Shree Ram Co.-Op. Credit Society Ltd., Dahod V. The Income Tax Officer, Ward-1, Dahod

MA 155/AHD/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6551 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 01-09-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R R MAKWANA
• Keywords: Business income; Rectification of order; Earning of tax free income; Question of law
• Section: 14A; 80P; 254(2); 64; 194A; 72; 56; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMB ER SHREE RAM CO-OP. CREDIT SOCIETY LTD. CHAKALIYA ROAD, DAHOD PAN: AAGAS4007N (APPELLANT) VS THE ITO, WARD-1, DAHOD (RESPONDENT) REVENUE BY: SHRI R.R. MAKWANA, SR. D.R. ASSESSEE BY: MS. URVASHI SHODHAN, A .R. DATE OF HEARING : 02-07-2021 DATE OF PRONOUNCEMENT : 07-09-202 1 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- BY WAY OF THIS MISCELLANEOUS APPLICATION, THE ASSE SSEE IS SEEKING RECALLING OF THE ORDER DATED 30 TH JANUARY, 2020. THE ASSESSEE HAS MAINLY SUBMITTED IN THE MISCELLANEOUS APPLICATION THAT TH ERE IS AN ERROR APPARENT IN DISMISSING THE APPEAL FILED BY THE ASSESSEE IN NOT GRANTING DEDUCTION OF INTEREST OF RS. 1,66,385/- EARNED FROM CO-OPERATIVE BANK CLAIMED U/S. 80P(2)(D) OF THE ACT. THE ASSESSEE HAS SUBMITTED T HAT DEDUCTION OUGHT TO HAVE BEEN GRANTED AS PER THE JUDGMENT OF HONBLE JU RISDICTIONAL HIGH COURT M.A. NO. 155/AHD/2020 (IN ITA NO. 98 /AHD/2017) ASSESSMENT YEAR 2013-14 M.A. NO. 155/AHD/2020 (IN I.T.A NO. 98/AHD/2017) A.Y. 2013-14 PAGE NO SHREE RAM CO-OP. CREDIT SOCIETY LTD. VS. ITO 2 IN THE CASE OF CIT-II VS. SABARKANTA DISTRICT CO-OP ERATIVE MILK LTD. IN TAX APPEAL NO. 473 OF 2014. 2. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. IN THIS REGARD, WE CONSIDER THAT SPECIFIC FACTS AND JUDICIA L FINDING REFERRED BY THE ASSESSEE HAS BEEN CONSIDERED BY THE ITAT WHILE ADJU DICATING IMPUGNED ISSUE. THE RELEVANT FINDING ON THIS ISSUE OF THE ITAT IS REPRODUCED AS UNDER:- 8. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HA S PLACED RELIANCE UPON THE DECISION OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF CIT-II VS. SAB ARKANTHA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD. VIDE TAX APPEAL NO. 473 OF 2014. WE HAVE PERUSED THE ABOVE REFERRED DECISION OF THE HON'BLE HIGH COURT OF GUJARAT WHERE THE ORDER OF TH E ITAT VIDE ITA NO. 2613/AHD/2012 DATED 27-09-2013 OF UPHOLDING THE ORDER OF THE CIT(A) IN DELETING THE DISALLOWANCE OF RS. 1,42,19,515/- UNDER SECTION 80P(2)(D) WAS SUSTAINED. WE HAVE PERUSED THE ORDER OF ITAT A HMEDABAD VIDE ITA NO. 2613/AHD/2012 FOR ASSESSMENT YEAR 2009-10 AGAIN ST WHICH THE REVENUE HAS PREFERRED APPEAL BEFORE THE HON'BLE HIGH COURT