HIMACHAL MITRA MANDAL CO OP CREDIT SOCIETY LTD, MUMBAI V. CIT 22, MUMBAI

ITA 7394/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75773 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 13-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAIK
• Assessee Lawyers: VIJAY MEHTA ANUJ KISNADWALA
• Keywords: Assessment record
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI . . , . . , BEFORE SHRI B R MITTAL, JM & SHRI B R BASKARAN , AM ./I.T.A. NO.7394/MUM/2012 ( ' ' ' ' ' '' ' / ASSESSMENT YEAR : 2009-10) HIMACHAL MITRA MANDAL COOP CREDIT SOC LTD SHOP NO. 1-2 SURVEY NO. 320 ROAD NO. 5 PESTOM SAGAR CHEMBUR MUMBAI 400 034 / VS. THE COMMR OF INCOME TAX OFFICER 22, MUMBAI ./PAN : AAAAH0613D ( % /APPELLANT ) ( &'% / RESPONDENT ) % ( / APPELLANT BY : SHRI VIJAY MEHTA/ ANUJ KISNADWALA &'% ( / RESPONDENT BY : SHRI K C P PATNAIK ( + /DATE OF HEARING : 24.02.2014 ( + / DATE OF PRONOUNCEMENT 26 TH , FEB 2014 / O R D E R PER B R BASKARAN, AM : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE REVISION ORDER DATED 29.10.2012 PASSED BY LD CIT U/S 263 OF THE ACT FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSEE IS CHALLENGING THE VALIDITY OF THE REV ISION ORDER. 2. THE FACTS RELATING TO THE SAME ARE DISCUSSED IN BRIEF. THE ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERAT ION WAS COMPLETED BY THE AO U/S 143(3) OF THE ACT ON 31.10.2011. ON EXAMINATION OF ASSESSMENT RECORD, THE LD CIT NOTICED THAT THE AO HAS GRANTED DEDUCTION U/S 80P O F THE ACT TO THE ASSESSEE WITHOUT HIMACHAL MITRA MANDAL COOP CREDIT SOC LTD 2 CONSIDERING THE AMENDED PROVISIONS OF SEC. 80P(4) O F THE ACT. ACCORDINGLY, THE LD CIT CAME TO THE CONCLUSION THAT THE IMPUGNED ASS ESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND HEN CE HE INITIATED REVISION PROCEEDINGS U/S 263 OF THE ACT. 3. THE ASSESSEE CONTENDED BEFORE THE LD CIT THA T THE PROVISIONS OF SEC. 80P(4) ARE NOT APPLICABLE TO IT, SINCE IT IS ONLY A CREDIT CO- OPERATIVE SOCIETY AND NOT A CO-OPERATIVE BANK. IN THIS REGARD, IT PLACED RELIANCE ON THE FO LLOWING CASE LAW:- (A) ITO VS. JANKALYAN NAGRI SAHAKARI PAT SANSTHA LTD ( 2012)(24 TAXMANN.COM 127 (PUNE) (B) M/S YESHWANTPUR CREDIT CO-OPERATIVE SOCIETY LTD VS . ITO (ITA NO.737/BANG/2011 DATED 11.4.2012) HOWEVER, THE LD CIT WAS NOT SATISFIED WITH THE CONT ENTIONS OF THE ASSESSEE AND ACCORDINGLY TOOK THE VIEW THAT THE ASSESSMENT ORDER HAS BEEN RENDERED ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE, SI NCE THE AO HAS FAILED TO EXAMINE THE APPLICABILITY OF SEC. 80P(4) OF THE ACT TO THE ASSE SSEE. ACCORDINGLY, THE LD CIT DIRECTED THE AO TO EXAMINE THE ISSUE OF DEDUCTION U /S 80P OF THE ACT. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3. THE LD COUNSEL FOR THE ASSESSEE INVITED OUR A TTENTION TO PARA 2.3 OF THE ASSESSMENT ORDER AND SUBMITTED THAT THE AO HAS TAKE N A CONSCIOUS VIEW THAT THE ASSESSEE HEREIN IS A CO-OPERATIVE CREDIT SOCIETY AN D NOT A CO-OPERATIVE BANK. HE FURTHER SUBMITTED THAT THE PROVISIONS OF SEC. 80P(4 ) SHALL APPLY ONLY TO A CO-OPERATIVE BANK AND NOT A CO-OPERATIVE CREDIT SOCIETY. SINCE THE AO HAD TAKEN THE VIEW THAT THE HIMACHAL MITRA MANDAL COOP CREDIT SOC LTD 3 ASSESSEE HEREIN IS NOT A CO-OPERATIVE BANK, THE QUE STION OF APPLICATION OF SEC. 80P(4) DID NOT ARISE BEFORE HIM. HE FURTHER SUBMIT TED THAT THE AO HAS TAKEN A POSSIBLE VIEW AND FURTHER HIS VIEW IS SUPPORTED BY THE DECISIONS RENDERED BY THE TRIBUNAL, ON WHICH RELIANCE