Appeal details
Counselvise Citation
[2023] 100 COUNSELVISE.COM (IT) 5874 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-10-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
C
Next Hearing Date
30-10-2023
Assessment Year
2017-2018
Appeal Filed On
11-09-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC - C” BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT ITA No.678/Bang/2023 Assessment Year : 2017-18 M/s. Dalimbe Belegarar Pattin Sahakari Sangh Niyamith, No.Dudunakar Complex, Main Road, Kaladagi – 587 204. PAN : AABAD 1876 D Vs.ITO, Ward –1, Bagalkot. APPELLANTRESPONDENT Assessee by:Shri.V. Sridhar, CA Revenue by :Shri.Ganesh R Ghale, Advocate, Standing Counsel for Revenue. Date of hearing:31.10.2023 Date of Pronouncement:31.10.2023 O R D E R This appeal at the instance of the assessee is directed against CIT(A)’s order dated 26.07.2023, passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2017-18. 2. The grounds raised by the assessee are as follows: 1.The Ld. Commissioner of Income Tax (Appeals) erred in law as well as on facts in rejecting the genuine claim of the appellant in respect of deduction u/s 80P(2)(a)(i) to the extent of Rs.20,09,370.00 as claimed by the appellant. The appellant prays for grant of the deduction as claimed. 2.The Ld. CIT Appeal has held that "category of member" is vital for allowing the claim of deduction u/s 80P. Plain reading of the provisions of S.80 P shows that it simply refers to "members". It does not make any bifurcation of members. When the statute does not differentiate between different categories of members, for allowing or otherwise of claim of ITA No.678/Bang/2023 Page 2 of 4 deduction u/s 80P(2)(a)(i), it is not within the powers of AO to make such bifurcation and disallow the deduction claimed u/s 80P. 3.Each of the above grounds is without prejudice to one another and the appellant craves leave to add, delete, amend or otherwise modify or withdraw one or more of the above grounds either before or at the time of hearing of this appeal. 3. Brief facts of the case are as follows: Assessee is a co-operative society registered under the Karnataka Co- operative Societies Act, 1959. For the Assessment Year 2017-18, the return of income was filed on 17.10.2017 declaring ‘Nil’ income, after claiming deduction under section 80P of the Act, amounting to Rs.35,53,262/-. The assessment was completed under section 143(3) of the Act vide order dated 23.08.2018. The AO in the said Assessment Order, denied the claim of deduction under section 80P of the Act on the ground that assessee was dealing with non-members. The AO relied on the judgment of the Hon’ble Apex Court in the case of Citizen Co-operative Society reported in 397 ITR 1 (SC). 4. Aggrieved, assessee filed appeal before the First Appellate Authority (FAA). The CIT(A), by following his predecessor’s order for the immediately preceding Assessment Year viz., Assessment Year 2016-17, proportionately allowed deduction under section 80P(2)(a)(i) of the Act. The relevant finding of the CIT(A) reads as follows: “5.3 It is seen that the facts and issues involved in impugned AY 2017-18 are similar and appellant has made similar claims. Hence, reliance is placed upon the above referred order of the NFAC for AY 2016-17. On similar lines, it is noted that regular members along with 15% associate / nominal members form 43.45% of total membership (28.45 + 15%). Since, the appellant did not provide the details of business carried out with regular members and associate / nominal members, the AO is directed to determine ITA No.678/Bang/2023 Page 3 of 4 the proportionate allowability of deductions u/s 80P of the Act to 43.45% of the total profit of the society. The surplus associate / nominal members constitute 56.55% of the total membership are not treated as members to be eligible for deduction u/s 80P(2)(a)(i) of the Act for FY 2016-17. Therefore. the AO is directed to determine the proportionate disallowance of deduction u/s 80P of Act to 56.55% of the total profit of the society.” 5. Aggrieved by the order of the CIT(A), assessee has preferred the present appeal before the Tribunal. The learned AR submitted that for the immediately preceding Assessment Year viz., Assessment Year 2016-17, the Tribunal has restored the matter to the CIT(A) to reconsider the claim of deduction under section 80P(2) of the Act. The learned AR submitted that in the interest of justice and equity, the matter may be restored to the AO to reconsider the claim of the assessee. 6. The learned Standing Counsel supported the orders of the AO and the CIT(A). 7. I have heard the rival submissions and perused the material on record. On identical facts in assessee’s own case for Assessment Year 2016-17 in ITA No.3333/Bang/2018 (order dated 08.0.2019), the Tribunal had restored the issue to the CIT(A) for fresh consideration. The relevant finding of the Tribunal reads as follows: “5. I have considered the rival submissions. In the light of above discussion, I Feel that in the interest of justice, the mater should go back to the file of CIT (A) for a fresh decision. Hence, I set aside the order of CIT (A) and restore this matter back to his file for a fresh decision with the direction that sufficient opportunity should be provided by him to both sides and the assessee should provide complete detail with cogent evidence in respect of business carried out by the assessee with nominal members and general public, if any. The assessee should also demonstrate about the difference in facts of the present case and facts in the case of Citizen Co — Operative Society Limited vs. ACIT (Supra). The AO can also demonstrate ITA No.678/Bang/2023 Page 4 of 4 as to how the facts are similar. Thereafter the CIT I (A) should pass speaking and reasoned order as per law.” 8. In light of the above order of the Tribunal in assessee’s own case, I am of the view that the matter needs to be reconsidered by the AO. Accordingly, the issue raised before the Tribunal is restored to the files of the AO. It is ordered accordingly. 9. In the result, appeal filed by the assessee is allowed for statistical purposes. Pronounced in the open court on the date mentioned on the caption page. Sd/- Sd/- (LAXMI PRASAD SAHU) (GEORGE GEORGE K) Accountant Member Vice President Bangalore. Dated: 31.10.2023. /NS/* Copy to: 1.Appellants2.Respondent 3.DRP4.CIT 5.CIT(A)6.DR, ITAT, Bangalore. 7. Guard file By order Assistant Registrar, ITAT, Bangalore.
Mehul