OF GUJARAT WITH SUBST ANTIAL QUESTION OF LAW 'WHETHER THE APPELLATE TRIBUNAL HAS SUBSTANTIALLY ERRED IN UPHOLDING THE O RDER OF CIT(A) IN DELETING THE DISALLOWANCE OF RS. 1,42,19,515/- U/S. 80P(2)(D) OF THE ACT.' THE CASE LAWS RELIED UPON BY THE ASSSESSARE DISTING UISHABLE ON FACTS AND ARE OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE. IN THE CASE OF SABARK ANTHA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION RELIED UPON THE BY THE ASSESSEE AS REFERRED A BOVE THE ISSUE INVOLVED WAS PERTAINING TO DISALLOWANCE OF EXPENDITURE U/S. 14A OF THE ACT . IN THAT CASE, THE ASSESSING OFFICER HAS DISALLOWE D 50% OF THE EXPENDITURE CLAIMED BY THE ASSESSEE ON T HE REASON THAT INTEREST EXPENSES INCURRED BY THE ASSSESSEE ON BORROWED FUNDS MIGHT HAVE BEEN USE D FOR THE PURPOSE OF MAKING INVESTMENT FOR EARNING EXEMPT INCOME U/S. 80P(2)(D) OF THE ACT. IN THAT CASE, BEFORE THE LD. CIT(A) THE ASSESSEE'S SUBMISSION WAS THAT THEY ARE HAVING SUFFICIENT FUND S OF RS. 50.19 CRORES AS ON 31-03-2009 IN THE FORM OF CAPITAL OF RS. 10.19 CRORE AND RESERVES AND SURPLUS OF RS. 40 CRORE AGAINST THE DEPOSIT MADE WITH THE CO-OP SOCIETIES OF RS. 36.28 CRORE ON LY. THEREFORE, LD. CIT(A) HAS DELETED THE DISALLOWANCE. CONSIDERING THE ABOVE FACT ON THE ISS UE OF DISALLOWANCE OF EXPENSES U/S. 14A OF THE ACT THE ITAT HAS HELD THAT ASSESSEE WAS HAVING MIXED F UNDS AND THE INTEREST FUNDS WERE MORE THAN MAHALAXMI CREDIT CO-OP. SOCIETY LTD. VS. ITO INVESTMENT IN CO-OPERATIVE BANK AND COOPERATIVE SOCIETIES NO DISALLOWANCE WAS CALLED FO R FROM ELIGIBLE DEDUCTION U/S. 80P(2)(D) OF THE ACT. IT IS CLEAR FROM THE DECISION OF THE HON'BLE J URISDICTIONAL HIGH COURT IN THE CASE LAWS CITED BY THE ASSESSEE VIDE ITA NO. 473 OF 2014 IS PERTAINED TO THE THE FACT AND ISSUE OF DISALLOWANCE OF CLAIM OF DEDUCTION U/S. 80P(2)(D) ON THE BASIS OF A TTRACTING PROVISION OF SECTION 14A OF THE ACT AS NARRATED ABOVE AS PER THE ORDER OF ITAT VIDE ITA NO .2613/AHD/2012 DATED 27.09.2013 IN THE CASE OF ACIT VS. SABARKANTHA DISTRICT CO - OPERATIVE MILK PRODUCERS UNION LTD. ON THE OTHER HAND, THE ISSUE INVOLVED IN THIS CASE OF THE ASSESSEE IS CLAI M OF DEDUCTION OF INTEREST INCOME U/S. 80P(2)(D) OF THE ACT EARNED ON IDLE FUNDS PLACED WITH CO-OPERATI VE BANK. HOWEVER, ON THE ISSUE OF EARNING SIMILAR NATURE OF INTEREST FROM THE COMMERCIAL BANK THE JURISDICTIONAL HON'BLE HIGH COURT IN THE CASE OF SBI VS. CIT (2016) 72 TAXMAN.COM 64 HAS HELD THAT INTEREST INC OME ON DEPOSIT PLACED WITH THE COMMERCIAL BANK IS NOT ENTITLED FOR DEDUCTION U /S. 80P(2)(A)(I) OF THE ACT. IN THE LIGHT OF THE ABOVE, WE ARE OF THE VIEW THAT THE INCOME BY WAY OF INTEREST EARNED BY DEPOSIT OF IDLE FUND DOES NOT CHANGE ITS CHARACTER IRRESPECTIVE OF THE FACT W HETHER SUCH INCOME OF INTEREST IS EARNED FROM A M.A. NO. 155/AHD/2020 (IN I.T.A NO. 98/AHD/2017) A.Y. 2013-14 PAGE NO SHREE RAM CO-OP. CREDIT SOCIETY LTD. VS. ITO 3 SCHEDULE BANK OR A CO- OPERATIVE BANK. THE IDENTICA L ISSUE ON THE SIMILAR FACTS HAS BEEN ADJUDICATED BY THE CO-ORDINATE BENCH OF THE ITAT AF TER CONSIDERING THE DECISION OF HON'BLE HIGH COURT OF KARNATKA IN THE CASE OF PR. CIT S. TATAGAR S CO-OPERATIVE SALE SOCIETY (2017) 83 TAXMAN.COM 140 (KARNATAKA) DATED 16TH JUNE, 2017. O N THE SAME PROPOSITION THE CO-ORDINATE BENCH OF THE ITAT VIDE ITA NOS. 1992/AHD/2017, 1313 /AHD/2018, 1314/AHD/2018, 1295/AHD/2018 & 1296/AHD/2018 DATED 29/08/2018 IN THE CASES OF TH E NARSANDA ME RC ANT I L E CO. OP. CRE DI T SOC IE T Y LT D., THE SANT TAL UK A TE AC HE RS CO- OP. CRE DI T SOC I E TY LT D. , THE SAT Y APRAK ASH CO-OP. CRE DI T SOC I ET Y LT D. , SHRI FRI E NDS C O-OP. CRE DI T SOC I E TY LT D. AND SHRI SHRAMJ I V I NAGRI K SAHAK ARI MANDL I LT D. HAS ADJUDICATED THE IDENTICAL ISSUE ON SIMILAR FACT AND HELD THAT EARNING OF INTEREST INCOME EITHER FROM NATIONALIZED OR CO-OPERATIVE BANK IS NOT ENTITLED FOR DEDUCTION U/S. 80P(2)(D) OF THE ACT. THE RELEVANT P ART OF DECISION OF CO-ORDINATE BENCH IS REPRODUCED AS UNDER:- '7. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD CAREFULLY. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING CR EDIT FACILITIES TO ITS MEMBERS. THE ASSESSING OFFICER HAS NOTICED THAT IN ADDITION TO T HE INTEREST INCOME EARNED ON LOAN AND ADVANCES TO ITS MEMBERS, THE ASSESSE HAS CLAIMED DE DUCTION U/S. 80P(2)(A)(I) OF THE ACT ON INTEREST INCOME EARNED FROM FIXED DEPOSIT MAINTAINE D WITH THE COMMERCIAL BANK AND COOPERATIVE BANKS. AS PER SECTION 80P(2)(A)(I) OF THE ACT THE INTEREST INCOME EARNED ON PROVIDING CREDIT FACILITY TO ITS MEMBERS IS DEDUCTI BLE U/S. 80P(2)(A)(I) OF THE ACT. AFTER PERUSAL OF THE AFORESAID PROVISION OF THE ACT WE OB SERVE THAT DEDUCTION U/S 80P(2)(A)(I) IS NOT AVAILABLE ON THE INTEREST EARNED ON DEPOSIT MAI NTAINED WITH THE COMMERCIAL BANK. WE FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE REVENUE VIDE STATE BANK OF INDIA VS. CIT (2016) 72 TAXMANN.COM 64 (GUJARAT) WHEREIN IT IS HELD THAT INTEREST INCOME ON DEPOSIT PLACED WITH THE COMMERCIAL BANKS IS NOT EXEMPT U/S. 80P(2)(A)(I) OF THE ACT. IN RESPECT OF THE CLAIM OF THE LD. COUNSEL THAT INTEREST EARNED FROM INVESTMENT OF SURPLUS FUNDS WITH THE CO OPERATIVE BANK IS ENTITLED FOR DEDUCTION U/S 80P(2)(D) OF THE ACT WE HAVE NOTICED THAT AS PER SECTION 80P(2)(D) OF THE ACT, THE WHOLE OF INTEREST AND DIVIDEND INCOME DERI VED BY A CO-OPERATIVE SOCIETY FROM ITS INVESTMENT IN ANY OTHER CO- OPERATIVE SOCIETY IS DE DUCTIBLE U/S. 80P(2)(D). WE FIND THAT THE HON'BLE HIGH COURT OF KARNATAKA, IN THE CASE OF (20 17) 83 TAXMANN.COM 140 (KAR) PRINCIPAL CIT VS. TATAGARS CO - OPERATIVE SALE SOCIETY ON IDENTICAL ISSUE AND FAC TS HAS HELD THAT IT IS ONLY PRIMARY AGRICULTURAL CREDIT SO CIETY WITH ITS LIMITED WORK OF PROVIDING CREDIT FACILITIES TO ITS MEMBER WHICH IS GOVERNED B Y AMBIT AND SCOPE OF DEDUCTION U/S. 80P AND FURTHER STATED THAT INTEREST INCOME EARNED FROM SURPLUS DEPOSIT WITH CO-OPERATIVE BANK IS NOT ENTITLED FOR DEDUCTION 80P(2)(D). THE R ELEVANT PART OF THE DECISION OF THE HON'BLE HIGH COURT OF KARNATAKA, IN THE CASE OF (20 17) 83 TAXMANN.COM 140 (KAR) PRINCIPAL CIT VS. TATAGARS CO-OPERATIVE SALE SOCIET Y ON IDENTICAL ISSUE AND FACTS IS REPRODUCED AS UNDER:- 'ADMITTEDLY AND UNDOUBTEDLY, THE ASSESSEE IS A CO-O PERATIVE SOCIETY ENGAGED MAINLY IN THE ACTIVITY OF MARKETING OF AGRICULTURAL PRODUCES GROWN BY ITS MEMBERS. THE ASSESSEE CO- OPERATIVE SOCIETY ALSO ACCEPTS DEPOSITS FROM ITS ME MBERS AND PROVIDES CREDIT FACILITY TO ITS MEMBERS, RUNS MAHALAXMI CREDIT CO-OP. SOCIETY LTD. VS. ITO KIRANA STORES, RICE MILLS, LIVE STOCKS, VAN SECTION, MEDICAL SHOPS, LODGING, P LYING AND HIRING OF GOODS CARRIAGE, ETC. [PARA 10] THE ASSESSMENT YEARS INVOLVED IN THE INST ANT APPEALS ARE ASSESSMENT YEARS 2007-08 TO 2011-12. THE BONE OF CONTENTION IS THAT THE DEDUCTION UNDER SECTION 80P(2) IS NOW CLAIMED BY THE ASSESSEE UNDER SECTION 80P(2)(D) AND NOT UNDER SECTION 80P(2)(A) OF THE ACT. THE REASON IS THAT NOW THE INVESTMENTS AND DEPOSITS AFTER THE SUPREME COURT'S DECISION AGAINST THE ASSESSEE IN TOTGAR'S CO-OPERAT IVE SALE SOCIETY LTD. V. ITO [2010] 322 ITR 283/188 TAXMAN 282 (SC), THE ASSESSEE HEREI N HAS SHIFTED THE DEPOSITS AND INVESTMENTS FROM SCHEDULE BANKS TO CO- OPERATIVE BA NK AND SUCH CO-OPERATIVE BANK IS ESSENTIALLY A CO-OPERATIVE SOCIETY ALSO AND CLAUSE (D) ALLOWS DEDUCTION OF INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY THE ASSESSEE CO -OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO-OPERATIVE SOCIETY. [PARA 11] THE SHEET ANCHOR OF THE CONTENTION OF THE M.A. NO. 155/AHD/2020 (IN I.T.A NO. 98/AHD/2017) A.Y. 2013-14 PAGE NO SHREE RAM CO-OP. CREDIT SOCIETY LTD. VS. ITO 4 ASSESSEE MISSES TWO ESSENTIAL POINTS REQUIRED FOR C LAIMING THE DEDUCTION FROM GROSS TOTAL INCOME FOR A CO-OPERATIVE SOCIETY; (I) THAT THE CHA RACTER OR NATURE OF INCOME, NAMELY INTEREST ON INVESTMENTS OR DEPOSITS, DOES NOT CHANG E IRRESPECTIVE OF THE FACT WHETHER IT IS EARNED OR RECEIVED