THE KANDOWALI COPERTAIVE (L&C) SOCIETY, AMRITSAR V. INCOME TAX OFFICER WARD 4(2) , AMRITSAR

ITA 736/ASR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7082 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2000-2001
• Appeal Filed On: 25-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SUDHIR MEHRA
• Section: 44AD; 80P; 144; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 736/ASR/2017 ASS ESSMENT YEAR: 2000-01 THE KANDOWALI CO-OP (L&C) SOCIETY LTD., TEHSIL AJNALA, AMRITSAR [PAN: AAAAT 4750F] VS. INCOME TAX OFFICER, WARD 4(2), AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR MEHRA ( ADV.) RESPONDENT BY: SH. CHARAN DASS, (D.R.) DATE OF HEARING: 20.12.2018 DATE OF PRONOUNCEMENT: 15.01.201 9 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-2, AMRITSAR ( CITA) FOR SHORT) DATED 21.07.2017, DISMISSING THE ASSESSEES APPEAL CONTES TING THE ORDER UNDER SECTION 154 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAF TER) DATED 14.12.2015 FOR ASSESSMENT YEAR (A.Y.) 2000-01. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE IS A COOPERATIVE SOCIETY REGISTERED UNDER THE COOPERATIVE SOCIETIES ACT AS A LABOUR AND CONSTRUCTION SOCIETY SINCE 08.02.1974 (PB PG. 20), ENGAGED IN CONSTRUCTI ON ACTIVITY. ITS INCOME TO THE EXTENT ATTRIBUTABLE TO THE COLLECTIVE DISPOSAL OF T HE LABOUR OF ITS MEMBERS IS DEDUCTIBLE U/S. 80P(2)(A)(VI), I.E., IN COMPUTING I TS TOTAL INCOME UNDER THE ACT, ITA NO. 736/ASR/2017 (AY 2000-01) THE KANDOWALI CO-OP (L&C) SOCIETY LTD V. ITO 2 WHICH IS BEING CLAIMED AND ALLOWED TO IT, AS STATED , FOR THE PAST SEVERAL YEARS. FOR THE YEAR UNDER REFERENCE, ITS INCOME WAS ASSESSED (VIDE ORDER DATED 07.12.2007) U/S. 144 AT AN INCOME OF RS.1,49,922/- (PB PGS. 12- 14). THIS INCOME WAS COMPUTED, IN THE ABSENCE OF REGULAR ACCOUNTS, BY AP PLYING A PRESUMPTIVE RATE OF 8% U/S. 44AD ON THE GROSS RECEIPT OF RS.18.74 LACS, I.E., WITHOUT ALLOWING DEDUCTION U/S. 80P(2)(A)(VI), AS CLAIMED BY THE ASS ESSEE PER ITS RETURN OF INCOME (PB PGS. 8-9). IN APPEAL, THE FIRST APPELLATE AUTHO RITY ALLOWED THE SAME, ON PROPORTIONATE BASIS, ON 70% OF THE TOTAL CONTRACT R ECEIPT OF RS.20,71,203/-. THE INCOME ATTRIBUTABLE TO THE BALANCE 30% RECEIPT WAS REGARDED BY HIM, IN LINE WITH THE CONSISTENT VIEW BY THE REVENUE, AS ON ACCOUNT O F SUPPLY OF MATERIAL AND, THUS, TAXABLE, DETERMINING THE SAME AT RS.49,709/- (PB PGS. 15-19), ON WHICH THE ASSESSING OFFICER (AO), WHILE GIVING APPEAL EFFECT, DETERMINED A TAX DEMAND OF RS.15,010/- VIDE ORDER DATED 14.12.2015 (PB PG. 27) . THE ASSESSEES CONTENTION, PER APPLICATION U/S. 154, THAT IT BE ALLOWED DEDUCT ION U/S. 80P WAS DISALLOWED BY HIM ON THE GROUND THAT NO SUCH DIRECTION HAD BEEN I SSUED BY THE FIRST APPELLATE AUTHORITY VIDE ITS ORDER DATED 12.03.2014, DETERMI NING THEREBY, IN FACT, THE ASSESSEES TAXABLE INCOME AT RS.49,709/-. THE SAME BEING CONFIRMED IN FIRST APPEAL, AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL . 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE ASSESSEES CASE IS THAT EVEN ADMITTING THE TAXA BLE INCOME OF RS.49,709/-, IT IS YET ENTITLED TO DEDUCTION U/S. 80P(2)(C)(II), WHEREBY ANY INCOME ARISING TO A COOPERATIVE SOCIETY FROM ANY ACTIVITY NOT SPECIFIED IN CLAUSES (A) AND (B) ON SECTION 80P(2), IS ELIGIBLE FOR A FLAT DEDUCTION OF RS.50,0 00/-, ALLOWING WHICH WOULD RESULT IN NIL INCOME, I.E., AS RETURNED. THE REVENUES CAS E, ON THE OTHER HAND, IS THAT NO DEDUCTION U/S. 80P(2) STANDS ALLOWED TO THE ASSESSE E BY THE FIRST APPELLATE AUTHORITY, ITA NO. 736/ASR/2017 (AY 2000-01) THE KANDOWALI CO-OP (L&C) SOCIETY LTD V. ITO 3 SO THAT THERE IS NO QUESTION OF ANY DEDUCTION BEING ALLOWED TO IT, MUCH LESS U/S. 154, EITHER U/S. 80P(2)(A)(VI) OR U/S. 80P(2)(C)(II ). WE ARE UNABLE TO UNDERSTAND THE CASE OF EITHER PAR TY BEFORE US. THERE IS, FIRSTLY, NO QUESTION OF THE ASSESSEE BEING NOT ELIG IBLE FOR DEDUCTION U/S. 80P(2)(A)(VI). THE TREATMENT OF ITS INCOME, TO THE EXTENT OF 70% THEREOF, AS NON TAXABLE BY THE FIRST APPELLATE AUTHORITY IN QUANTUM PROCEEDINGS, IS ONLY ON IT BEING REGARDED AS ON ACCOUNT OF THE COLLECTIVE DISPOSAL O F LABOUR OF ITS MEMBERS, ELIGIBLE FOR DEDUCTION U/S. 80P(2)(A)(VI). THIS IS CLEAR FRO M PARA 6 OF THE SAID ORDER. IT IS THEREFORE INCORRECT FOR THE REVENUE TO CONTEND THAT THE ASSESSEE IS NOT ELIGIBLE FOR ANY DEDUCTION U/S. 80P(2)(A)(VI), DISMISSING ITS A PPLICATION U/S. 154 ON THAT BASIS. EQUALLY UNTENABLE IS THE ASSESSEES STAND. THE AO, BOUND BY THE ORDER OF THE FIRST APPELLATE AUTHORITY, CANNOT TRAVEL OUTSIDE THE DIRE CTION/S ISSUED BY THE LATTER, WHO WE FIND HAS DETERMINED THE TOTAL INCOME AT RS.49,70 9/-. THE ORDER OF THE ASSESSING OFFICER, TO THAT EXTENT, IN FACT, MERGES WITH THAT BY THE FIRST APPELLATE AUTHORITY, EVEN AS OBSERVED DURING HEARING BY THE LD. COUNSEL FOR THE ASSESSEE, SH. MEHRA, HIMSELF. HOW, THEN, COULD THE AOS ACTION IN DISMIS SING THE ASSESSEES APPLICATION U/S. 154, OR NOT ENTERTAINING IT FAVOURABLY, BE FAU LTED? THE PROPER COURSE FOR THE ASSESSEE IS TO MOVE THE FIRST APPELLATE AUTHORITY U /S. 154 FOR ALLOWANCE OF DEDUCTION U/S. 80P(2)(C)(II) INASMUCH AS THE SAME STANDS PRES SED PER GROUND 9 OF ITS APPEAL BEFORE HIM, WHICH REMAINS UNDISPOSED (VIDE ORDER DA TED 12.03.2014). IN FACT, THE LD. COUNSEL, SH. MEHRA, WOULD ON THIS BEING OBSERVE D BY THE BENCH DURING HEARING, STATE THAT THE ASSESSEE HAD IN FACT MOVED SUCH AN A PPLICATION U/S. 154, WHICH THOUGH REMAINS UNDISPOSED TO DATE DESPITE LAPSE OF CONSIDERABLE TIME. THIS IS UNFORTUNATE. EVEN AS WE DO NOT CONSIDER IT PROPER F OR US TO ISSUE ANY SPECIFIC DIRECTION TO THE FIRST APPELLATE AUTHORITY IN THIS REGARD IN THE CONTEXT OF THE INSTANT PROCEEDINGS, SUFFICE TO SAY THAT WHERE SUCH AN APPL ICATION HAS INDEED BEEN MOVED, THE FIRST APPELLATE AUTHORITY SHALL CONSIDER IT EXP EDITIOUSLY, IN LINE WITH THE ITA NO. 736/ASR/2017 (AY 2000-01) THE KANDOWALI CO-OP (L&C) SOCIETY LTD V. ITO 4 PROVISION OF SECTION 154(8), MANDATING A DISPOSAL O F AN APPLICATION THEREUNDER WITHIN SIX MONTHS. THE ASSESSEES INSTANT PETITION IS, FOR THE STATED REASONS, UNSUSTAINABLE. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 15, 2 019 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 15.01.2019 /GP/SR PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: THE KANDOWALI CO-OP (L&C) SO CIETY LTD., TEHSIL AJNALA, AMRITSAR (2) THE RESPONDENT: INCOME TAX OFFICER, WARD 4( 2), AMRITSAR (3) THE CIT(APPEALS)-2, AMRITSAR (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER