ITO, Kannur V. M/s.Kuttikkakam Service Co-op Bank Ltd, Kannur

MA 146/COCH/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8669 (ITAT-COCHIN)
• Duration Of Justice: 12 year(s) 1 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-11-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 29-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80P; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Chandra Poojari, AM & Shri George Mathan, JM MA No.138/Coch/2021 : Asst.Year 2009-2010 (Arising out of IT A No.123/Coch/2013) The Income Tax Officer, Ward – 2 Kannur. Vs. M/s.Pinarayi Service Co- operative Bank Limited Pinarayi, Thalassery Kannur – 670 307 PAN : AAABP0133D. (Applicant) (Respondent) MA No.148/Coch/2021 : Asst.Year 2007-2008 (Arising out of IT A No.509/Coch/2014) The Income Tax Officer, Ward – 2 Kannur. Vs. M/s.Tellicherry Town Service Co-operative Bank Limited, Thalassery Kannur – 670 101. PAN : AADFT0635K. (Applicant) (Respondent) MA No.145/Coch/2021 : Asst.Year 2009-2010 (Arising out of IT A No.158/Coch/2013) The Income Tax Officer, Ward – 2 Kannur. Vs. M/s.Vadakkumbad Service Co-operative Bank Limited, Thalassery Kannur – 670 109. PAN : AAFFV5935L. (Applicant) (Respondent) Applicant by : Smt.J.M.Jamuna Devi, DR Respondent by : Sri.V.P.Narayanan, Advocate MA No.139/Coch/2021 : Asst.Year 2009-2010 (Arising out of IT A No.161/Coch/2013) MA No.140/Coch/2021 : Asst.Year 2008-2009 (Arising out of IT A No.164/Coch/2014) MA No.141/Coch/2021 : Asst.Year 2007-2008 (Arising out of IT A No.165/Coch/2014) MA No.142/Coch/2021 : Asst.Year 2010-2011 (Arising out of IT A No.166/Coch/2014) MA No.138/Coch/2021 & Ors. M/s.Pinarayi Service Co-op. So.Ltd.& Anr. 2 The Income Tax Officer, Ward – 1 Kannur. Vs. M/s.Anjarakandy Farmers Service Co-operative Bank Limited P.O. Mambra Kannur – 670 611. PAN : AAAAA4245Q. (Applicant) (Respondent) Applicant by : Smt.J.M.Jamuna Devi, DR Respondent by : Sri.Shiva Prakash, Advocate MA No.143/Coch/2021 : Asst.Year 2010-2011 (Arising out of IT A No.529/Coch/2014) MA No.144/Coch/2021 : Asst.Year 2011-2012 (Arising out of IT A No.530/Coch/2014) The Income Tax Officer, Ward – 1(2) Kozhikode. Vs. M/s.Puthiyangadi Service Co- operative Bank Limited Puthiyangadi PO Kozhikode – 673 021. PAN : AACAP0749C. (Applicant) (Respondent) MA No.137/Coch/2021 : Asst.Year 2013-2014 (Arising out of IT A No.488/Coch/2017) The Income Tax Officer, Ward – 2 Kalpetta. Vs. M/s.Meenangadi Service Co- operative Bank Limited Meenangadi P.O. Wayanad – 673 591. PAN : AABAM3681M. (Applicant) (Respondent) MA No.146/Coch/2021 : Asst.Year 2008-2009 (Arising out of IT A No.800/Coch/2013) MA No.147/Coch/2021 : Asst.Year 2009-2010 (Arising out of IT A No.801/Coch/2013) The Income Tax Officer, Ward – 1 Kannur. Vs. M/s.Kuttikkakam Service Co- operative Bank Limited Venara, Kuttikkakam PO Kannur – 670 663. PAN : AAAAK4614M. (Applicant) (Respondent) Applicants by : Smt.J.M.Jamuna Devi, DR Respondents by : --- None --- MA No.138/Coch/2021 & Ors. M/s.Pinarayi Service Co-op. So.Ltd.& Anr. 3 Date of Hearing : 12.11.2021 Date of Pronouncement : 12 .11.2021 O R D E R Per Chandra Poojari (AM) These Miscellaneous Applications at the instance of the Department are directed against various orders of the Tribunal. 2. Common issue is raised in these miscellaneous applications, hence, they were heard on 12.11.2021 and are being disposed of by this consolidated order. 3. Brief facts of the case are as follow: The assessees are primary agricultural credit societies, registered under the Kerala Co-operative Societies Act, 1969. It is carrying on the business of banking / providing credit facilities to its members. For the assessment years under consideration, the Assessing Officer denied the claim of deduction u/s 80P of the I.T. Act for the reason that the assessees are primarily engaged in the business of banking and in view of section 80P(4) of the I.T.Act, the assessees are not entitled to deduction u/s 80P(2)(a)(i) / 80P(2)(d) of the Act. 4. Aggrieved by the assessment orders completed, the assessees preferred appeals to the first appellate authority. The CIT(A) upheld the view taken by the Assessing Officer. MA No.138/Coch/2021 & Ors. M/s.Pinarayi Service Co-op. So.Ltd.