Maa Credit Co-Op. Soc. Ltd., Rajkot V. The ITO Ward-1 (1) (3), Rajkot

MA 11/RJT/2021

AI Insights

The case revolves around a Miscellaneous Application filed by Maa Credit Co-operative Society Limited against an order passed by the Income Tax Appellate Tribunal, Rajkot. The application contested the Tribunal's earlier decision which denied deductions under Section 80P(2)(a)(i) for interest income from Nationalised Banks. The assessee argued that the interest income should be considered under Section 80P(2)(b), citing various precedents and legislative changes post the Supreme Court's decision in Totgars Co-operative Sale Society Limited vs. ITO. However, the Tribunal dismissed the application, stating it was essentially seeking a review of the earlier decision, which was not the purpose of a Miscellaneous Application.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129860 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-10-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-10-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 29-09-2021
• Other Referred Cases: Totgars Co-operative Sale Society Limited vs. ITO, Honnali Credit Co-operative Society Limited vs. ITO, SBI Employees Co-op Credit Society, Chennai Properties case, S K Khanna
• Laws Referred To: Income Tax Act, 1981
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHISH KUMAR PANDEY
• Keywords: Business expenditure
• Section: 80P

Judgement Text

M.A. No.11/RJT/2021 Assessment Year: 2013-14 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted through E-Court at Ahmedabad) BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER M.A. No.11/RJT/2021 (In ITA No.169/RJT/2018 Assessment Year: 2013-14 Maa Credit Co-operative Society Limited, Shashtri Nagar (Ajmera), Nana Mava Road, Second Circle, Rajkot – 360 004. [PAN – AAFAS 0209 R] Vs. The Income Tax Officer, Ward – 1(1)(3), Rajkot. (Appellant) (Respondent) Assessee by Shri J.R. Mankodi, AR Revenue by Shri Ashish Kumar Pandey, Sr. DR Da te o f He a r in g 27.10.2023 Da te o f P ro n o u n ce m e n t 31.10.2023 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This Miscellaneous Application is filed by the assessee in respect of order dated 12.08.2021 passed by the Tribunal. 2. The Ld. AR submitted that after the decision of Hon’ble Supreme Court in case of Totgars Co-operative Sale Society Limited vs. ITO (2010) 188 Taxman 282 (SC) in respect of the issue relating to deduction under Section 80P of the Income Tax Act, 1981, many orders have been passed in favour of the assessee. The Ld. AR submitted that the Tribunal, Bangalore Bench in the case of Honnali Credit Co- operative Society Limited vs. ITO was discussed during the hearing and the same was argued that the interest in come from Bank should be considered as attributable to M.A. No.11/RJT/2021 Assessment Year: 2013-14 Page 2 of 4 main business of providing credit facilities to members. In conclusion of the hearing, the Tribunal without considering the orders simply stated that deduction under Section 80P(2)(a)(i) of the Act is not allowable from interest earned from National Bank. The Ld. AR submitted that when one differentiate between that earned from Nationalised Bank or that from Co-operative bank, the Section relevant is 80P(2)(b) and not 80P(2)(a)(i) of the Act and, therefore, the Ld. AR submitted that the same should have been taken into consideration by the Tribunal. Ld. AR also submitted following note dated 06.10.20123 at the time of hearing which is as under :- “Why MA filed ? ......apart from some errors as appellant has pointed out ...... The order has been passed w/o considering any of the Grounds of Appeal- i.e. w/o deliberating on why Totagr’s case is applicable, w/o considering the text of the section, w/o giving any analysis as per other ITAT decisions, AP & Telengana HC decision, w/o giving any rebuttal to Hon SC decision in Chennai Properties case, Hon ITAT Delhi decision in S K Khanna, w/o deliberating on contents of the CBDT clarificatory Circular 18/2015 which was issued after Totgar’s case, w/o opining on regulatory requirement to keep funds in FD to maintain liquidity ratio as per State Co-op Rules and so on. Decision of Gujarat HC in SBI Employees Co-op Credit Society is based and founded on Hon SC decision in Totagr’s case, so what is important is to analyse matters submitted to on sc. Analysis of Hon. SC decision in Totagr’s Co—operative SALE Society Limited. - Two activities ---- Extending credit facilities to members AND Marketing of Agriculture produce grown by its members - Deductions should have been claimed separately under (a)(i) AND a(iii) - Sale proceeds of agricultural produce of certain members’ was retained in general fund - No separate accounts were maintained for the above - Retained funds are shown separately as liability to members in Bal Sheet. Section 80P(2)(a)(i) does not say that the income has to be from the hands of members The “business operations” is a phrase showing collective outcome of different actions taken by a credit co-operative society engaged in money lending. M.A. No.11/RJT/2021 Assessment Year: 2013-14 Page 3 of 4 Admission free, savings by members share contribution, borrowing from other banks for providing credit facilities, receiving EMIs and lending and investing are integral limbs of credit/banking business. Attributable to Business ? - We are considering interest EXPENSE on bank finance obtained by credit society as part of business - We are also considering the interest expense on deposits of members as business expenditure.” The Ld. AR also sent an e-mail dated 27.10.2023 stating therein that appeal is not on Law Point. 3. The Ld. DR submitted that the assessee at this juncture is seeking review of the order dated 12.08.2021 passed by the Tribunal. 4. We have heard both the parties and perused all the relevant material available on record. The contentions of the Ld. AR as well as e-mail dated 27.10.2023 at this juncture cannot be entertained as the same amounts to review of the order dated 12.08.2021 passed by the Tribunal. The Ld. AR’s contention that the decision of the Tribunal is passed on the factual aspect as well as in consonance with the Hon’ble Apex Court decision in the case of Totgars Co-operative Sale Society Limited and, therefore, the same does not need interference by way of Miscellaneous Application. The present Miscellaneous Application therefore does not survive. 5. In the result, Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the open Court on this 31 st October, 2023. Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 31 st day of October, 2023 PBN/* M.A. No.11/RJT/2021 Assessment Year: 2013-14 Page 4 of 4 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Rajkot Bench, Rajkot