Income Tax Officer Ward-2 , Vijayapur V. Shri Shri Revanasiddeshwar Co-operative Credit Society Ltd , Vijayapur

ITA 819/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7312 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 11-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B, BANGALORE BEFORE SHRI GEORGE GEORGE K, JM & SHRI JASON P.BOAZ , AM ITA NO.817/BANG/2017 : ASST.YEAR 2011-2012 ITA NO.818/BANG/2017 : ASST.YEAR 2012-2013 ITA NO.819/BANG/2017 : ASST.YEAR 2013-2014 THE INCOME TAX OFFICER WARD 2 VIJAYAPUR. SHRI SHRI REVANASIDDESHWAR CO-OP. CREDIT SOCIETY LIMITED POST : HORTI, TAL.INDI, DIST : VIJAYAPUR PAN : AABAS3319N. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SMT.PADMAMEENAKSHI, JCIT RESPONDENT BY : --- NONE --- DATE OF HEARING : 23.10.2017 DATE OF PRONOUNCEMENT : 03.11.2017 O R D E R PER GEORGE GEORGE K, JM THESE APPEALS AT THE INSTANCE OF REVENUE ARE DIREC TED AGAINST THREE SEPARATE ORDERS OF THE CIT(A), ALL DA TED 30.01.2017. THE RELEVANT ASSESSMENT YEARS ARE 2011- 2012, 2012-2013 AND 2013-2014. 2. SINCE COMMON ISSUE IS RAISED IN THESE APPEALS, T HEY ARE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO NSOLIDATE ORDER. IDENTICAL GROUNDS ARE RAISED IN THESE APPEAL S AND THEY READ AS FOLLOWS:- 1. THE LD.CIT(A) FAILED TO APPRECIATE THAT AS PER THE PROVISIONS OF SECTION 80P(2)(D) IN THE CASE OF CO-O PERATIVE SOCIETY THE INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED ITA NOS.817, 818, 819/BANG/2017. SHRI SHRI REVANASIDDESHWAR CO-OP.CRE.SO.LTD. 2 BY A CO-OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO-OPERATIVE SOCIETY SHALL BE DEDUCTED FROM T HE GROSS TOTAL INCOME. 2. THE LD.CIT(A) FAILED TO APPRECIATE THE FACT THAT THE PROVISIONS OF SECTION 80P(4) OF THE INCOME TAX ACT, 1961 WERE INSERTED W.E.F. 1.4.2007 I.E. FROM THE ASSESSM ENT YEAR 2007-08. AS PER THIS SUB SECTION, THE PROVISION S OF SECTION 80P SHALL NOT APPLY IN RELATION TO ANY CO-O PERATIVE BANK. AS PER LAW, A CO-OPERATIVE BANK SHALL NOT GE T ANY DEDUCTION U/S 80P. CO-OPERATIVE BANKS HAVING BANKIN G LICENCE FROM RBI ARE CARRYING ON BANKING BUSINESS BY ACCEPTING DEPOSITS, GRANTING LOANS, ETC. AND THERE IS NO RESTRICTION TO GENERAL PUBLIC AS IN THE CASE OR CO- OPERATIVE SOCIETY I.E. TO BECOME A MEMBER OF THE BANK FOR THE PURPOSE OF OBTAINING LOAN OR KEEPING DEPOSITS. 3. THE INTEREST RECEIVED BY THE ASSESSEE CO-OPERATI VE SOCIETY FROM THE CO-OPERATIVE BANKS IS NOT ADMISSIB LE AS DEDUCTION U/S 80P(2)(D). THE ASSESSEE SOCIETY IS NO T ENTITLED TO ANY DEDUCTION OF SUCH INTEREST FROM ITS GROSS TOTAL INCOME, AS CLAIMED U/S 80P(2)(D). 4. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT THE SPECIAL LEAVE PETITION BEFORE THE HONBLE SUPREME COURT VIDE SLP NO.18221 OF 2015 FILED ON 1.5.2015 I S CONVERTED TO CIVIL APPEAL NO.5103/2015 WHICH IS PEN DING FOR DEDUCTION ON THE SAME ISSUE IN THE CASE OF CIT VS. BILURU GURBASAVA PATTIN SAHAKARI SANGH NIYAMIT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLL OWS: FOR THE ASSESSMENT YEARS 2011-2012 TO 2013-2014, ASSESSMENTS WERE COMPLETED BY DENYING THE BENEFIT O F DEDUCTION U/S 80P(2) OF THE ACT. THE REASON FOR DEN YING THE BENEFIT OF DEDUCTION U/S 80P(2) OF THE ACT, ACCORDI NG TO THE ASSESSING OFFICER , WAS THAT THE ASSESSEE WAS DOING THE BUSINESS OF BANKING AND IN VIEW OF INTRODUCTION OF SECTION ITA NOS.817, 818, 819/BANG/2017. SHRI SHRI REVANASIDDESHWAR CO-OP.CRE.SO.LTD. 3 80P (4) OF THE ACT WITH EFFECT FROM 01.04.2007, THE COOPERATIVE SOCIETIES ENGAGED IN THE BUSINESS OF BANKING ARE NO T ENTITLED TO THE BENEFIT OF SECTION 80P(2) OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENTS COMPLETED, ASSESSEE FILED APPEALS BEFORE THE FIRST APPELLATE AUTHORITY. THE C IT(A) FOLLOWING THE JUDGMENT OF THE HONBLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT V. SHRI BILUR GURUBASAVA PATTIN SAHAKARI SANGH NIYAMIT, BAGALKOT [(2014) 369 ITR 86 (KAR)] , DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RE LEVANT FINDING OF THE CIT(A) FOR ASSESSMENT YEAR 2011-2012 READS AS FOLLOW:- 9. THE FACT THAT THE APPELLANT IS A COOPERATIVE SO CIETY REGISTERED UNDER THE KARNATAKA CO-OPERATIVE SOCIETI ES ACT, 1959 ENGAGED IN PROVIDING CREDIT FACILITIES TO THE MEMBERS HAS BEEN CLEARLY MENTIONED BY THE A.O. IN TH E AFORESAID ASSESSMENT ORDER. THE AR OF APPELLANT HAS ARGUED AND STATED THAT THE APPELLANT IS A CO-OPERAT IVE SOCIETY REGISTERED UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959 ENGAGED IN PROVIDING CREDIT FACI LITIES ONLY TO ITS MEMBERS AND IT DOES NOT POSSESS ANY BAN KING LICENCE FROM THE RBI. IT IS THEREFORE, CLEAR THAT T HE APPELLANTS CASE IS SQUARELY COVERED BY THE AFORESA ID DECISIONS OF THE JURISDICTIONAL HIGH COURT OF KARNA TAKA AS FACTS ARE SIMILAR AND ISSUE INVOLVED IS IDENTICAL. IT APPEARS SLP FILED BY DEPARTMENT BEFORE HONBLE SUPR EME COURT ON THE SIMILAR ISSUE IS PENDING. UNLESS THE D ECISION OF THE JURISDICTIONAL HIGH COURT IS REVERSED BY THE HONBLE SUPREME COURT, THE POSITION OF THE LAW IS CLEAR THA T THE APPELLANTS CASE IS NOT COVERED BY SECTION 80P(4) A S IT IS NOT A CO-OPERATIVE BANK AND IT IS ENTITLED TO THE DEDUCTION U/S 80P(2)(A)(I). HENCE, THE APPEAL FILED BY THE AP PELLANT IS ALLOWED. THE APPELLANT GETS THE RELIEF OR ` 39,30,133/- UNDER SECTION 80P(2)(A)(I) OF THE INCOME-TAX ACT. ITA NOS.817, 818, 819/BANG/2017. SHRI SHRI REVANASIDDESHWAR CO-OP.CRE.SO.LTD. 4 5. THE REVENUE BEING AGGRIEVED, HAS FILED THE PRESE NT APPEALS BEFORE THE TRIBUNAL. THE LEARNED DEPARTMENT AL REPRESENTATIVE, APART FROM RELYING ON THE GROUNDS R AISED IN THE MEMORANDUM OF APPEAL, SUBMITTED THAT THE JUDGEM ENT RELIED ON BY THE CIT(A) IN DECIDING THE APPEALS IN FAVOUR OF THE ASSESSEE, HAS NOT BEEN ACCEPTED BY THE DEPARTMENT A ND SLP FILED BEFORE THE HONBLE SUPREME COURT WAS CONVERTE D TO CIVIL APPEAL NO.5103 OF 2015. 6. NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWE VER, WE PROCEED TO DISPOSE OF THE MATTER AFTER HEARING THE LEARNED DR. 7. WE HAVE HEARD THE LEARNED DR AND PERUSED THE MAT ERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSEE IN THE INSTAN T CASE, IS A CO-OPERATIVE SOCIETY, REGISTERED UNDER THE KARNATAK A CO- OPERATIVE SOCIETIES ACT, 1959. IT IS PROVIDING CRED IT FACILITIES ONLY TO ITS MEMBERS. THE ASSESSEE DOES NOT HAVE ANY BANKING LICENCE FROM THE RBI TO DO ANY BANKING BUSINESS. TH E HONBLE KARNATAKA HIGH COURT IN THE CASE OF SHRI BILUR GURUBASAVA PATTIN SAHAKARI SANGH NIYAMIT (SUPRA) HAD CATEGORICALLY HELD THAT A CO-OPERATIVE SOCIETY REGISTERED UNDER THE KA RNATAKA CO- OPERATIVE SOCIETIES ACT, WHICH IS NOT HAVING A BANK ING LICENCE FROM THE RBI TO CARRY ON THE BUSINESS OF BANKING, C ANNOT BE DEEMED TO BE A CO-OPERATIVE BANK COMING WITHIN THE AMBIT OF SECTION 80P(4) OF THE ACT. IN THE INSTANT CASE, SIN CE THE ASSESSEE IS NOT HAVING ANY BANKING LICENCE FROM THE RBI AND IT IS PROVIDING CREDIT FACILITIES ONLY TO ITS MEMBE RS, THE DICTUM LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHRI BILUR GURUBASAVA PATTIN SAHAKARI SANGH NIYAMIT ITA NOS.817, 818, 819/BANG/2017. SHRI SHRI REVANASIDDESHWAR CO-OP.CRE.SO.LTD. 5 (SUPRA) IS APPLICABLE TO THE INSTANT CASE . THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SHRI BILUR GURUBASAVA PATTIN SAHAKARI SANGH NIYAMIT (SUPRA) HAS NOT BEEN STAYED / REVERSED BY THE HONBLE SUPREME COURT , HENCE, WE FOLLOW THE DICTUM LAID BY THE JUDGMENT OF THE JU RISDICTIONAL HIGH COURT AND UPHOLD THE ORDER OF THE CIT(A) AS CO RRECT AND IN ACCORDANCE WITH LAW. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THESE APPEALS BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 03 RD DAY OF NOVEMBER , 2017. SD/- SD/- (JASON P.BOAZ) (GEORGE GEORGE K.) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE ; DATED : 03 RD NOVEMBER, 2017. DEVDAS* 8 COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER, (ASSTT. REGISTRAR) ITAT, BANGALORE 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT, BELAGAVI. 4. CIT(A), BELAGAVI 5. DR, ITAT, BANGALORE 6. GUARD FILE.