Punjab State Co-operative Development Society Ltd., Chandigarh V. ACIT, C-4(1), Chandigarh

ITA 966/CHANDI/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2172 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-03-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 01-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA CIT
• Keywords: Difference of opinion; Change of opinion
• Section: 80(P); 80P; 2(19); 147; 148

Judgement Text

ITA NO NO. 966-C-2019 M/S PUNJAB STATE CORP. DEVELOPMENT SOCIETY LTD., CH ANDIGARH 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH , !' # $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 966/CHD/2019 ASSESSMENT YEAR : 2012-13 M/S PUNJAB STATE CO-OPERATIVE DEVELOPMENT SOCIETY LTD., SCO NO. 175-187, SECTOR 34C, CHANDIGARH. THE ACIT, CIRCLE-4(1), CHANDIGARH. PAN NO: AAAAP2719G APPELLANT RESPONDENT (HEARING THROUGH VIDEO CONFERENCING) !' ASSESSEE BY : SHRI ATUL GOYAL (C.A.) #!' REVENUE BY : SHRI SANDEEP DAHIYA (CIT ) $ %! & DATE OF HEARING : 04/03/2021 '()*! & DATE OF PRONOUNCEMENT : 04/03/2021 ')/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 11.12.2018 OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, CHANDIGARH [IN SHORT CIT(A)]. ITA NO NO. 966-C-2019 M/S PUNJAB STATE CORP. DEVELOPMENT SOCIETY LTD., CH ANDIGARH 2 2. IN THIS APPEAL THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) AND A.O. HAVE ERRED IN LAW IN UPHOLDING THE PROCEEDINGS UNDER THE PROVISIONS OF SECTION 147 OF THE INCOME TAX ACT, 1961. 2. THAT THE LD. CIT(A) AND A.O. HAVE ERRED IN LAW I N LAW AND ON FACTS DENYING THE DEDUCTION UNDER SECTION 80P TO THE SOCI ETY IN RESPECT OF INTEREST PAID WITHOUT APPRECIATING THAT THE SOCIETY IS ENGAG ED IN THE BUSINESS OF PROVIDING CREDIT OF THE ACT ITS MEMBERS. 3. THAT THE LD. CIT(A) AND A.O. HAVE ERRED IN LAW I N LAW AND ON FACTS IN HOLDING THE FUNDS AS SURPLUS FUNDS OF THE SOCIETY W HEN THE SOCIETY IN ACCORDANCE WITH ITS BYE LAWS REQUIRED TO KEEP THE C ORPUS FUNDS OF RS. 20CRORES WITH BANK. 4. THAT THE LD. CIT(A) AND A.O. HAVE ERRED IN LAW I N LAW AND ON FACTS IN HOLDING THAT THE CO-OPERATIVE BANK IS NOT A CO-OPER ATIVE SOCIETY U/S 2(19) OF THE ACT. 5. THAT THE ASSESSEE CRAVES PERMISSION TO ADD, AMEN D OR DELETE ANY GROUND OF APPEAL BEFORE THE FINALIZATION OF APPELLATE PROC EEDINGS. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS BEEN WRONGLY DENIED DEDUCTION U/S 80P(2)(A)(I) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') AN D EVEN IN THE ALTERNATIVE THE ASSESSEE IS ALSO ENTITLED TO DEDUC TION U/S 80P(2)(D) OF THE INCOME TAX ACT. FOR THE SAKE OF CONVENIENCE, TH E RELEVANT PART OF SECTION 80(P) IS REPRODUCED AS UNDER:- ITA NO NO. 966-C-2019 M/S PUNJAB STATE CORP. DEVELOPMENT SOCIETY LTD., CH ANDIGARH 3 DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOCI ETIES. 