat resulting into judicial indiscipline, is liable to be struck down. 5. On the facts and in the circumstances of the case as well in law, the learned AO has grievously failed to appreciate in the right, lawful and proper perspectives, the documentary evidences available in the assessment and/or appeal records and the detailed explanations substantiated by the documentary, authentic and cogent evidences submitted during the course of assessment and/or appeal proceedings, while arbitrarily and subjectively relied upon the Toptagar’s case contrary to the facts and circumstances of the case but ignoring the judicial pronouncements of the jurisdictional High Court/Tribunals on the same issue of claim of deduction u/s 80P(2)(d) of the Act and therefore, the AO’s order denying the claim of deduction u/s 80P(2)(d) of the Act, being patently in violation of “Rule of Consistency” is bad in law, without jurisdiction, illegal, arbitrary, and thus, liable to be quashed. 6. Your appellant further reserves its right to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of an appeal.” Page | 3 ITA No.645/SRT/2023 A.Y. 14-15 Sardar Patel Co-Op. Credit Society Ltd. 3. At the outset, Learned Counsel for the assessee, submitted that assessee has not claimed Nationalised Bank interest, to the tune of Rs.1,25,31,686/-, as a deduction under section 80P(2)(d) of the Act. The assessee has only claimed Co-Operative Bank`s interest and Co-Operative Dividends, under section 80P(2)(d) of the Act. The ld Counsel took us through the computation of total income of the assessee and explained that assessee has claimed deduction 80P(2)(d) of the Act only on interest and dividend income from co-operative societies and co-operative bank and assessee has never claimed deduction u/s 80P(2)(d) of the Act, on nationalized bank interest income. Hence, the question of disallowance of Rs.1,25,31,686/- does not arise. The ld Counsel also stated that assessee has shown Rs.1,25,31,686/- under the head income from other sources and paid the taxes thereon. 4. On the other hand, Ld. Sr.DR for the Revenue defended the order passed by NFAC/Ld. CIT(A). 5. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. The assessee submitted before us copy of acknowledgement of Income Tax Return, and Computation of total Income. However, the return of income filed by the assessee on 26.11.2014 has not been filed before us to verify the various deductions claimed/ not claimed by the assessee. We note that only issue involved in the grounds of appeal of the assessee is that the Assessing Office made addition to the tune of Rs.1,25,31,686/-assuming that assessee had claimed deduction 80P(2)(d) of the Act amounting to Rs.1,25,31,686/-. Page | 4 ITA No.645/SRT/2023 A.Y. 14-15 Sardar Patel Co-Op. Credit Society Ltd. 6. We note that during the course of assessment proceedings, it was observed by the Assessing Officer that Assessee- Society had derived interest income of Rs.4,42,72,177/-, out of this, Rs.1,25,31,686/-, was derived from Nationalized Banks and others as follows: (i) Corporation Bank of Rs.72,10,504/-, (ii) Dena Bank of Rs.10,19,966/-, (iii) O.B.C.Bank of Rs.30,21,394/-, (iv) Bank of Maharashtra of Rs.4,15,822/-, (v) GOI Bond of Rs.8,00,000/- and, (vi) DGVCL of Rs.64,000/-. Total of the above six transactions comes to Rs.1,25,31,686/-. We note that as per the provisions of section 80-P(2)(d) of the Act, the interest income earned out of investments/deposits with Co-Op. societies are only eligible for deduction. The interest income earned from other than Co-Op. Societies are not eligible for deduction under section 80-P(2)(d) of the Act. We note that assessee-society has not claimed the deduction under section 80-P(2)(d) of the Act, in respect of the above sum of Rs.1,25,31,686/-, rather the assessee has shown the above Rs.1,25,31,686/-, under the head ‘income from other sources’ and paid the taxes thereon, hence the question of disallowance does not arise. Based on these facts and circumstances, we delete the addition of Rs.1,25,31,686/-. 7. In the result, appeal filed by the assessee is allowed. Order is pronounced on 19/01/2024 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat/िदनांक/ Date: 19/01/2024 Dkp Outsourcing Sr.P.S. Page | 5 ITA No.645/SRT/2023 A.Y. 14-15 Sardar Patel Co-Op. Credit Society Ltd. Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat