The ITO,Wd-2, Palakkad V. M/s.Polpully Service Co-op Bank Ltd, Palakkad

MA 107/COCH/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8841 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-01-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 16-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRITUNJAYA SHARMA
• Assessee Lawyers: D D SIVADAS
• Section: 80P; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM MA NO. 107 /COCH/201 9 : ASST.YEAR 2014 - 2015 (ARISING OUT OF ITA NO. 550 /COCH/201 8) THE INCOME TAX OFFICER WARD 2 PALAKKAD. VS. M/S.POLPULLY SERVICE CO - OPERATIVE BANK LIMITED, POLPULLY, PALAKKAD 678 552. PAN : AAEAT3354K. ( APPLICANT ) (RESPONDENT) APPLICANT BY : SRI.MRITUNJAYA SHARMA, SR.DR RESPONDENT BY : SRI.D.D.SIVADAS DATE OF HEARING : 10.01.2020 DATE OF PRONOUNCEMENT : 1 0 .01.2020 O R D E R PER GEORGE GEORGE K., JM THIS MISCELLANEOUS APPLICATION AT THE INSTANCE OF THE REVENUE IS SEEKING TO RECALL THE TRIBUNAL ORDER DATED 04.02 .2019 IN ITA NO. 550 /COCH/201 8 . 2. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IN THIS CASE IS A PRIMARY AGRICULTURAL CREDIT SOCIETY REGISTERED UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT, 1969. THE ASSESSEES CLAIM OF DEDUCTION U/S 80P OF THE IT.ACT WAS DENIED BY THE ASSESSING OFFICER BY TREATING THE ASSESSEE AS CO - OPERATIVE BANK AND NOT PRIMARY AGRICULTURAL CREDIT SOCIETY. 3. THE ASSESSEE AGGRIEVED BY THE DENIAL OF DEDUCTION U/S 80P OF THE I.T.ACT FILED APPEALS BEFORE THE FIRST APPELLATE AUTHORITY. THE FIRST APPELLATE AUTHORITY BY FOLLOWING THE M A NO. 107 / COCH /201 9 . M/S.POLPULLY SCB LTD. 2 JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. REPORTED IN 384 ITR 490 ALLOWED THE APPEALS OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO GRANT DEDUCTION U/S 80P(2) OF THE I.T.ACT AS THE ASSESSEE IS CLASSIFIED AS PRIMARY AGRICULTURAL CREDIT SOCIETY BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES. 4. ON FURTHER APPEALS BY THE REVENUE, THE VIEW TAKEN BY THE CIT(A) WAS CONFIRMED BY THE TRIBUNAL VIDE ITS ORDER DATED 04.02.2019 IN ITA NO.5 50 /COCH/2018. 5. THE REVENUE BEING AGGRIEVED BY THE ORDER OF THE TRIBUNAL DATED 04.02 .2019, HAS FILED THIS MISCELLANEOUS APPLICATION TO RECALL ITA NO. 550 /COCH/2018. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LARGER BENCH OF THE HONBLE KERALA HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LTD. V. CIT [ITA NO.97/2016 ORDER DATED 19 TH MARCH, 2019] HAS REVERSED DICTUM LAID DOWN BY THE HONBLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA). IT WAS STATED THAT THE FULL COURT OF THE HONBLE HIGH COURT HAD CATEGORICALLY HELD THAT CERTIFICATE CHARACTERIZING A CO - OPERATIVE SOCIETY AS PRIMARY AGRICULTURAL SOCIETY IS NOT A CONCLUSIVE PROOF BUT ACTIVITIES OF ASSESSEE HAS TO BE EXAMINED BY THE A.O. I N EACH ASSESSMENT YEARS TO DETERMINE WHETHER ASSESSEE IS CO - OPERATIVE SOCIETY OR CO - OPERATIVE BANK. IT WAS SUBMITTED THAT IN VIEW OF THE LARGER BENCH JUDGMENT OF THE HONBLE KERALA HIGH COURT THERE IS A MISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL DATED 0 4.02 .2019 AND THE SAME NEEDS TO BE RECTIFIED. THE LEARNED AR, HOWEVER, SUBMITTED THAT THERE IS NO M A NO. 107 / COCH /201 9 . M/S.POLPULLY SCB LTD. 3 MISTAKE APPARENT FROM RECORD SINCE AS ON THE DATE OF PASSING THE ORDER BY THE TRIBUNAL, THE LAW THAT WAS PREVAILING WAS THE LAW LAID DOWN BY THE HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA) . 