& Anr. 4 5. The ITAT confirmed the view taken by the Income Tax Authorities. The Revenue has filed these miscellaneous applications seeking to recall the orders of the Tribunal for confirming the CIT(A)’s order in granting benefit of deduction u/s 80P of the I.T. Act. 6. The learned Departmental Representative relied on the submissions and grounds raised in the miscellaneous applications, besides relying on Full Bench judgment of the Hon’ble Kerala High Court in the case of M/s.Mavilayi Service Co-op Bank in ITA No.97/2016 (judgment dated 19.03.2019). The learned AR submitted that there is no mistake apparent in the orders of the Tribunal, requiring the Tribunal to interfere with the same u/s 254(2) of the I.T.Act. 7. We have heard rival submissions and perused the material on record. In all these cases, The Tribunal by following the judgment of the Hon’ble jurisdictional High Court in the case of The Chirakkal Service Co-operative Bank & Others in ITA No.212 of 2013 (judgment dated 15 th February, 2016) decided the issue in favour of the assessee, by holding that assessee are primary agricultural credit societies, providing agricultural credit facilities to its members. The Tribunal further held that the assessees in these cases had made investments with sub-treasuries, district co-operative banks and other banks in the course of its business of banking / providing credit facilities to its members and the income should be assessed as income from business and not as income from other sources. Therefore, it was categorically concluded by the Tribunal that the MA No.138/Coch/2021 & Ors. M/s.Pinarayi Service Co-op. So.Ltd.& Anr. 5 assessees in these cases were entitled to the deduction u/s 80P(2)(a)(i) of the I.T. Act on the interest income received on such investments. 7.1 Further, the Full Bench judgment of the Hon’ble Kerala High Court in the case of M/s. Mavilayi Co-op Bank Ltd.(supra), relied on by the learned DR, has been reversed by the Hon’ble Apex Court in the case of Mavilayi Service Co- operative Bank Ltd. & Ors. v. CIT & Anr. Reported in (2021) 431 ITR 1 (SC) by deciding the issue in favour of the assessee. The Hon’ble Supreme Court held that even assuming that the assessee had dealings with non-members, the assessee is entitled to proportionate deduction u/s 80P of the I.T.Act. The Hon’ble Apex Court further held that expression “members” is not defined under the Income-tax Act. Therefore, it was held by the Hon’ble Apex Court that necessarily the expression “members” in section 80P of the I.T.Act has to be construed in the light of the expression as contained in the respective State Co-operative Societies Act. The Hon’ble Apex Court held that if associate / nominal members are treated as members under the State Co-operative Societies Act, there is no violation of the provisions under the State Co-operative Societies Act, and therefore, the assessee would be entitled to the benefit of deduction u/s 80P of the I.T. Act. In view of the foregoing reasons and the dictum laid down by the Hon’ble Apex Court in the case of M/s. Mavilayi Co-op Bank Ltd. (supra), the miscellaneous applications filed by the Revenue would not survive and the same are dismissed. MA No.138/Coch/2021 & Ors. M/s.Pinarayi Service Co-op. So.Ltd.& Anr. 6 8. In the result, the miscellaneous applications filed by the Revenue are dismissed. Order pronounced on this 12 th day of November, 2021. Sd/- Sd/- (George Mathan) (Chandra Poojari) JUDICIAL MEMBER ACCOUNTANT MEMBER Cochin ; Dated : 12 th November, 2021. Devadas G* Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Cochin 1. The Applicants. 2. The Respondent. 3. The CIT (Appeals). 4. The Pr.CIT. 5. DR, ITAT, Cochin 6. Guard file.