FROM A SCHEDULE BANK OR CO-OPERA TIVE BANK, (II) THAT WHAT THE SUPREME COURT HELD IN THE CASE OF THE ASSESSEE ITSE LF, AGAINST ASSESSEE, WAS THAT SUCH INTEREST INCOME ON ITS SURPLUS AND IDLE FUNDS NOT I MMEDIATELY REQUIRED FOR ITS BUSINESS, IS NOT INCOME FROM BUSINESS TAXABLE UNDER SECTION 28 OF THE ACT, BUT WAS TAXABLE AS 'INCOME FROM OTHER SOURCES' UNDER SECTION 56 , WHEREAS FOR AVAILING THE EXEMPTION OR 100 PER CEN T DEDUCTION UNDER SECTION 80P , THE INCOME IS SPECIFIED IN CLAUSES (A) TO (F) OF SUB SECTION (2) OF SECTION 80P WHICH SHOULD BE ITS BUSINESS OR OPERATIONAL INCOME . [PARA 12] WHAT SECTION 80P(2)(D) WHICH WAS THOUGH NOT SPECIFICALLY ARGUED AND CANVA SSED BEFORE THE SUPREME COURT, ENVISAGES IS THAT SUCH INTEREST OR DIVIDEND EARNED BY AN ASSESSEE CO- OPERATIVE SOCIETY SHOULD BE OUT OF THE INVESTMENTS WITH ANY OTHER CO-OPERATIVE SOCIETY. THE WORDS 'CO- OPERATIVE BANKS' ARE MISSING IN CLAU SE (D) OF SUB SECTION (2) OF SECTION 80P . EVEN THOUGH A COOPERATIVE BANK MAY HAVE THE CORPO RATE BODY OR SKELETON OF A CO- OPERATIVE SOCIETY BUT ITS BUSINESS IS ENTIRELY DIFF ERENT AND THAT IS THE BANKING BUSINESS, WHICH IS GOVERNED AND REGULATED BY THE PROVISIONS O F THE BANKING REGULATION ACT , 1949. ONLY THE PRIMARY AGRICULTURAL CREDIT SOCIETY WITH T HEIR LIMITED WORK OF PROVIDING CREDIT FACILITY TO ITS MEMBERS CONTINUED TO BE GOVERNED BY THE AMBIT AND SCOPE OF DEDUCTION UNDER SECTION 80P OF THE ACT. [PARA 13] THE BANKING BUSINESS, EVEN T HOUGH RUN BY A CO- OPERATIVE BANK IS SOUGHT TO BE EXCLUDED FROM THE BE NEFICIAL PROVISIONS OF EXEMPTION OR DEDUCTION UNDER SECTION 80P OF THE ACT. THE PURPOSE OF BRINGING ON THE STATUTE BOOK SUB- SECTION (4) IN SECTION 80P WAS TO EXCLUDE THE APPLICABILITY OF SECTION 80P ALTOGETHER TO ANY CO-OPERATIVE BANK AND TO EXCLUDE THE NORMAL BAN KING BUSINESS INCOME FROM SUCH EXEMPTION/DEDUCTION CATEGORY. THE WORDS USED IN SEC TION 80P(4) ARE SIGNIFICANT. THEY ARE: 'THE PROVISIONS OF THIS SECTION SHALL NOT APPL Y IN RELATION TO ANY CO- OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY... .............' THE WORDS 'IN RELATION TO' CAN INCLUDE WITHIN ITS AMBIT AND SCOPE EVEN THE INTERES T INCOME EARNED BY THE ASSESSEE, A CO- OPERATIVE SOCIETY FROM A CO-OPERATIVE BANK. THIS EX CLUSION BY SECTION 80P(4) EVEN THOUGH WITHOUT ANY AMENDMENT IN SECTION 80P(2)(D) IS SUFFICIENT TO DENY THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80P(2)(D) . THE ONLY EXCEPTION IS THAT OF A PRIMARY AGRICULTURAL CREDIT SOCIETY. THE DEPOSITORY KANARA DISTRICT CENTRAL BANK LIMITED IN THE PRESENT CASE IS ADMITTEDLY NOT SUCH A PRIMARY AGRIC ULTURAL CREDIT SOCIETY. [PARA 14] THE