WAS PLACED BY THE ASSES SEE BEFORE LD CIT. ACCORDINGLY THE LD A.R SUBMITTED THAT THE IMPUGNED REVISION PRO CEEDINGS IS LIABLE TO BE SET ASIDE, SINCE THE AO HAS TAKEN A POSSIBLE VIEW. 4. ON THE CONTRARY, THE LD D.R SUBMITTED THAT T HE AO HAS EXAMINED THE APPLICABILITY OF PROVISIONS OF SEC. 80P(2) OF THE A CT TO THE INTEREST INCOME EARNED BY THE ASSESSEE. HE SUBMITTED THAT THE AO DID NOT EXA MINE THE APPLICABILITY OF PROVISIONS OF SEC. 80P(4) OF THE ACT TO THE FACTS O F THE ASSESSEES CASE. ACCORDINGLY HE SUBMITTED THAT THE LD CIT WAS JUSTIFIED IN PASSI NG THE IMPUGNED REVISION ORDER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE RECORD. THE CONTROVERSY REVOLVES AROUND SEC. 80P(4) OF THE ACT, WHICH READS AS UNDER:- 80P(4) THE PROVISIONS OF THIS SECTION SHALL NOT A PPLY IN RELATION TO ANY CO- OPERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CRED IT SOCIETY OR A PRIMARY CO- OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK A PLAIN READING OF THE ABOVE CITED PROVISION WOULD SHOW THAT THE DEDUCTION U/S 80P IS NOT AVAILABLE TO A CO-OPERATIVE BANK. WE NOTICE TH AT THE LD CIT HAS TAKEN THE VIEW THAT THE ASSESSEE MAY BE HIT BY THE PROVISIONS OF S EC. 80P(4) AND ACCORDING TO LD CIT, THE AO HAS FAILED TO EXAMINE ABOUT ITS APPLICABILIT Y TO THE ASSESSEE HEREIN. HIMACHAL MITRA MANDAL COOP CREDIT SOC LTD 4 6. BEFORE GOING INTO THE MERITS OF THE ISSUE, WE WOULD LIKE TO DISCUSS ABOUT THE LEGAL POSITION WITH REGARD TO THE POWER OF LEARNED CIT TO INVOKE REVISION PROCEEDINGS UNDER SECTION 263 OF THE ACT. THE SCOPE OF REVISIO N PROCEEDINGS INITIATED UNDER SECTION 263 OF THE ACT WAS CONSIDERED BY JURISDICTI ONAL HON'BLE BOMBAY HIGH COURT, IN THE CASE OF GRASIM INDUSTRIES LTD. V CIT (321 ITR 9 2) BY TAKING INTO ACCOUNT THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT. THE RELEVA NT OBSERVATIONS ARE EXTRACTED BELOW: SECTION 263 OF THE INCOME-TAX ACT, 1961 EMPOWERS T HE COMMISSIONER TO CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDINGS UNDER THE ACT AND, IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN, BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE, TO PASS AN ORDER UPON HEARING THE ASSESSEE AND AFTER A N ENQUIRY AS IS NECESSARY, ENHANCING OR MODIFYING THE ASSESSMENT OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. THE KE Y WORDS THAT ARE USED BY SECTION 263 ARE THAT THE ORDER MUST BE CONSIDERE D BY THE COMMISSIONER TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THIS PROVISION HAS BEEN INTERPRETED BY TH E SUPREME COURT IN SEVERAL JUDGMENTS TO WHICH IT IS NOW NECESSARY TO TURN. IN MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 243 ITR 83, THE SUPREME COURT HELD THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFIC ER AND IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTR ACTED. THE SUPREME COURT HELD THAT AN INCORRECT ASSUMPTION OF FACT OR AN INCORRECT APPLICATION OF LAW, WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. AN ORDER PASSED IN VIOLATION OF THE PRINCIPLES OF NATU RAL JUSTICE OR WITHOUT APPLICATION OF MIND, WOULD BE AN ORDER FALLING IN T HAT CATEGORY. THE EXPRESSION PREJUDICIAL TO THE INTERESTS OF THE REV ENUE, THE SUPREME COURT HELD, IT IS OF WIDE IMPORT AND IS NOT CONFINE D TO A LOSS OF TAX. WHAT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE IS EXPLA INED IN THE JUDGMENT OF THE SUPREME COURT (HEAD NOTE): THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE RE VENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONS EQUENCE OF AN ORDER OF THE ASSESSING OFFICER, CANNOT BE TREATED A S PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN L AW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS AR E POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHI CH THE HIMACHAL MITRA MANDAL COOP CREDIT SOC LTD 5 COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED A S AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUST AINABLE IN LAW. THE PRINCIPLE WHICH HAS BEEN LAID DOWN IN MALABAR I NDUSTRIAL CO. LTD. [2000] 243 ITR 83 (SC) HAS BEEN FOLLOWED AND EXPLAI NED IN A SUBSEQUENT JUDGMENT OF THE SUPREME COURT IN CIT V. MAX INDIA L TD. [2007] 295 ITR 282. 7. WE SHALL EXAMINE THE FACTS PREVAILING IN THE INSTANT CASE IN TERMS OF THE LEGAL POSITION DISCUSSED IN THE PRECEDING PARAGRAPH. AS POINTED OUT BY THE LD A.R, THE ASSESSING OFFICER HAS GIVEN A CATEGORICAL FINDING T HAT THE ASSESSEE HEREIN IS NOT A CO- OPERATIVE BANK. THE RELEVANT PORTION OF THE ASSESS MENT ORDER READS AS UNDER:- 2.3 HOWEVER, THE FIRST THREE JUDGMENTS ARE RELATE D TO CO-OPERATIVE BANKS AND FOURTH IS RELATED TO SECTION 80P(2)(C) WHICH ARE NO T APPLICABLE IN THIS CASE AS THE ASSESSEE IS A CO-OPERATIVE CREDIT SOCIETY AND N OT A CO-OPERATIVE BANK. THUS, WE NOTICE THAT THE ASSESSING OFFICER HAS TAKE N A CONSCIOUS VIEW THAT THE ASSESSEE HEREIN IS NOT A CO-OPERATIVE BANK. AS SUB MITTED BY LD A.R, THE QUESTION OF APPLICATION OF THE PROVISIONS OF SEC. 80P(4) SHALL ARISE, ONLY IF THE ASSESSEE HEREIN IS CONSIDERED AS A CO-OPERATIVE BANK. THE ASSESSEE HA S ALSO POINTED OUT BEFORE THE LD CIT THAT THE VIEW ENTERTAINED BY THE ASSESSING OFFI CER IS ONE OF THE POSSIBLE VIEWS BY DRAWING SUPPORT FROM THE TRIBUNAL DECISIONS IN THE CASE OF JANKALYAN NAGRI SAHAKARI PAT SANSTHA LTD (SUPRA) AND IN THE CASE OF M/S YESH WANTPUR CREDIT CO-OPERATIVE SOCIETY LTD (SUPRA). THUS, WE NOTICE THAT THE ASSE SSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS ON THE ISSUE RELATING TO THE APPLICA BILITY OF SEC. 80P(4) BY HOLDING THAT THE ASSESSEE IS NOT A CO-OPERATIVE BANK. THE HONB LE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD (SUPRA) HAS CATEGORICALL Y HELD THAT, WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE V IEW WITH WHICH THE COMMISSIONER HIMACHAL MITRA MANDAL COOP CREDIT SOC LTD 6 DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOU S ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY T HE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. IT IS NOT THE CASE OF THE RE VENUE THAT THE VIEW ENTERTAINED BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. 8. IN VIEW OF THE FOREGOING DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED REVISION ORDER PASSED BY LD CIT DOES NOT F ALL WITHIN THE MANDATE OF THE PROVISIONS OF SEC. 263 OF THE ACT. ACCORDINGLY WE SET ASIDE HIS ORDER. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS ALLOWED. / '/ ( ( ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEB 2014 . ( 26 FEB 2014 ( SD/- SD/- ( B R MITTAL ) ( B R BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; : DATED 26 TH , FEB 2014 .../ RAJ , SR. PS ( &= >= ( &= >= ( &= >= ( &= >=/ COPY OF THE ORDER FORWARDED TO : 1. % / THE APPELLANT 2. &'% / THE RESPONDENT. 3. ?() / THE CIT(A)- 4. ? / CIT 5. = &, , / DR, ITAT, MUMBAI 6. ' / GUARD FILE. / BY ORDER, '= & //TRUE COPY// / // / ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI