M/s Bishnupur Rowtara PAC Credit Society Ltd., Nadia V. Pr.CIT-14, Kolkata

ITA 811/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2794 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 16-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANDEEP LAKRA
• Assessee Lawyers: P S GUPTA; K M ROY
• Keywords: Opportunity of being heard; Period of limitation; Set aside
• Section: 143(3); 80P; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA B BENCH, KOLKATA (BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER) I.T.A. NO. 811/KOL/2019 ASSESSMENT YEAR: 2014-15 M/S. BISHNUPUR ROWTARA PAC CREDIT SOCIETY LTD...................................... APPELLANT [PAN : AACAB 3042 Q] VS. PR. COMMISSIONER OF INCOME TAX-14, KOLKATA..................................................................... RESPONDENT APPEARANCES BY: SHRI K.M. ROY, FCA & SHRI P.S. GUPTA, ADV., APPEARED ON BEHALF OF THE ASSESSEE. SHRI SANDEEP LAKRA, JCIT, APPEARED ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : AUGUST 21 ST , 2019 DATE OF PRONOUNCING THE ORDER : AUGUST 30 TH , 2019 ORDER PER J. SUDHAKAR REDDY, AM :- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX-14, KOLKATA, DATED 25.03.2019. 2. THE ASSESSEE IS A COOPERATIVE SOCIETY AND IS ENGAGED IN THE ACTIVITY OF PROVIDING CREDIT FACILITY TO ITS MEMBERS AND MARKETING OF AGRICULTURAL IMPLEMENTS, SEEDS AND OTHER ARTICLES INTENDED FOR AGRICULTURE, FOR THE PURPOSE OF SUPPLYING THEM TO THE MEMBERS. THIS COOPERATIVE SOCIETY COLLECTS DEPOSITS FROM ITS MEMBERS AND DEPOSITS THE SAME IN ITS BANK ACCOUNTS. FOR THE ASSESSMENT YEAR 2014-15, IT FILED RETURN OF INCOME ON 19.03.2015 DECLARING NIL INCOME AFTER CLAIMING DEDUCTION U/S 80P OF THE ACT. THE ASSESSING OFFICER COMPLETED ASSESSMENT U/S 143(3) OF THE ACT ON 19.12.2016 ACCEPTING NIL ASSESSMENT. 3. THE PR.CIT-14, KOLKATA ISSUED A NOTICE U/S 263 OF THE ACT ON 28.09.2018 PROPOSING REVISION OF THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT ON 19.12.2016. THE LD. PR.CIT WAS OF THE VIEW THAT AS PER THE PROVISION OF SECTION 80P(2)(D) OF THE ACT, ONLY INTEREST INCOME DERIVE BY THE COOPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER COOPERATIVE SOCIETY ONLY IS ALLOWED AS DEDUCTION AND THAT INTEREST INCOME OF RS. 55,23,340/- RECEIVED FROM (A) UCO BANK (B) UNION BANK (C) AXIS BANK (D) IDBI BANK IS 2 I.T.A. NO. 811/KOL/2019 ASSESSMENT YEAR: 2014-15 M/S. BISHNUPUR ROWTARA PAC CREDIT SOCIETY LTD NOT ELIGIBLE FOR DEDUCTION U/S 80P(2)(D) OF THE ACT AS THIS INTEREST INCOME WAS NOT DERIVED FROM ANY INVESTMENT MADE IN A COOPERATIVE SOCIETY. HE WAS ALSO OF THE OPINION THAT THE INCOME OF THE ASSESSEE FROM AMBULANCE FARE AND INTEREST ON SALARY LOAN, ARE NOT ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. AS THE AO HAD NOT CONSIDERED THESE ASPECTS IN HIS ASSESSMENT ORDER THE LD. PR.CIT WAS OF THE OPINION THAT THE ASSESSMENT ORDER PASSED BY THE AO ON 19.12.2016 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 4. FURTHER, ON 06.08.2019 ONE MORE SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE. THIS READS AS FOLLOWS: 2. HOWEVER, IT WAS NOT SPECIFICALLY STATED THAT THE INTEREST FROM BANKS WAS NOT ALLOWABLE AS PER LAW ALSO AS THESE CONSTITUTE INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES'. ALSO THESE INCOMES WERE NOT ALSO ELIGIBLE FOR DEDUCTION U/S 80P. THE A.O. HAS, HOWEVER, ALLOWED THE DEDUCTION U/S 80P OF THE I.T. ACT, 1961 IN RESPECT OF THE ABOVE INCOMES WHICH IS AGAINST THE PROVISION OF THE ACT LEADING TO UNDER ASSESSMENT OF INCOME. THIS HAS RENDERED THE ASSESSMENT ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE WITHIN THE MEANING OF SEC.263 OF THE I.T. ACT, 1961. 5. THEREAFTER THE LD. PR.CIT PASSED AN ORDER U/S 263 OF THE ACT DATED 25.03.2019 HOLDING THAT, THE ORDER PASSED BY THE AO U/S 143(3) OF THE ACT IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE SET ASIDE THIS ISSUE OF DEDUCTION U/S 80P OF THE ACT TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 6. AGGRIEVED, THE ASSESSEE IS BEFORE US ON THE FOLLOWING GROUNDS: 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER U/S. 263 OF THE I.T. ACT, PASSED BY THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX-14, KOLKATA WAS NOT FAIR AND PROPER AND ON THE OTHER HAND IT WAS MADE CONTRARY TO LAW, SOUND AND ADEQUATE PRINCIPLES. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. PRINCIPAL C.I.T. WAS NOT AT ALL JUSTIFIED IN SETTING ASIDE THE ASSESSMENT ORDER PASSED BY THE LD. A.O. U/S. 143(3) OF THE I.T. ACT, 1961 FOR THE A.Y. 2014-15 FOR DECIDING THE SPECIFIC ISSUE AFRESH, THOUGH THE ISSUE WAS THOROUGHLY EXAMINED BY THE LD. A.O. AT THE TIME OF ASSESSMENT OF THE CASE. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. PRINCIPAL C.I.T. HAS NO JURISDICTION TO SET ASIDE THE ISSUE TO THE FILE OF THE LD. A.O. ON THE PLEA THAT THE ORDER IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, BECAUSE THE LD. A.O. HAS ALREADY DEALT WITH ALL THE ISSUES IN HIS ORDER AFTER MAKING PROPER INQUIRY AND EXAMINATION OF BOOKS OF ACCOUNT OF THE APPELLANT AT THE ASSESSMENT STAGE; 4. FOR THAT HAVING REGARDS TO THE FACTS OF THE CASE THE ORDER PASSED U/S. 263 OF THE I.T. ACT BY THE LD. PRINCIPAL C.I.T. IS BARRED BY LIMITATION BECAUSE THE ORDER WAS DELIVERED AND BOOKED TO THE AGENT I.E. G.P.O., KOLKATA ON 01.04.2019 AND NOT WITHIN THE PERIOD OF LIMITATION ON 31.03.2019 AS REVEALED FROM THE TRACK RECORD OF THE KOLKATA G.P.O. 3 I.T.A. NO. 811/KOL/2019 ASSESSMENT YEAR: 2014-15 M/S. BISHNUPUR ROWTARA PAC CREDIT SOCIETY LTD 5. FOR THAT ON THE FACTS THE LD. PRINCIPAL C.I.T. SHOULD HAVE CONSIDERED THE REJOINDERS SUBMITTED BY THE APPELLANT AT THE TIME OF HEARING OF THE CASE U/S 263 OF THE I.T. ACT. 6. FOR THAT THE LD. PRINCIPAL C.I.T. ERRED BOTH IN POINTS OF LAW AND ON FACTS. 7. FOR THAT THE HUMBLE APPELLANT CRAVES LEAVE TO TAKE ADDITIONAL GROUNDS AND AMEND GROUNDS AT THE TIME OF HEARING. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT, THE ORDER PASSED BY THE PR.CIT- 14, KOLKATA U/S 263 OF THE ACT WAS BARRED BY LIMITATION, AS THE ORDER IS DATED 25.03.2019 AND WHEREAS IT WAS DELIVERED AND BOOKED WITH GENERAL POST OFFICE, KOLKATA ON 01.04.2019 WHICH IS BEYOND THE PERIOD OF LIMITATION OF 31.03.2019. HE RELIED ON CERTAIN CASE LAW ON THIS ISSUE. 8. THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR) ON THE OTHER HAND FILED COPY OF ACKNOWLEDGEMENT GIVEN BY THE POSTAL DEPARTMENT WHICH DISCLOSES THAT THE ORDER IN QUESTION WAS HANDED OVER TO THEM ON 29.03.2019 AND SUBMITTED THAT THE ORDER IN QUESTION WAS OUT OF THE CONTROL OF THE AUTHORITY BEFORE 31.03.2019 AND HENCE WITHIN THE PERIOD OF LIMITATION. 9. AFTER HEARING RIVAL CONTENTIONS WE AGREE WITH THE SUBMISSION OF LD. DR, THAT THE ORDER IN QUESTION WAS DELIVERED TO THE POST OFFICE ON 29.03.2019 AND HENCE WAS OUT OF THE CONTROL OF THE AUTHORITY BEFORE THE EXPIRY OF THE DATE OF LIMITATION I.E. 31.03.2019. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. BINANI INDUSTRIES LTD. [2015] 372 ITR 414 (CALCUTTA) CONSIDERED A CASE WHERE THE AO PASSED THE ASSESSMENT ORDER ON 31.03.2005 AND THIS WAS RECEIVED BY THE ASSESSEE ON 13.04.2005. THE HONBLE HIGH COURT HELD THAT THE CLAIM THAT THE ORDER WAS BARRED BY LIMITATION IS NOT CORRECT. IT HELD IN FAVOUR OF THE REVENUE. SIMILARLY, THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SUBRATA ROY [2014] 45 TAXMANN.COM 513 (CALCUTTA) HELD THAT THE DELAY OF 47 DAYS CANNOT LEAD TO A PRESUMPTION THAT THE ORDER IN QUESTION IS BARRED BY LIMITATION. WE RELY ON THE ABOVE CASE LAW AND THE FACT THAT THE ORDER WAS SENT TO THE G.P.O. ON 29.03.2019 AND DISMISS THIS GROUND NO. 4 OF THE ASSESSEE. 10. BOTH THE PARTIES HAVE ARGUED ON MERITS. AFTER CONSIDERING RIVAL CONTENTIONS WE FIND THAT THE AO HAS COMPLETED THE ASSESSMENT BY HOLDING AS FOLLOWS: PARA .2 SHRI ATISH PALIT, ADVOCATE APPEARED ON 27.06.2016 IN RESPONSE AND FILED VAKALATNAMA' DULY AUTHORISED BY THE CO-OPERATIVE SOCIETY TO REPRESENT THE CASE. HE WAS ASKED TO PRODUCE ALL RELEVANT DOCUMENTS AND BOOKS OF ACCOUNTS IN SUPPORT OF RETURN OF INCOME FOR A.Y. 2014-15 OF THE CO-OPERATIVE SOCIETY. HE APPEARED TIME 4 I.T.A. NO. 811/KOL/2019 ASSESSMENT YEAR: 2014-15 M/S. BISHNUPUR ROWTARA PAC CREDIT SOCIETY LTD TO TIME AND PRODUCED ALL DOCUMENTS AND BOOKS OF ACCOUNTS WHICH WERE PERUSED AND PLACED ON RECORDS. THE CASE WAS HEARD, DISCUSSED AND CONFRONTED WITH. PARA .3 ON INVESTIGATION OF ALL DETAILS, DOCUMENTS, BOOKS OF ACCOUNTS AND RETURN OF INCOME, THE ASSESSMENT PROCEEDINGS ARE COMPLETED ACCEPTING RETURNED TOTAL INCOME AS THE ASSESSED TOTAL INCOME. 11. BEFORE US THE ASSESSEE COULD NOT DEMONSTRATE THAT THE AO HAD CALLED FOR ANY INFORMATION ON THE CLAIM OF DEDUCTION U/S 80P OF THE ACT. THERE WAS NO QUERY MADE BY THE AO. THIS ISSUE WAS NOT EXAMINED. HENCE THE ASSESSMENT ORDER HAS BEEN PASSED WITH TOTAL NON-APPLICATION OF MIND AND WITHOUT MAKING ENQUIRIES THAT WERE REQUIRED TO BE MADE. EXPLANATION TO SECTION 263 OF THE ACT READS AS FOLLOWS: FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OTHER PERSON. APPLYING THE LAW TO THE FACTS OF THE CASE, WE HAVE TO HOLD THAT THE ORDER OF THE AO IS DEEMED TO BE ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE REASON THAT, THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATIONS WHICH HAVE TO BE MADE AND AS THE ORDER IS PASSED ALLOWING RELIEF, WITHOUT INQUIRING INTO THE CLAIM. THUS, WE UPHOLD THE ORDER OF THE LD. PR.CIT-14, KOLKATA PASSED U/S 263 OF THE ACT DATED 25.03.2019. 12. NEVERTHELESS, WE FIND THAT THE LD. PR.CIT, WHILE SETTING ASIDE THE ISSUE TO THE FILE OF THE AO, HAS GIVEN CERTAIN DIRECTIONS. WE VACATE THESE DIRECTIONS AND MAKE REMAND AN OPEN REMAND. THE AO SHALL APPLY THE LAW, AS LAID DOWN BY THE COURTS AND TRIBUNALS ON THE ISSUE AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE UNINFLUENCED BY THE OBSERVATION OF THE LD. PR.CIT ON THIS ISSUE. HE SHALL SPECIFICALLY TAKE INTO CONSIDERATION AND APPLY THE PROPOSITION OF LAW LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SOUTH EASTERN RAILWAY EMPLOYEES CO-OP CREDIT SOCIETY LTD. [2017] 390 ITR 524 5 I.T.A. NO. 811/KOL/2019 ASSESSMENT YEAR: 2014-15 M/S. BISHNUPUR ROWTARA PAC CREDIT SOCIETY LTD (CALCUTTA) AND OTHER JUDGMENTS OF THE HIGH COURTS AND SUPREME COURT ON THIS ISSUE. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. KOLKATA, THE 30 TH AUGUST, 2019. SD/- SD/- [S.S. VISWANETHRA RAVI] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30.08.2019 BIDHAN COPY OF THE ORDER FORWARDED TO: 1. M/S. BISHNUPUR ROWTARA PAC CREDIT SOCIETY LTD., C/O. PARTHA SARATHI GUPTA, ADVOCATE, 100, BANK LANE, HATAR PARA, P.O.-KRISHNAGAR, DIST.-NADIA, PIN-741 101. 2. PR. CIT-14, 2 ND FLOOR, 3, GOVT. PLACE (WEST), KOLKATA-700 001. 3. CIT(A)- , KOLKATA. 4. CIT- 5. CIT(DR), KOLKATA BENCHES, KOLKATA. (SENT THROUGH MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES