Karnataka Vikas Grameena Bank V. The Joint Commissioner of Income Tax Range-2

ITA/100045/2018

AI Insights

The case involves Karnataka Vikas Grameena Bank, represented by its General Manager, Sri. I.G. Kumaragoud, as the appellant, and the Joint Commissioner of Income Tax, Range-2, Hubli, as the respondent. The appeal was filed under Section 260A of the Income Tax Act, challenging the findings of the Income Tax Appellate Tribunal, Bangalore Bench 'A', concerning the assessment years 2009-10 and 2010-11. The primary legal issues revolved around the appellant's eligibility for deductions under Section 36(1)(viia) and the correct classification of the appellant as a Co-operative Society rather than an Association of Persons (AOP), which affects the applicability of Section 80P(4). The High Court of Karnataka, after considering a similar case (ITA No.100007/2020), decided to remit the matter back to the Tribunal for a detailed examination of the newly raised substantial questions of law.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 810716 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 03-06-2024
• Assessment Year: misc
• Other Referred Cases: ITA No.100007/2020
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M TIRUMALESH
• Assessee Lawyers: A SHANKAR
• Keywords: Association of Persons; Co-operative Society; Deduction; Income tax appeal; Remand
• Section: 260A; 80P(4); 36(1)(viia)

Judgement Text

" - 1 - NC: 2024:KHC-D:7303-DB ITA No.100045 of 2018 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 3RD DAY OF JUNE, 2024 PRESENT THE HON'BLE MR JUSTICE S G PANDIT AND THE HON'BLE MR JUSTICE G BASAVARAJA INCOME TAX APPEAL NO.100045 OF 2018 BETWEEN: KARNATAKA VIKAS GRAMEENA BANK R/BY ITS GENERAL MANAGER SRI. I.G. KUMARAGOUD, HO, CTS NO.52/B1/A1/DH NO.133A, HO BUILDING, BELGAUM ROAD, D.N. KOPPA, DHARWAD-580008, PAN: AAAAK6324Q. …APPELLANT (BY SRI. A. SHANKAR, SENIOR COUNSEL FOR SRI. SHASHANK S. HEGDE, ADVOCATE) AND: THE JOINT COMMISSIONER OF INCOME TAX RANGE-2, C.R. BUILDING, HUBBALLI-DHARWAD ROAD, NAVANAGAR, HUBLI-580025. …RESPONDENT (BY SRI. M. TIRUMALESH, ADVOCATE) THIS ITA IS FILED U/SEC.260A OF THE INCOME-TAX ACT 1961, PRAYING TO, ALLOW THE APPEAL AND SET ASIDE THE FINDINGS THEREIN TO THE EXTENT AGAINST THE APPELLANT IN THE ORDER PASSED BY THE HON’BLE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH “A” BANGALORE IN ITA NO. 673 AND 674/Bang/2014 AND ITA NO.684/Bang/2014 VIDE COMMON ORDER DATED 25.04.2018 RELATING TO THE ASSESSMENT YEAR 2009-10 AND 2010-11 RESPECTIVELY (VIDE ANNEXURE-A). THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, S G PANDIT, J., DELIVERED THE FOLLOWING: JAGADISH T R Digitally signed by JAGADISH T R Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - NC: 2024:KHC-D:7303-DB ITA No.100045 of 2018 JUDGMENT Learned Senior Counsel, Sri. A.Shankar for Sri. Shashank S.Hegde, learned counsel for the appellant, would seek leave to withdraw the above appeal insofar as impugned order bearing No. ITA 673/BANG/2014 passed by the Income Tax Appellate Tribunal, Bengaluru Bench ‘A’. A memo is also filed to that effect. The memo is placed on record. 2. The above appeal insofar as impugned order in ITA 673/BANG/2014 dated 25.04.2018 is dismissed as withdrawn. 3. Heard Sri. A.Shankar, learned Senior Counsel, for the appellant and Sri. M.Tirumalesh, learned counsel for the respondent-revenue. 4. This appeal was admitted to consider the following substantial question of law: \"Whether the Tribunal committed an error of law in not allowing the claim of the appellant in respect of deduction under Section 36(1)(viia) of the Income Tax Act?” Subsequently, appellant has filed a memo, dated 30.05.2024, raising additional substantial questions of law - 3 - NC: 2024:KHC-D:7303-DB ITA No.100045 of 2018 numbering as 39(a) and 39(b) enclosing the judgment dated 11.10.2023 passed by this Court in ITA No.100007/2020. The additional substantial questions of law numbered as 39(a) and 39(b) read as under: “39(a) Whether the authorities below failed to appreciate that the appellant is a Co-operative Society being a Rural Regional Bank and consequently not hit by the prohibition under Section 80P(4) of the Act, on the facts and circumstances of the case. 39(b) Whether the authorities below were justified in assessing the appellant as an Association of Persons (AOP) when the appellant ought to have been assessed as a Co-operative Society and consequently the order passed in the wrong status is required to be set aside as bad in law, on the facts and circumstances of the case.” 5. Learned Senior Counsel for the appellant would submit that the substantial questions of law raised at No.39(a) and 39(b) were not considered by the Tribunal which requires consideration. Further, learned Senior Counsel would refer to the judgment 11.10.2023 in ITA - 4 - NC: 2024:KHC-D:7303-DB ITA No.100045 of 2018 No.100007/2020 passed by this Court in identical fact-situation. In terms of the said judgment, he prays for remanding the matter to the Tribunal keeping open the questions on which the appeal was admitted. 6. Learned counsel for the respondent-revenue would submit that the said contention was not urged before the Tribunal and as such, there is no merit in the appeal and the same is liable to be dismissed. 7. Perused the judgment of this Court in ITA No.100007/2020 referred to by the learned Senior counsel for the appellant. A co-ordinate Bench of this Court, in identical fact-situation, has allowed the said appeal and remitted the matter back to the Tribunal for considering the substantial question of law Nos.(v) and (vi) raised therein, which are similar to the additional substantial questions of law raised in this appeal extract above as 39(a) and 39(b). In view of the same, the present appeal also requires to be allowed in terms of the judgment dated 11.10.2023 passed in ITA No.100007/2020. Hence the following: - 5 - NC: 2024:KHC-D:7303-DB ITA No.100045 of 2018 ORDER i) The appeal is hereby allowed. ii) The impugned order dated 25.04.2018 passed in ITA No.674/Bang/2014 in relation to the Assessment Year 2010-11 on the file of the Income Tax Appellate Tribunal, Bangalore Bench ‘A’, is hereby set aside. iii) Matter is remitted back to the Tribunal for consideration of the issue at Nos.39(a) & 39(b) referred to supra, in accordance with law. Liberty is reserved in favour of the appellant to raise and urge the substantial question of law Nos.39(a) & 39(b) as referred to supra, if the need so arises at a later stage. Sd/- JUDGE Sd/- JUDGE KMS, CT:VP LIST NO.: 1 SL NO.: 26 "