80P (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A CO-OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUB JECT TO THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUB-SECTION (2) , IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL BE THE FOLLOWING, NAMELY:- (A) IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED IN- (I) CARRYING ON THE BUSINESS OF BANKING OR PROVIDIN G CREDIT FACILITIES TO ITS MEMBERS, OR (II).. THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUS INESS ATTRIBUTABLE TO ANY JONE OR MORE OF SUCH ACTIVITIES . 4. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ONLY ACTIVITY OF THE ASSESSEE IS RELATING TO PROVIDING C REDIT FACILITIES TO ITS MEMBERS. WHEN THE SURPLUSES GENERATED FROM THESE AC TIVITIES HAS BEEN INVESTED IN A COOPERATIVE BANK FOR SHORT TERM PERIO D CERTAIN INTEREST INCOME IS RECEIVED WHICH IS LINKED TO THE ACTIVITIE S OF ASSESSEE OF GIVING CREDIT TO ITS MEMBERS, WHEREUPON, THE DEDUCT ION OF SECTION 80P(2)(A)(I) HAS BEEN CLAIMED. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS TAKEN A SPECIFIC PLEA IN THIS RESPECT BEFORE THE LD. CIT(A), HOWEVER, THE LD. CIT(A) HAS FAILED TO DECIDE THE SAME. 5. THE NEXT CONTENTION OF THE LD. COUNSEL FOR THE A SSESSEE IS THAT THE ASSESSEE IS OTHERWISE ELIGIBLE FOR DEDUCTION U/ S 80P(2)(D) OF THE ITA NO NO. 966-C-2019 M/S PUNJAB STATE CORP. DEVELOPMENT SOCIETY LTD., CH ANDIGARH 4 ACT. THE RELEVANT PART OF THE SAID PROVISIONS FOR T HE SAKE OF READY REFERENCE IS REPRODUCED AS UNDER:- 80P(2)(D) IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR DIVI DENDS DERIVED BY THE CO-OPERATIVE SOCIETY FROM ITS INVESTMENTS W ITH ANY OTHER CO-OPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT SINCE THE ASSESSEE HAD MADE INVESTMENTS / DEPOSITS OF SURPLUS ES WITH A COOPERATIVE BANK, WHICH OTHERWISE IS A COOPERATIVE SOCIETY, THEREFORE, THE ASSESSEE IS ENTITLED TO DEDUCTION U/ S 80P(2)(D) OF THE ACT. 7. WE ARE NOT CONVINCED WITH THE ABOVE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. AS PER THE PROVISIONS AS REPRODUCED ABOVE, THE INCOME BY WAY OF INTEREST OR DIVIDEND DERIVED B Y CO-OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO-OPER ATIVE SOCIETY IS AN ALLOWABLE DEDUCTION. HOWEVER, SECTION 80P(2)(4) OF THE ACT STATES AS UNDER:- 80P(4) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN R ELATION TO ANY CO-OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT ITA NO NO. 966-C-2019 M/S PUNJAB STATE CORP. DEVELOPMENT SOCIETY LTD., CH ANDIGARH 5 SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. 8. AS PER THE ABOVE REPRODUCED PROVISIONS OF SECTIO N 80P(2)(4), A CO-OPERATIVE BANK AS SUCH DOES NOT MEAN A COOPERAT IVE SOCIETY. THE LD. COUNSEL FOR THE ASSESSEE IN THIS RESPECT HAS SU BMITTED THAT THE INTENTION OF THE LEGISLATURE IS TO DENY DEDUCTION T O THE COOPERATIVE BANK AND NOT TO THE COOPERATIVE SOCIETY. HOWEVER, WE ARE NOT CONVINCED WITH THE ABOVE ARGUME NT OF THE LD. COUNSEL FOR THE ASSESSEE. AS PER THE PROVISIONS OF SECTION 80P(2)(D), WHAT HAS BEEN ALLOWED IS INTEREST OR DIV IDEND DERIVED BY THE CO-OPERATIVE SOCIETY WITH INVESTMENT IN ANY ANO THER CO-OPERATIVE SOCIETY. THE MEANING OF CO-OPERATIVE SOCIETY CANNOT BE TAKEN DIFFERENTLY FOR THE INVESTOR AND FOR THE INSTITUTIO N (INVESTEE). THE PROVISIONS OF SECTION 80P(4) SPECIFICALLY STATES TH AT THE PROVISIONS OF THIS SECTION WILL NOT APPLY TO ANY CO-OPERATIVE BAN K. THE PLAIN MEANING OF WHICH IS THAT THE SAME INTERPRETATION IS TO BE GIVEN IN CASE OF AN INVESTOR CO-OPERATIVE SOCIETY AND TO THE BANK IN WHICH THE INVESTMENT IS MADE. THE CO-OPERATIVE BANK CANNOT BE GIVEN A DIFFERENT INTERPRETATION AS AN INVESTEE BANK. TWO D IFFERENT MEANINGS CANNOT BE ASCRIBED TO THE SAME WORD IN THE SAME PRO VISION. ITA NO NO. 966-C-2019 M/S PUNJAB STATE CORP. DEVELOPMENT SOCIETY LTD., CH ANDIGARH 6 9. IN VIEW OF THIS, WE HOLD THAT THE ASSESSEE IS NO T ENTITLED TO ANY DEDUCTION ON INTEREST INCOME AS PER THE PROVISIONS OF SECTION 80P(2)(D) OF THE ACT. HOWEVER, SO FAR AS THE CLAIM OF THE ASSESSEE THAT THE ASSESSEE IS ENTITLED TO DEDUCTION US 80P(2)(A) IS CONCERNED, THE SAID ISSUE HAS NOT BEEN LOOKED INTO BY THE LD. CIT( A) DESPITE A GROUND IN THIS RESPECT TAKEN BY THE ASSESSEE BEFORE THE LD. CIT(A). 10. IN VIEW OF THIS, THE MATTER IS RESTORED TO THE FILE OF THE LD. CIT(A) FOR THE LIMITED PURPOSE OF ADJUDICATING ON THE PLEA OF THE ASSESSEE REGARDING ITS ELIGIBILITY OF DEDUCTION OF INTEREST INCOME U/S 80P(2)(A) OF THE ACT. THE LD. CIT(A) WILL GIVE PROP ER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE AND ADDRESS ON THI S ISSUE BY WAY OF A SPEAKING ORDER. 11. THE LD. COUNSEL, AT THIS STAGE, HAS SUBMITTED T HAT THE ASSESSEE HAS ALSO RAISED THE ISSUE OF VALIDITY OF THE REOPE NING OF THE ASSESSMENT U/S 147 OF THE ACT. WE FIND THAT THE ASS ESSING OFFICER NOTICED THAT AS PER THE PROVISIONS OF THE STATUTE, THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION U/S 80P(2)(D) OF THE ACT. THI S WAS NOT A CASE OF CHANGE OF OPINION ON CERTAIN EVIDENCES, RATHER, THE ASSESSING OFFICER HAS NOTICED THE ESCAPEMENT OF INCOME IN VIEW OF THE EXPRESS PROVISIONS OF THE STATUTE. WE, THEREFORE, FIND NO I NFIRMITY IN THE ITA NO NO. 966-C-2019 M/S PUNJAB STATE CORP. DEVELOPMENT SOCIETY LTD., CH ANDIGARH 7 ACTION OF THE ASSESSING OFFICER IN INVOKING THE PRO VISIONS OF SECTION 147 READ WITH SECTION 148 OF THE ACT. THIS GROUND OF THE ASSESSEE IS, THEREFORE, DISMISSE D. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 04.03.2021 SD/- SD/- ( ANNAPURNA GUPTA) (SANJA Y GARG ) ACCOUNTANT MEMBER JUD ICIAL MEMBER DATE: 04 /03/2021 SANTOSH (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE (+ $ BY ORDER, ; # ASSISTANT REGISTRAR