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE FIRST APPELLATE AUTHORITY AND THE TRIBUNAL HAD ALLOWED THE CLAIM OF DEDUCT ION U/S 80P OF THE I.T.ACT BY FOLLOWING THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA). CERTAIN ISSUES DECIDED IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA) WAS REVERS ED BY THE LARGER BENCH OF THE HONBLE KERALA HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LTD. V. CIT (SUPRA). THE LARGER BENCH OF THE HONBLE KERALA HIGH COURT HAD HELD THAT EACH ASSESSMENT YEAR IS SEPARATE AND FOR EACH OF THE ASSESSME NT YEAR NECESSARILY AN INQUIRY HAS TO BE CONDUCTED BY THE A.O. INTO THE FACTUAL SITUATION WHETHER THE CO - OPERATIVE SOCIETIES ARE CARRYING ON THE ACTIVITIES IN ACCORDANCE WITH THE ACTIVITIES MENTIONED UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT, 1969. IT WA S HELD BY THE LARGER BENCH OF THE HONBLE KERALA HIGH COURT THAT THE CHARACTERIZATION OF A CO - OPERATIVE SOCIETY AS A PRIMARY AGRICULTURAL CREDIT SOCIETY WOULD NOT SUFFICE AND IN EACH OF THE ASSESSMENT YEAR THE ACTIVITIES OF ASSESSEES SHOULD BE EXAMINED TO DETERMINE WHETHER THEY WERE ACTUALLY A CO - OPERATIVE SOCIETY OR CO - OPERATIVE BANK. IN THE CIT(A)S ORDER AND THE TRIBUNALS ORDER, NO EXAMINATION OF THE ACTIVITIES OF THE ASSESSEE WAS CARRIED OUT. THE TRIBUNAL HAD DIRECTED TO GRANT DEDUCTION U/S 80P OF THE I.T.ACT BY MERELY PERUSING THE M A NO. 107 / COCH /201 9 . M/S.POLPULLY SCB LTD. 4 CERTIFICATE ISSUED BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES CHARACTERIZING THE ABOVE ASSESSEE AS A PRIMARY AGRICULTURAL CREDIT SOCIETY. 6.1 THE HONBLE KERALA HIGH COURT IN THE CASE OF KIL KOTAGIRI TEA & COFFEE ESTATES CO . LTD. V. ITAT REPORTED IN 174 ITR 579 HAD HELD THAT WHEN AN AUTHORITY HAS DECIDED ON THE BASIS OF A DECISION OF THE HIGH COURT WHICH IS SUBSEQUENTLY REVERSED, THERE WOULD BE A RECTIFIABLE MISTAKE COMING WITHIN THE SECTION 154 OF THE INCOME - TAX ACT. THE LA RGER BENCH OF THE HONBLE KERALA HIGH COURT HAS REVERSED THE DICTUM LAID DOWN BY THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA) BY HOLDING THAT THE ACTIVITIES OF THE ASSESSEE HAS TO BE EXAMINED TO DETERMINE WHETHER THE ASSESSEE IS CO - OPERATIVE SOCIETY OR CO - OPERATIVE BANK. IN THE LIGHT OF THE LARGER BENCH JUDGMENT OF THE HONBLE KERALA HIGH COURT, THE TRIBUNAL ORDER DATED 04.02 .2019 IN ITA NO.5 50 /COCH/2018, SUFFERS FROM A MISTAKE APPARENT ON REC ORD AND THE SAME NEEDS TO BE RECALLED. ACCORDINGLY THE ORDER OF THE TRIBUNAL DATED 04 .0 2 .2019 IS RECALLED AND THE SAME IS POSTED FOR HEARING ON 04.02.2020 . 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON THIS 10 TH DAY OF JANUARY, 2020 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN ; DATED : 10 TH JANUARY, 2020. DEV A DAS G * M A NO. 107 / COCH /201 9 . M/S.POLPULLY SCB LTD. 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, AR - ITAT - COCHIN 1. THE APPLICANT. 2. THE RESPONDENT. 3. THE CIT(A) - KOZHIKODE. 4. THE PR.CIT, KOZHIKKODE. 5. DR, ITAT, COCHIN 6 . GUARD FILE.