SHREE OMKAR CO-OPERATION CREDIT SOCIETY LTD., Mumbai V. ITO WARD NO. 22(2)-4, Mumbai

ITA 931/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1793 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 18-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHREEKALA PARADESHI
• Assessee Lawyers: B R SAWANT
• Keywords: Co-operative Credit Society; Set aside
• Section: 143(3); 142(1); 80P; 250; 143(2); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 931/MUM/2019 ( ASSESSMENT YEARS: 2012-13 ) SHREE OMKAR CO-OPERATIVE CREDIT SOCIETY LTD., 1/6 YASHODA NIWAS BORALA VILLAGE, GOVANDI, MUMBAI 400088. / VS. ITO, WARD NO. 22(2)-4, VASHI RLY STN COMMERCIAL COMPLEX, 4 TH FLOOR, VASHI MUMBAI 400703. ./ ./ PAN/GIR NO. : ABMFS2073G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI B.R. SAWANT, AR / RESPONDENT BY : MS. SHREEKALA PARADESHI, DR / DATE OF HEARING 11/11/2020 !'# / DATE OF PRONOUNCEMENT 17/11/2020 / O R D E R PER PAVAN KUMAR GADALE - JM: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-25, MUMBAI PASSED U/S 221(1) AND 250 OF THE ACT. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. A.O ERRED IN LEVYING PENALTY U/S. 221(1 ) OF ITA NO .931 /MUM/2019 SHREE OMKAR COOPERATIVE CREDIT SOCIETY LTD., MUMBAI . - 2 - THE ACT OF RS. 3,30,930/- ON THE BASIS OF INTIMATIO N U/S. 143(1)(A) AND CIT(A) HAS ALSO ERRED IN SUSTAINING T HE SAME THOUGH THE CASE WAS UNDER SCRUTINY ASSESSMENT U/S. 143(3) OF THE ACT AND THEREFORE, THE SAID INTI MATION HAS MERGED INTO ASSESSMENT ORDER U/S. 143(3) OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. A.O AND CIT(A)-25, HAS FAILED TO APPREC IATE THAT THE NET TAXABLE INCOME OF THE SOCIETY IS NIL A FTER CLAIM OF DEDUCTION U/S 80P OF THE ACT. 3. THAT THE ORDER OF PENALTY PASSED BY THE A.O U/S 221(1) OF THE ACT, AND SUSTAINED BY THE CIT(A), HAS BECOME IN FRUCTUOUS IN VIEW OF THE FACT THAT THE CI T(A) HAS ALLOWED THE CLAIM OF DEDUCTION U/S. 80P OF THE ACT, FOR THE ENTIRE INCOME EARNED BY THE SOCIETY AND HENCE, THE TAXABLE INCOME HAS BECOME NIL AS CLAIMED BY THE APPELLANT SOCIETY. 4. THAT THE CIT(A) HAS PASSED ORDER ON QUANTUM APPEAL ON 04.09.2018 WHEREIN THE CLAIM OF DEDUCTION U/S 80P OF THE ACT IS ALLOWED. THEREFORE, INCOME OF TH E APPELLANT SOCIETY HAS BECOME NIL. HOWEVER, THE CIT (A) WHILE PASSING ORDER ON PENALTY APPEAL HAS NOT CONSI DERED THE EFFECT OF QUANTUM APPEAL WHILE DISPOSING OF THE PENALTY APPEAL. IN VIEW OF THE SAID FACT THE INCOM E DETERMINED AFTER APPEAL EFFECT IS NIL AND THEREFORE , THE ORDER ON PENALTY PASSED BY THE A.O BECOMES NULL AND VOID. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER MODIFY AND DELETE ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE IS A COOPERATIVE CREDIT SOCIETY CLASSIFIED AS RESOURC E ITA NO .931 /MUM/2019 SHREE OMKAR COOPERATIVE CREDIT SOCIETY LTD., MUMBAI . - 3 - SOCIETY U/SEC 12 OF THE MAHARASHTRA COOPERATIVE SOCIETY ACT 1960, AND IS ENGAGED IN BUSINESS OF PROVIDING CREDIT FACILITIES AND BANKING ACTIVITIES WITH ITS MEMBERS. THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 30.09.2012 WITH TOTAL INCOME OF RS.NIL AFTER CLAIMING DEDUCTION U/S 80P OF THE ACT OF RS. 9,76,280/-. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) AND 142(1) OF THE AC T WERE ISSUED. IN RESPONSE TO THE NOTICE, THE LD. LD. AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED THE DETAILS. THE A.O ON PERUSAL OF THE FINANCIAL STATEMENTS AND THE CLAIM OF THE ASSESSEE U/S 80P OF THE ACT, IS OF THE OPINION THAT THE ASSE SSEE IS A COOPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY AND PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK, AND HE HAS CATEGORIZED THE ASSESSEE AS COOPERATIVE BANK AS P ER CONDITIONS LAID DOWN U/S 56(C)(CCV) OF PART V OF T HE BANKING REGULATION ACT, 1949.HENCE DENIED THE CLAIM DEDUCTION U/S 80P(2)(A)(I)OF THE ACT AND ASSESSED THE TOTAL INCOME OF RS.9,76,280/-AND PASSED ORDER U/S 143(3) OF THE ACT ON 10.03.2015. SUBSEQUENTLY, THE A.O INITIATED PENALTY PROCEEDINGS U/S 221(1) OF THE ITA NO .931 /MUM/2019 SHREE OMKAR COOPERATIVE CREDIT SOCIETY LTD., MUMBAI . - 4 - ACT AND OBSERVED THAT THE ASSESSEE IS IN DEFAULT FO R NONPAYMENT OF SELF ASSESSMENT TAX. SINCE THERE WAS NO COMPLIANCE ON THIS DISPUTED ISSUE, THE A.O HAS LEVIED A PENALTY OF RS. 3,30,930/- U/S 221(1) OF TH E ACT VIDE ORDER DATED 05.03.2013. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE HAS FILED AN APPEAL WIT H THE CIT(A). WHEREAS, THE CIT(A) CONCORD WITH FINDI NGS AND ACTION OF THE A.O AND DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE HAS FILED AN APPEAL WITH THE TRIBUNAL. 3. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESS EE SUBMITTED THAT THE CIT(A) HAS ERRED IN CONFIRMING T HE LEVY OF PENALTY, IRRESPECTIVE OF THE FACT THAT THE ASSESSEE IS A COOPERATIVE SOCIETY AND IS ENTITLED F OR DEDUCTION U/S 80P OF THE ACT. FURTHER, IN THE ASSESSMENT PROCEEDINGS, THE A.O HAS DISALLOWED THE CLAIM OF DEDUCTION U/SEC 80P OF THE ACT. BUT ON APPEAL, THE LDCIT(A) HAS ALLOWED THE ASSESSEE CLAIM AND OBSERVED THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. THEREFORE, T HE CONTENTIONS OF THE LD. AR ARE THAT, THE ASSESSEE IS NOT REQUIRED TO PAY SELF ASSESSMENT TAX AS THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80P OF THE ACT IN THE ITA NO .931 /MUM/2019 SHREE OMKAR COOPERATIVE CREDIT SOCIETY LTD., MUMBAI . - 5 - RETURN OF INCOME FILED AND IS NOT DISPUTED AND PRAY ED FOR ALLOWING THE ASSESSEES APPEAL. 4. CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE LDCIT(A). 5. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. PRIMA-FACIE, THE SOL E DISPUTED ISSUE IS IN RESPECT OF LEVY OF PENALTY U/S 221(1) OF THE ACT BY THE A.O FOR NONPAYMENT OF SELF ASSESSMENT TAX. THE LD. AR ARGUED THAT THE ASSESSE E IS A COOPERATIVE SOCIETY AND ENTITLED FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT AND FILED THE RETURN OF IN COME ON 30.09.2012 DECLARING THE TOTAL INCOME OF RS. NIL AFTER CLAIMING THE DEDUCTION U/S 80P OF THE ACT OF RS. 9,76,280/-. THE LD. AR DEMONSTRATED THE COPY OF INCOME TAX RETURN IN PAPER BOOK AT PAGE 15 TO SUBSTANTIATE THE CLAIM. WE FIND THAT, THE ASSESSMEN T ORDER WAS PASSED U/S 143(3) OF THE ACT DISALLOWING THE CLAIM OF DEDUCTION U/SEC80P OF THE ACT. ON APPEAL T HE LDCIT(A) HAS ALLOWED THE ASSESSEES CLAIM. EVEN OTHERWISE, WHEN THE QUANTUM ADDITION HAS BEEN DELETED BY THE APPELLATE AUTHORITY, PENALTY ON SUCH ADDITION IS NOT SUSTAINABLE. FURTHER, ON PERUSAL OF THE ITA NO .931 /MUM/2019 SHREE OMKAR COOPERATIVE CREDIT SOCIETY LTD., MUMBAI . - 6 - FACTS, WE FOUND THAT THE ASSESSEE HAS FILED THE RET URN OF INCOME DISCLOSING TOTAL INCOME AS RS. NIL AND IS ALSO EVIDENT FROM PAGE 1 OF THE ASSESSMENT ORDER. WE ARE OF THE OPINION, THAT WHEN THE ASSESSEE HAS FILE D THE RETURN OF INCOME WITH RS. NIL. INCOME, THERE IS NO QUESTION OF PAYMENT SELF ASSESSMENT TAX. THE ASSESSEE HAS BOUGHT THESE FACTS TO THE KNOWLEDGE OF THE HIGHER AUTHORITIES BUT THE CIT(A) HAS CONFIRMED THE ORDER OF LEVY OF PENALTY. ACCORDINGLY,WE CONSIDERED THE FACTS, SUBMISSIONS AND PROVISIONS OF LAW AND SET ASIDE THE ORDER OF THE CIT(A) AND DIRE CT THE ASSESSING OFFICER TO DELETE THE PENALTY AND ALL OW THE GROUNDS OF APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.11.2020 SD/- SD/- (PRAMOD KUMAR) (PAVAN KUMA R GADALE ) VICE PRESIDENT JUDICIAL MEMBER MUMBAI, DATED 17/11/2020 KRK, PS ITA NO .931 /MUM/2019 SHREE OMKAR COOPERATIVE CREDIT SOCIETY LTD., MUMBAI . - 7 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. &'( ) / THE CIT(A) 4. ) ( ) / CONCERNED CIT 5. ,-. //'( , '(# , & / DR, ITAT, MUMBAI 6. .34 5 / GUARD FILE. / BY ORDER, , / //TRUE COPY// 1. / ( ASST. REGISTRAR) !' #, / ITAT, MUMBAI