Income tax Officer,Ward 1, BHANDARA(MH) V. M/s Bhandara Zilla Shashkiaya Runganalayeen Karmachari Sah.Pat Sanstha Maryadit, BHANDARA(MH)

ITA 90/NAG/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3114 (ITAT-NAGPUR)
• Duration Of Justice: 7 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SSHRISMT
• Assessee Lawyers: NAG H WANARE M MANI NAG
• Section: 143(3); 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) . . , . / , . . BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER /AND SHRI RAJENDRA, ACCOUNTANT MEMBER S.N. ITA NO. & AY APPELLANT RESPONDENT 1. 87/NAG/2012 (2009-10) ITO WARD-1, BHANDARA M/S. BHANDARA ZILLA PRATHAMIK SHIKSHAK SAHAKARI SAMITI LTD., BHANDARA. PAN: AAAAB 0466 G 2. 88/NAG/2012 (2009-10) ITO WARD-1, BHANDARA M/S. BHANDARA NAGAR PARISHAD EMPLOYEES CREDIT CO-OP. SOCIETY, BHANDARA. PAN: AAAAB 1681 M 3. 89/NAG/2012 (2009-10) ITO WARD-1, BHANDARA M/S. BHANDARA ZILLA PARISHAD MADHYAMIK SHIKSHAK SAH PAT SANSTHA LTD., BHANDARA. PAN: AAAAB 2202 N 4. 90/NAG/2012 (2009-10) ITO WARD-1, BHANDARA M/S. BHANDARA ZILLA SHASHKIAYA RUNGNALAYEEN KARMACHARI SAH. PAT SANSTHA MARYADIT, BHANDARA. PAN: AAHFB 7475 P 5. 91/NAG/2012 (2009-10) ITO WARD-1, BHANDARA M/S. B.D.P.W.D. EMPLOYEES CO-OP. SOCIETY LTD., BHANDARA. PAN: AAAAB 4724 H 6. 92/NAG/2012 (2009-10) ITO WARD-1, BHANDARA M/S. BHANDARA ZILLA PATBANDHARE SHASHKIYA KARMACHARI SAHAKARI PAT SANSTHA, BHANDARA. PAN: AAAAB 2096 G ITA NO. REVENUE BY (S/SHRI/SMT) ASSESSEE BY (S/SHRI /SMT) 87/NAG/2012 (2009 - 10) H. WANARE M. MANI 88/NAG/2012 (2009-10) SURESH P. TOLANI 89/NAG/2012 (2009-10) SUNDEEP MOTWANI 90/NAG/2012 (2009-10) M. MANI 91/NAG/2012 (2009-10) M. MANI 92 /NAG/2012 (2009 - 10) M. MANI & MUKESH AGRAWAL / DATE OF HEARING : 29-01-2013 !' / DATE OF PRONOUNCEMENT : 06-02-2013 #$ / O R D E R PER BENCH, IN ALL THE ABOVE MENTIONED SIX APPEALS, ASSESSING O FFICERS (AOS) HAVE FILED FOLLOWING COMMON GROUNDS OF APPEAL - ONLY DIFFERENC E IN THEM IS OF AMOUNT OF DEDUCTION CLAIMED. IN THE CASE OF ITA NO. 87/NAG/1 2 GROUNDS OF APPEAL READ AS UNDER: 87 88 89 90 91 92/NAG/2012 (2009-10) 2 1 .ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR THE DEDUCTION OF RS. 72,68,763/- U/S. 80 P(2)(A)(I) OF THE IT ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE CIT(A ) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSEE IS NOT A COOPERATIVE BANK FOR THE PURPOSE OF SECTION 80P(4) OF THE I.T. ACT, 1961. 3. ANY OTHER GROUND THAT MAY BE RAISED AT THE TIM E OF HEARING. IN OTHER FIVE CASES, THE AMOUNTS IN DISPUTE IN GOA NO.1 ARE AS FOLLOWS: RS. 11,39,506/- (ITA NO. 88/NAG/12); RS. 18,10,126 /- (ITA NO. 89/NAG/12); RS. 10,17,460/- (ITA NO.90/NAG/12); RS. 15,61,467/- (ITA NO. 91/NAG/12); & RS. 38,12,798/- (ITA NO. 92/NAG/12). AS THE ARGUMENTS OF THE AOS AND DECISIONS OF THE FI RST APPELLATE AUTHORITIES (FAAS) IN THESE CASES ARE COMMON, FOR THE SAKE OF CONVENIE NCE, WE ARE PASSING A CONSOLIDATED ORDER. THE DETAILS OF RETURNS FILED, RETURNED INCOM ES, ASSESSED INCOMES, DATES OF ORDER U/S. 143(3) IN THESE CASES CAN BE SUMMARIZED AS UNDER: ITA NO. & AY DATE OF RETURN RETURNED INCOME DATE OF ORDERS U/S. 143(3) OF THE ACT ASSESSED INCOME DATE OF ORDER OF FAA (CIT(A)-II NAGPUR) (1) (2) (3) (4) (5) (6) 87/NAG/2012 (2009-10) 13-07-2009 NIL 18-10-2011 72,68,760/- 16-12-2011 88/NAG/2012 (2009-10) 10-08-2009 NIL 28-09-2011 13,64,510/- 16-12-2011 89/NAG/2012 (2009 - 10) 02 - 11 - 2009 NIL 14 - 10 - 2011 18,56,030/ - 16 - 12 - 2011 90/NAG/2012 (2009-10) 25-09-2009 NIL 28-09-2011 10,17,460/- 16-12-2011 91/NAG/2012 (2009 - 10) 29 - 09 - 2009 NIL 28 - 09 - 2011 15,61,470/ - 16 - 12 - 2011 92/NAG/2012 (2009-10) 01-08-2009 NIL 18-10-2011 39,03,900/- 16-12-2011 2. ASSESSEE CREDIT CO-OPERATIVE SOCIETIES, ENGAGED I N THE BUSINESS OF BANKING / PROVIDING CREDIT FACILITIES TO THEIR MEMBERS FILED THEIR RETURNS OF INCOME AS INDICATED IN THE ABOVE TABLE UNDER COLUMN NO.2 DECLARING TOTA L INCOME AS MENTIONED AT COLUMN NO. 3. ASSESSMENTS WERE FINALISED BY THE AOS U/S. 143(3) OF THE INCOME TAX ACT, 1961 (ACT) ON VARIOUS DATES. 3. DURING THE ASSESSMENT PROCEEDINGS, AOS FOUND THAT A SSESSEE CO-OPERATIVE SOCIETIES HAD CLAIMED DEDUCTION U/S. 80P(2)(D) OF T HE ACT. THEY FURTHER MADE ENQUIRIES ABOUT THE SAID DEDUCTION AND AFTER CONSID ERING THE SUBMISSIONS OF THE 87 88 89 90 91 92/NAG/2012 (2009-10) 3 SOCIETIES, THEY HELD THAT ASSESSEE-SOCIETIES WERE N OT ENTITLED TO DEDUCTION AS PER THE PROVISIONS OF SEC. 80 P(2)(D) OF THE ACT. INVOKIN G THE PROVISIONS OF SECTION 80P(4) OF THE ACT THEY HELD THAT THE ASSESSEE SOCIETIES HA D WRONGLY CLAIMED THE DEDUCTION IN THE AYS. CONCERNED. 4. SOCIETIES PREFERRED APPEALS BEFORE THE FAAS. AFTER CONSIDERING THEIR SUBMISSIONS, FAAS HELD THAT AS PER SECTION 80P(2) T WO CATEGORIES OF CO-OPERATIVE SOCIETIES HAVE BEEN CONTEMPLATED BY THE ACT-ONE THA T CARRIED ON BUSINESS OF BANKING AND THE OTHER THAT PROVIDED CREDIT FACILITIES TO IT S MEMBERS. AS PER FAAS, BOTH THE SOCIETIES PERFORMED DISTINCT AND SEPARATE JOBS, THA T PROVISIONS OF THE SECTION 80P USED WORD OR TO DIFFERENTIATE BETWEEN THESE TWO TYPES OF SOCIETIES. AFTER CONSIDERING THE RELEVANT PROVISIONS OF BANKING REGULATION ACT, MAHA RASHTRA CO-OPERATIVE SOCIETY ACT, CIRCULAR ISSUED BY THE RBI AND THE EXPLANATORY NOTES ON PROVISIONS RELATING TO FINANCE ACT, 2006 (CIRCULAR NO. 14/2006), FAA HELD THAT ASSESSEE-SOCIETIES WERE NOT CO-OPERATIVE BANKS THEY WERE CO-OPERATIVE SOCIETI ES. FOR ARRIVING AT THE ABOVE SAID CONCLUSION, FAA OBSERVED AS UNDER: I. ASSESSEES DID NOT OBTAIN LICENSE FROM THE RESER VE BANK OF INDIA U/S. 22 TO FUNCTION AS A BANK. II. ASSESSEES HAD NO POWER TO ISSUE CHEQUE FACILITI ES TO MEMBERS WHICH WAS THE MOST COMMON CHARACTERISTIC OF THE BANK. III. ASSESSEE SOCIETY HAD TO COMPLY WITH THE RULES FRAMED FOR CO-OPERATIVE SOCIETIES UNDER THE MAHARASHTRA CO-OPERATIVE SOCIETIES RULES. IV. AS PER THE BANKING REGULATION (CO-OPERATIVE SOC IETIES) RULES, 1966, CO-OPERATIVE BANK WERE SUBJECT TO RESERVE BANK REGULATIONS AND HAD TO SUBMIT VARIOUS RETURNS EVERY MONTH PRESCRIBED UNDER SUCH RULES. THE MANNER OF PUBLICA TION OF ACCOUNTS AND BALANCE SHEET WAS ALSO PRESCRIBED. AOS HAD NOT POINTED OUT THAT ASSE SSEES WERE ALSO UNDER ANY OBLIGATION TO ADHERE TO THESE REGULATIONS. HE FURTHER HELD THAT AOS HAD FAILED TO APPRECIATE THE DISTINCTION BETWEEN CREDIT CO-OPERATIVE SOCIETIES AND CO-OPERAT IVE BANKS, THAT CREDIT CO-OPERATIVE SOCIETIES WERE IN THE NATURE OF CREDIT RESOURCE SOC IETY WHICH STRIVED TO OBTAIN CREDITS FOR ITS MEMBERS WITH THE OBJECTIVES OF FACILITATING CREDIT TO INDIVIDUALS WHILE CO-OPERATIVE BANKS WERE FULL-FLEDGED BANKING ORGANISATIONS, THAT THE A SSESSEE CO-OPERATIVE CREDIT SOCIETIES WERE UNDER THE PURVIEW OF MAHARASHTRA CO-OPERATIVE SOCIE TY ACT AND COULD NOT CONDUCT THE BUSINESS OF BANKING AS CLAIMED BY THE AO WITHOUT FU LFILLING THE CONDITIONS OF THE REGISTRAR OF SOCIETIES AND THE RESERVE BANK OF INDIA, THAT THE A CTION OF THE AO WAS NOT JUSTIFIED, THAT PROVISIONS OF SECTION 80P(4) HAD ONLY SOUGHT TO EXC LUDE THE CO-OPERATIVE BANKS FROM AVAILING THE BENEFITS OF THE DEDUCTION. AS A RESULT, APPEALS FILED BY THE ASSESSEE-SOCIETI ES WERE ALLOWED BY THE FAA. 5. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) RELIED ON THE ORDER OF THE AO AND IT WAS SUBMITTED THAT ASSESSEE-SOCIETIES WERE A DVANCING LOANS AND RECEIVING INTERESTS FROM OTHER ENTITIES THAT INTEREST RECEIVE D FROM SUCH PERSONS WAS NOT EXEMPT AS PER THE PROVISIONS OF THE ACT. AUTHORISED REPRE SENTATIVES (ARS) SUPPORTED THE ORDER OF THE FAA AND RELIED UPON THE ORDER OF THE M EDICAL COLLEGE HOSPITAL 87 88 89 90 91 92/NAG/2012 (2009-10) 4 EMPLOYEES CREDIT CO-OP. SOCIETY LTD., (ITA NO.85/NA G/2011 AY.2007-08) DELIVERED BY THE NAGPUR E-BENCH ON 19-12-2012. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E ORDERS OF THE REVENUE AUTHORITIES. WE ARE OF THE OPINION THAT ORDERS OF THE FAAS DO NOT SUFFER FROM ANY LEGAL INFIRMITY. AFTER ANALYSING THE VARIOUS PROVI SIONS OF THE ACTS AND THE CIRCULARS (ISSUED BY THE RBI AND CBDT) THEY HAVE HELD THAT AS SESSEES WERE NOT A CO-OPERATIVE BANKS AS ENVISAGED BY THE AOS IN THEIR ASSESSMENT O RDERS. IN OUR CONSIDERED OPINION, ASSESSEE CO-OPERATIVE SOCIETIES CANNOT BE DEPRIVED OF THE BENEFITS OF DEDUCTIONS AVAILABLE AS PER THE PROVISIONS OF SECTION 80P(2)(A ) OF THE ACT BY INVOKING THE PROVISIONS OF SECTION 80P(4) OF THE ACT, AS DONE BY THE AOS. WE FULLY AGREE WITH THE FAAS THAT THE APPELLANTS ARE CREDIT CO-OPERATIVE SO CIETIES AND NOT CO-OPERATIVE BANKS AND THEREFORE THEY ARE ENTITLED TO CLAIM DEDU CTION AVAILABLE UNDER CHAPTER VI-A OF THE ACT. AS POINTED OUT BY THE ARS OF THE ASSES SEES, WE HAVE PASSED SIMILAR ORDER IN THE CASE OF MEDICAL COLLEGE HOSPITAL EMPLOYEES C REDIT CO-OP. SOCIETY LTD., (SUPRA). FOLLOWING OUR OWN SAID ORDER, WE DECIDE TH E ALL THE GROUNDS OF APPEALS AGAINST THE AOS. 7. AS A RESULT, ALL THE 06 APPEALS I.E., ITA NOS. 87/NAG/2012 (2009-10); 88/NAG/2012 (2009-10); 89/NAG/2012 (2009-10); 90/N AG/2012 (2009-10); 91/NAG/2012 (2009-10) AND 92/NAG/2012 (2009-10) STAND DISMISSED. ORDER PRONOUNCED BY E-BENCH AT MUMBAI ON THIS 6 TH DAY OF FEBRUARY, 2013 %& '() - &*+ , 6 TH FEBRUARY 2013 ! #$ !-' . . SD/- SD/- ( . . / R.K. GUPTA ) ( / RAJENDRA ) #( / JUDICIAL MEMBER #( / ACCOUNTANT MEMBER %& MUMBAI, .# DATE: 6 TH FEBRUARY, 2013 TNMM 87 88 89 90 91 92/NAG/2012 (2009-10) 5 COPY TO: 1. ITO WARD-1, GANGA MOTORS BUILDING, N.H. NO.6, BHAN DARA. 2. ITO WARD-1, GANGA MOTORS BUILDING, N.H. NO.6, BHAN DARA. 3. ITO WARD-1, GANGA MOTORS BUILDING, N.H. NO.6, BHAN DARA. 4. ITO WARD-1, GANGA MOTORS BUILDING, N.H. NO.6, BHAN DARA. 5. ITO WARD-1, GANGA MOTORS BUILDING, N.H. NO.6, BHAN DARA. 6. ITO WARD-1, GANGA MOTORS BUILDING, N.H. NO.6, BHAN DARA. 1. M/S. BHANDARA ZILLA PRATHAMIK SHIKSHAK SAHAKARI SAM ITI LTD., MAHAL ROAD, NEAR PANDE MAHAL, BHANDARA SAH. PAT SANSTHA M ARYADIT, BHANDARA. 2. M/S. BHANDARA NAGAR PARISHAD EMPLOYEES CREDIT CO-OP . SOCIETY, TILAK WARD, BHANDARA. 3. M/S. BHANDARA ZILLA PARISHAD MADHYAMIK SHIKSHAK SA H PAT SANSTHA LTD., TAH: MOHADI, DIST. BHANDARA. 4. M/S. BHANDARA ZILLA SHASHKIAYA RUNGNALAYEEN KARMACH ARI SAH. PAT SANSTHA MARYADIT, PROFESSOR COLONY, BHANDARA. 5. M/S. B.D.P.W.D. EMPLOYEES CO-OP. SOCIETY LTD., APNA NAGAR, TAKIYA WARD, BHANDARA. 6. M/S. BHANDARA ZILLA PATBANDHARE SHASHKIYA KARMACHA RI SAHAKARI PAT SANSTHA, BHANDARA, OPP: J.M. PATEL COLLEGE, BHANDAR A. 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE /- 0 //TRUE COPY// BY ORDER, ASST. REGISTRAR, ITAT