Income Tax Officer, Ward-1, Vijayapura V. M/s. Siddasiri Pattin Souharda sahakari Niyamit, Vijayapura

ITA 748/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0228 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SUKESH PATIL

Judgement Text

ITA.748/BANG/2018 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.748/BANG/2018 (ASSESSMENT YEAR : 2009-10) INCOME-TAX OFFICER, WARD -1, VIJAYAPURA .. APPELLANT V. M/S. SIDDASIRI PATTIN SOUHARDA SAHAKARI NIYAMIT, S. S. TEMPLE CAMPUS, S. S. ROAD, VIJAYAPURA .. RESPONDENT PAN : AAAJS3372F ASSESSEE BY : SHRI. SUKESH PATIL, CA REVENUE BY : MS. KAPILA H, JCIT HEARD ON : 26.03.2019 PRONOUNCED ON : 29.03.2019 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A), BELAGAVI, DT.18.12.2017, FOR THE AS SESSMENT YEAR 2009-10. ITA.748/BANG/2018 PAGE - 2 02. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 03. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. DR T HAT THE CIT (A) HAD NOT CONSIDERED THE BINDING DECISION OF THE HON BLE SUPREME COURT IN THE MATTER OF CITIZEN COOPERATIVE SOCIETY V. ACIT [397 ITR 1], WHEREIN AT PARA 24, IT WAS HELD AS UNDER : 24) UNDOUBTEDLY, IF ONE HAS TO GO BY THE AFORESAID DEFINITION OF CO-OPERATIVE BANK, THE APPELLANT DOES NOT GET COV ERED THEREBY. IT IS ALSO A MATTER OF COMMON KNOWLEDGE THAT IN ORD ER TO DO THE BUSINESS OF A CO-OPERATIVE BANK, IT IS IMPERATIVE T O HAVE A ITA.748/BANG/2018 PAGE - 3 LICENCE FROM THE RESERVE BANK OF INDIA, WHICH THE A PPELLANT DOES NOT POSSESS. NOT ONLY THIS, AS NOTICED ABOVE, THE RESERVE BANK OF INDIA HAS ITSELF CLARIFIED THAT THE BUSINES S OF THE APPELLANT DOES NOT AMOUNT TO THAT OF A CO-OPERATIVE BANK. THE APPELLANT, THEREFORE, WOULD NOT COME WITHIN THE MIS CHIEF OF SUB- SECTION (4) OF SECTION 80P. IT WAS THE CASE OF THE LD. DR THAT THE ASSESSEE IS INVOLVED INTO GIVING FUNDS TO THE NON-MEMBERS. FOR THAT PURPOSES , OUR ATTENTION WAS DRAWN TO ASSESSMENT ORDER WHEREIN THE AO HAD EX AMINED THE STATUS OF THE ASSESSEE AND CAME TO THE CONCLUSION T HAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S.80P(2)(A)(I) BECAUSE THE PRINCIPLE OF MUTUALITY IS NOT FOLLOWED. 04. PER CONTRA, THE LD. AR RELIES ON THE DECISION O F THE TRIBUNAL IN THE MATTER OF M/S. UDAYA SOUHARDA CREDIT CO OPER ATIVE SOCIETY LTD [ITA NO.2831/BANG/2017, DT.17.08.2018. THE LD. AR SUBMITTED THAT THE ASSESSEE IS NOT INTO BANKING BUS INESS AND THEREFORE NO LICENCE IS REQUIRED FROM THE RBI. FUR THER IT WAS SUBMITTED THAT THE ASSESSEE IS REGISTERED UNDER THE KARNATAKA COOPERATIVE SOCIETIES ACT, 1959, AND THEREFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80P(2)(A)(I) OF THE ACT. 05. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE REPRODUCED HEREINABOVE, PARA 24 OF THE ORDER OF THE HONBLE SUPREME COURT IN THE MATTER OF CITIZ EN COOPERATIVE SOCIETY (SUPRA), WHICH IS RELEVANT HERE. IN A RECE NT ORDER IN THE MATTER OF M/S. UDAYA SOUHARDA CREDIT CO OPERATIVE S OCIETY LTD [ITA NO.2831/BANG/2017, DT.17.08.2018], IT WAS NOTE D BY THE TRIBUNAL THAT KARNATAKA STATE HAS NOTIFIED KARNATAK A CO ITA.748/BANG/2018 PAGE - 4 OPERATIVE SOCIETIES ACT, 1959 AS WELL AS THE KARNAT AKA SOUHARDA SAHAKARI ACT, 1997 AND BOTH ACTS ARE IN FORCE. THE REFORE, CONVERSION FROM ONE INTO ANOTHER IS POSSIBLE. THER EAFTER THE TRIBUNAL HELD THAT THE DEDUCTION U/S.80P CAN ONLY B E APPLIED TO A COOPERATIVE SOCIETY REGISTERED UNDER THE KARNATAKA CO- OPERATIVE SOCIETIES ACT, 1959 AND THEREAFTER THE MATTER WAS R ESTORED BACK TO THE AO FOR FRESH DECISION AFTER MAKING NECESSARY EN QUIRY AND INVESTIGATION. IN THE PRESENT CASE, THE FACTS ARE IDENTICAL AND ONE MORE PLEA WAS RAISED PERTAINING TO MUTUALITY. 06. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING TH E DECISION OF THE HONBLE SUPREME COURT IN CITIZEN COOPERATIVE SO CIETY (SUPRA) AND UDAYA SOUHARDA COOPERATIVE SOCIETY (SUPRA), WE REMAND THE APPEAL TO THE FILE OF THE CIT (A) TO DECIDE THE ISS UE AFRESH IN THE LIGHT OF THE OBSERVATIONS MADE HEREINABOVE. NEEDLE SS TO SAY THE CIT (A) SHALL GIVE OPPORTUNITY OF HEARING TO THE AS SESSEE AND SHALL ALSO CONSIDER THE SUBMISSIONS, IF ANY MADE BY THE A SSESSEE IN THIS REGARD AND ALSO SEEK A REMAND REPORT FROM THE AO, A ND THEREAFTER DECIDE THE MATTER IN ACCORDANCE WITH LAW. 07. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF MARCH, 2019. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : 29.03.2019 MCN* ITA.748/BANG/2018 PAGE - 5 COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE.