Income Tax Officer, Nashik V. Nashik District Labour Society ,Co-op Federation, Nashik

ITA 722/PUN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2137 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARSHAL A NASIKKAR
• Section: 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI , AM AND SHRI VIKAS AWASTHY, JM . / I TA NO. 722 /PUN/20 17 / ASSESSMENT YEAR : 2013 - 14 THE INCOME TAX OFFICER, WARD 1(2), NASHIK. ....... / APPELLANT / V/S. NASHIK DISTRICT LABOUR SOCIETY , CO - OP. FEDERATION. SHRAM - SAHAKAR, CHUMBLE MARG, TIDK E COLONY, NASHIK - 422 002. PAN : AAABN0028M / RESPONDENT A SSESSEE BY : SHRI HARSHAL A. NASIKKAR REVENUE BY : SHRI RAJESH GAWALI / DATE OF HEARING : 17.06 .2019 / DATE OF PRONOUNCEMENT : 19 .06 .2019 / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL) - 1, NASHIK DATED 10.01.2017 FOR THE ASSESSMENT YEAR 2013 - 14. 2 ITA NO. 722 /PUN/20 17 A.Y. 2013 - 14 2. THE SOLITARY ISSUE ASSAILED BY THE REVENUE IN APPEAL IS AGAINST DELETING THE ADDITION OF RS.1,29,94,871/ - MADE U/S.80P(2)(A)(VI) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. SHRI HARSHAL A. NASIKKAR APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ISSUE RAISED IN THE PRESENT APPEAL BY DEPARTMENT IS SQUARELY COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE. THE LD. A R SUBMITTED THAT THE ISSUE OF ASSESSEES CLAIM OF DEDUCTION U/S.80P(2)(A)(VI) OF THE ACT WAS FIRST RAISED IN ASSESSMENT YEAR 1980 - 81. THE TRIBUNAL IN APPEAL BY ASSESSEE IN ITA NO.1064/PUN/1984 REPORTED AS 18 ITD 354 DECIDED THIS ISSUE IN FAVOUR OF THE ASSE SSEE. THEREAFTER, IN THE SUBSEQUENT ASSESSMENT YEAR S , THE COMMISSIONER OF INCOME TAX (APPEALS) HAS BEEN CONSISTENTLY DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RESPECT OF DEDUCTION U/S.80P(2)(A)(VI) OF THE ACT. THE LD. AR IN SUPPORT OF HIS C ONTENTION PLACED ON RECORD COPY OF ORDER DATED 24.02.2014 BY THE TRIBUNAL COMMON FOR ASSESSMENT YEARS 2006 - 07, 2008 - 09 AND 2009 - 10 IN ITA NO S .62, 63 & 64/PN/2013 BY THE DEPARTMENT AT PAGES 14 TO 18 OF THE PAPER BOOK. THE LD. AR FURTHER REFERRED TO THE ORDE RS OF TRIBUNAL DATED 23.09.2016 IN APPEAL BY THE DEPARTMENT IN ITA NO.1815/PN/2016 FOR THE ASSESSMENT YEAR 2012 - 13 AND ITA NO.1808/PUN/2017 F OR THE ASSESSMENT YEAR 2014 - 15 DECIDED ON 21.08.2018. 4. ON THE OTHER HAND, SHRI RAJESH GAWALI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER. THE LD. DR SUBMITTED THAT DEDUCTION U/S.80P(2)(A)(VI) OF THE ACT IS NOT ALLOWABLE TO THE ASSESSEE. THE 3 ITA NO. 722 /PUN/20 17 A.Y. 2013 - 14 REVENUE HAS FILED APPEAL BEFORE THE HONBLE HIGH COURT AGAINST T HE ORDER OF TRIBUNAL. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. THE REVENUE IS IN APPEAL AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEAL) IN ALLOWING THE CLAIM OF DEDUCTION U/S.80P(2)(A)(VI) OF THE ACT. THE ASSESSEE IS APEX CO - OPERATIVE LABOUR SOCIETY ENGAGED IN COLLECTIVE DISPOSAL OF LABOUR AND PROVIDING VARIOUS SERVICES TO THE MEMBER LABOUR SOCIETIES. THE MAIN OBJECTS OF THE ASSESSEE INTER ALIA INCLUDE ORGANIZATION OF SKILLED, UNSKILLED LABOURS & ACQUISITION/EQUITABLE DIST RIBUTION OF WORK ORDERS ALLOTTED BY VARIOUS GOVT. DEPARTMENTS. THE ASSESSEE ALSO ACTS AS LIAISON ING AGENCY BETWEEN WORK AWARDING AGENCIES AND PRIMARY SOCIETIES ETC. THE ISSUE OF ASSESSEES ELIGIBILITY FOR CLAIMING DEDUCTION U/S. 80P(2)(A)(VI) OF THE ACT WA S FIRST ADJUDICATED BY THE CO - ORDINATE BENCH OF THE TRIBUNAL IN ASSESSMENT YEAR 1980 - 81 (SUPRA) . THE TRIBUNAL DE CIDED THE ISSUE IN FAVOUR OF ASSESSEE BY HOLDING AS UNDER: 10. WE HAVE EXAMINED THE FACTS. IN OUR OPINION THE ASSESSEE IS ENTITLED TO EXEMPTI ON UNDER S.80P(2)(A)(VI) R/W PROVISO. THE ASSESSEE IS ENGAGED IN PROVIDING THE COLLECTIVE LABOUR OF ITS MEMBERS. FOR THIS PURPOSE THE MEMBER NEED NOT BE THE PERSON PROVIDING THE INDIVIDUAL LABOUR BUT NEED BE ONE WHO PROVIDES COLLECTIVE LABOUR. THE ASSESSEE GETS 1 PER CENT OF CONTRACT AS ITS COMMISSION FOR THE SERVICES OF CO - ORDINATING THE VARIOUS ACTIVITIES. NOMINATIONS TO ZILLA PARISHAD, COLLECTOR ETC. ARE PART OF THE JOB FOR WHICH THE ASSESSEE GETS THE INCOME. SUCH INCOME IS FROM BUSINESS. THE ASSESSEE IS THUS ENGAGED IN PROVIDING COLLECTIVE LABOUR OF ITS MEMBER SOCIETIES. REGARDING THE VOTING RIGHTS, THE PROVISO APPLIES ONLY WHEN THE INDIVIDUAL PROVIDES HIS LABOUR INDEPENDENTLY OF OTHERS AND SUCH INDIVIDUAL IS A MEMBER OF THE ASSESSEE SOCIETY. THERE IS NO SUCH THING IN THIS CASE. ALTHOUGH INDIVIDUALS CONTRIBUTING INDIVIDUAL LABOUR HAVE NO DIRECT VOTING RIGHTS, THE NOMINEES OF THE PRIMARY SOCIETIES HAVING VOTING RIGHTS IN THE MEETING OF THE ASSESSEE SOCIETY DERIVE THEIR AUTHORITY FROM THE INDIVIDUAL MEMBER S OF THE PRIMARY SOCIETIES. WE AGREE WITH SHRI INAMDAR THAT THE PROVISIONS OF SECTION 80P REGARDING EXEMPTION CANNOT BE WHITTLED DOWN BY THE ALLEGED NON FULFILLMENT OF CONDITIONS REGARDING RESTRICTION OF VOTING RIGHTS. 4 ITA NO. 722 /PUN/20 17 A.Y. 2013 - 14 6. THEREAFTER, IN ASSESSMENT YEAR 2006 - 07, 2008 - 09 AND 2009 - 10, THE TRIBUNAL AGAIN DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY FOLLOWING THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007 - 08 IN ITA NO. 195/PN/2011. THEREAFTER, THE TRIBUNAL HAS BEEN CONSISTENTLY HOLDING ASS ESSEE ELIGIBLE FOR CLAIMING DEDUCTION U/S.80P(2)(A)(VI) OF THE ACT BY FOLLOWING ITS EARLIER ORDERS. 7. UNDISPUTEDLY, THERE HAS BEEN NO MATERIAL CHANGE IN THE FACTS AND THE PROVISIONS OF SECTION DETERMINING ELIGIBILITY FOR CLAIMING BENEFIT OF THE DEDUCTIO N IN QUESTION. WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DECIDING THIS ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE ORDER OF TRIBUNAL. THUS, IN VIEW OF THE FACTS AND DECISIONS OF TRIBUNAL IN EARLIER ASSESSM ENT YEARS , THE IMPUGNED ORDER IS UPHELD AND APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF ANY MERITS. 8 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRO NOUNCED ON WEDNESDAY , THE 19TH DAY OF JUNE , 201 9. SD/ - SD/ - ( / ANIL CHATURVEDI ) ( /VIKAS AWASTHY ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; / DATED : 19 TH JUNE , 2019 SB 5 ITA NO. 722 /PUN/20 17 A.Y. 2013 - 14 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 1, NASHIK. 4. THE PR.CIT - 1, NASHIK. 5 . , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 6 ITA NO. 722 /PUN/20 17 A.Y. 2013 - 14 DATE 1 DRAFT DICTATED ON 18 .0 6 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 19.06 .2019 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER