M/s Divya Jyothi Credit Co-operative Socety Limited , Bangalore V. Income TAx Officer Ward-7(2)(1), Bangalore

ITA 799/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5891 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 15-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABDUL HAKEEM M
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 799 / BANG/201 8 ASSESSMENT YEAR : 20 1 4 - 15 M/S. DIVYA JYOTHI CREDIT CO- OPERATIVE SOCIETY LTD., 39, 8 TH F MAIN, JAYANAGAR 3 RD BLOCK, BANGALORE 560 011. PAN: AAAAD2194B VS. THE INCOME TAX OFFICER, WARD 7 (2) (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI ABDUL HAKEEM .M, JCIT (DR) DATE OF HEARING : 23 . 0 4 .2018 DATE OF PRONOUNCEMENT : 04 . 0 5 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THISAPPEAL IS FILED BY THE ASSESSEE WHICH IS DIRECT ED AGAINST THE ORDER OF LD. CIT (A)-7, BANGALORE DATED 12.01.2018 FOR ASSES SMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. THE LEARNED ASSESSING OFFICER AND THE CIT (A) -7 WA S NOT JUSTIFIED IN DISALLOWING THE DEDUCTION U/S.80P ON THE GROUND THA T THE APPELLANT IS A CO-OPERATIVE BANK ON THE WRONG INTERPRETATION OF THE PROVISION OF THE SECTION 80P (4) AND 80P (2)(A)(I) OF THE ACT AN D ON THE ASSUMPTIONS INTER ALIA THAT: 1. NOTHING IN THE BYE LAWS OF THE CO-OPERATIVE SOCI ETY THAT PREVENTS THE SOCIETYFROM ACCEPTING DEPOSIT FROM PUBLIC. 2. THE MEMBERSHIP OF THE CO-OPERATIVE SOCIETY IS OP EN AND NOT RESTRICTED BY ANY CLASSIFICATION OR COVENANT. 3. THE NOMINAL MEMBERS DO NOT CARRY ANY RIGHT IN TH E SOCIETY VIS--VIS PERMANENT MEMBERS WHO ALONE HAVE THE POWER TO PARTI CIPATE IN ELECTION AND VOTING. AND ITA NO.799/BANG/2018 PAGE 2 OF 3 4. THE INTEREST INCOME EARNED BY THE SOCIETY IS ON DEPOSIT OF IDLE AND SURPLUS FUNDS. THE APPELLANT IS REGISTERED UNDER KARNATAKA CO-OPER ATIVE SOCIETY ACT 1959 AND THE PROVISIONS OF THE KARNATAKA SOUHARDA S AHAKARI ACT, 1997 IS NOT APPLICABLE. 3. THIS APPEAL WAS FIRST FIXED FOR HEARING ON 09.04 .2018. ON THIS DATE, NONE APPEARED ON BEHALF OF THE ASSESSEE AND IN THE INTER EST OF NATURAL JUSTICE, HEARING WAS ADJOURNED TO 23.04.2018 AND THE NOTICE OF HEARING WAS SENT TO ASSESSEE BY RPAD WHICH HAS BEEN DULY SERVED ON ASSE SSEE AS PER ACKNOWLEDGEMENT AVAILABLE ON RECORD. IN SPITE OF T HIS, NONE APPEARED ON BEHALF OF THE ASSESSEE ON THIS DATE ALSO I.E. 23.04 .2018 AND THERE IS NO REQUEST FOR ADJOURNMENT AND THEREFORE, THE APPEAL OF THE AS SESSEE WAS HEARD EX-PARTE QUA THE ASSESSEE. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE SUBMISSIONS OF LD. DR OF R EVENUE AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. I FIND THAT CIT (A) H AS DECIDED THE ISSUE AGAINST THE ASSESSEE BY FOLLOWING THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGA RS CO-OPERATIVE SALE SOCIETY AS REPORTED IN395 ITR 611 (KARN) BUT THERE IS NO DISCUSSION ABOUT THE FACTS OF THE PRESENT CASE AS TO WHETHER THE SAME AR E IN LINE WITH FACTS IN THIS CASE I.E. PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIV E SALE SOCIETY. THERE IS ANOTHER JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT R ENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. V S. ITO AS REPORTED IN 230 TAXMAN 309 AND BOTH THESE JUDGEMENTS ARE IN SAM E LINE BUT THE ULTIMATE CONCLUSION IS DIFFERENT BECAUSE THE FACTS ARE DIFFE RENT. IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUP RA), THE ISSUE IS DECIDED AGAINST THE ASSESSEE FOR THIS REASON THAT THE AMOUN T DEPOSITED IN BANK WAS LIABILITY OF THE ASSESSEE WHEREAS IN THE CASE OF TU MKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA), THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BECAUSE IN THAT CASE, THE MONEY DEPOSITED IN BANK WAS ASSESSEES OWN FUND AND NOT OUT OF LIABILITY OF THE ASSESSEE. SINCE THESE FACTS ARE NOT AVAILABLE ON RECORD, I FEEL IT FIT AND PROPER TO RE STORE THE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER EXAMINING THE FACTS OF THE PRESENT CASE IN THE ITA NO.799/BANG/2018 PAGE 3 OF 3 LIGHT OF THESE TWO JUDGEMENTS OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY(SUPRA) AND TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. V S. ITO(SUPRA). IF THE FACTS OF THE PRESENT CASE ARE IN LINE WITH THE FACT S OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA) THEN THE ISSUE MAY BE DECIDED AGAINST THE ASSESSEE AND IF THE FACTS OF THE PRESEN T CASE ARE IN LINE WITH THE FACTS IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CRED IT COOPERATIVE LTD. VS. ITO (SUPRA) THEN THE ISSUE MAY BE DECIDED IN FAVOUR OF THE ASSESSEE. THE CIT(A) SHOULD PASS NECESSARY ORDER AS PER LAW IN TH E LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 04 TH MAY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.