AMENDMENT OF SECTION 194A(3)(V) EXCLUDING THE CO-OPERATIVE BANKS FROM THE DEFINITI ON OF 'CO-OPERATIVE SOCIETY' BY FINANCE ACT , 2015 AND REQUIRING THEM TO DEDUCT TAX AT SOURCE UNDER SECTION 194A ALSO MAKES THE LEGISLATIVE INTENT CLEAR THAT THE C O-OPERATIVE BANKS ARE NOT THAT SPECIE OF GENUS CO-OPERATIVE SOCIETY, WHIC H WOULD BE ENTITLED TO EXEMPTION OR DEDUCTION UNDER THE SPECIAL PROVISIONS OF CHAPTER V IA IN THE FORM OF SECTION 80P OF THE ACT. [PARA 15] MAHALAXMI CREDIT CO-OP. SOCIETY LTD. VS. ITO IF THE LEGISLATIVE INTENT IS SO CLEAR, THEN IT CANNOT BE CONTENDED THAT THE OMISSIO N TO AMEND CLAUSE (D) OF SECTION 80P(2) OF THE ACT AT THE SAME TIME IS FATAL TO THE CONTEN TION RAISED BY THE REVENUE BEFORE THIS COURT AND SUB SILENTIO, THE DEDUCTION SHOULD C ONTINUE IN RESPECT OF INTEREST INCOME EARNED FROM THE CO-OPERATVE BANK, EVEN THOUGH THE S UPREME COURT'S DECISION IN THE CASE OF ASSESSEE ITSELF IS OTHERWISE. [PARA 16] AS STATE D ABOVE, IT IS THE CHARACTER AND NATURE OF INCOME WHICH DETERMINES ITS TAXABILITY OR EXEMPTION FROM TAXABILITY. IT IS NEEDLESS TO SAY THAT THE PROVISIONS RELATING TO EXEMPTION AND DEDUC TION NEED TO BE STRICTLY CONSTRUED AND NO LIBERAL INTERPRETATION OR INTENDMENT CAN BE INFE RRED IN SUCH PROVISIONS. WHAT WAS CLEARLY HELD TO BE NOT EXEMPT AND NOT DEDUCTIBLE UN DER SECTION 80P(2)(A) BY THE SUPREME COURT IN THE CASE OF ASSESSEE, CANNOT BE CONTRARILY HELD AS EXEMPTED AND DEDUCTIBLE NOW FOR THESE YEARS, MERELY BECAUSE THE DEPOSITORY BANK , WITH WHOM THE INVESTMENTS WERE MADE BY THE ASSESSEE HAPPENS TO BE A CO-OPERATIVE B ANK. ONE CANNOT APPRECIATE THIS DISTINCTION SO AS NOT TO APPLY THE BINDING PRECEDEN T OF THE SUPREME COURT FOR SUBSEQUENT YEARS MERELY ON ACCOUNT OF THE CHANGE OF THE BANK W HERE SUCH DEPOSITS WERE MADE BY THE ASSESSEE, ALL OTHER FACTS REMAINING THE SAME, PARTI CULARLY THE NATURE AND CHARACTER OF THE M.A. NO. 155/AHD/2020 (IN I.T.A NO. 98/AHD/2017) A.Y. 2013-14 PAGE NO SHREE RAM CO-OP. CREDIT SOCIETY LTD. VS. ITO 5 INCOME EARNED BY IT. THE INTEREST INCOME OF ASSESSE E CONTINUES TO BE NOT ATTRIBUTABLE TO ITS BUSINESS OPERATIONS EVEN IN THESE SUBSEQUENT YEARS. [PARA 17] THE CHARACTER OF INCOME DEPENDS UPON THE NATURE OF ACTIVITY FOR EARNING THA T INCOME AND THOUGH ON THE FACE OF IT, THE SAME MAY APPEAR TO BE FALLING IN ANY OF THE SPE CIFIED CLAUSES OF SECTION 80P(2) OF THE ACT, BUT ON A DEEPER ANALYSIS OF THE FACTS, IT MAY BECOME INELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2) OF THE ACT. HENCE, THE INCOME BY WAY OF INTEREST E ARNED BY DEPOSIT OR INVESTMENT OF IDLE OR SURPLUS FUNDS DOES NOT CHA NGE ITS CHARACTER IRRESPECTIVE OF THE FACT WHETHER SUCH INCOME OF INTEREST IS EARNED FROM A SCHEDULED BANK OR A CO-OPERATIVE BANK AND, THUS, CLAUSE (D) OF SECTION 80P(2) OF THE ACT WOULD NOT APPLY IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. THE PERSON OR BO DY CORPORATE FROM WHICH SUCH INTEREST INCOME IS RECEIVED WILL NOT CHANGE ITS CHA RACTER, VIZ. INTEREST INCOME NOT ARISING FROM ITS BUSINESS OPERATIONS, WHICH MADE IT INELIGI BLE FOR DEDUCTION UNDER SECTION 80P OF THE ACT. [PARA 23] IN VIEW OF THE AFORESAID, THE AP PEAL FILED BY THE REVENUE DESERVES TO BE ALLOWED.:' [PARA 24] IN THE LIGHT OF THE ABOVE FACT S AND LEGAL FINDINGS WE CONSIDER THAT THE INCOME BY WAY OF INTEREST EARNED BY DEPOSIT OR INVESTMENT OF IDLE OR SURPLUS DOES NOT CHANGE ITS CHARACTER IRRESPECTIVE OF THE FACT WHETH ER SUCH INCOME OF INTEREST IS EARNED FROM A SCHEDULE BANK OR A CO-OPERATIVE BANK AND THU S CLAUSE (D) OF SECTION 80P(2) OF THE ACT WOULD NOT APPLY IN THE FACTS AND THE CIRCUMSTAN CES OF THE PRESENT CASE. THE ASSESSEE HAS EARNED INTEREST INCOME ON SURPLUS FUNDS DEPOSIT ED WITH NATIONALIZED BANK AND THE COOPERATIVE BANK AND THE SAME IS NOT ATTRIBUTABLE T O BUSINESS OPERATION OF THE ASSESSEE CO-OPERATIVE SOCIETY AS INTEREST EARNED ON THE FUND INVESTED WITH THE COMMERCIAL BANK IS NOT OPERATIONAL INCOME FROM PROVIDING CREDIT FACILI TIES TO ITS MEMBERS. WE CONSIDER THAT EARNING OF SUCH INTEREST INCOME EITHER FROM NATIONA LIZED OR COOPERATIVE BANK WILL NOT CHANGE NATURE AND CHARACTER OF THE INCOME. ON PERUS AL OF THE PROVISION OF SECTION WE OBSERVE SUCH DEDUCTION IS PERTINENT TO THE OPERATIO NAL INCOME EARNED BY THE CO-OPERATIVE SOCIETY FROM THE ACTIVITIES IN WHICH IT IS ENGAGED AND NOT THE OTHER INCOME WHICH ACCRUES TO THE SOCIETY IN THE FORM OF INTEREST FROM INVESTM ENT OF SURPLUS FUNDS WITH THE COOPERATIVE BANK. AFTER CONSIDERING THE FACTS AND LEGAL FINDING , WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE, THEREFORE, THE SAME IS DISMISSED. HOWEVER AS DECIDED IN THE VARIOUS DECISION OF THE CO-ORDINATE BENCHES OF ITAT AHMEDAB AD WE DIRECT THE ASSESSING OFFICER TO ALLOW PRO RATA EXPENSES IN RESPECT OF INTEREST E ARNED FROM DEPOSIT HELD WITH NATIONALIZED BANK TO THE ASSESSEE FOR COMPUTING THE DEDUCTION U/S. 80P AFTER EXAMINING/VERIFICATION AND AFFORDING ADEQUATE OPPOR TUNITY TO THE ASSESSEE. THEREFORE, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATIS TICAL PURPOSES.' IN THE LIGHT OF THE FACTS/FINDINGS NARRATED IN PARA NO. 8 OF THIS ORDER AFTER TAKING INTO CONSIDERATIO N THE DECISION OF THE CO-ORDINATE BENCH ON THE SIMILA R ISSUE ON IDENTICAL FACTS AS MAHALAXMI CREDIT CO-OP. SOCIETY LTD. VS. ITO REPORTED SUPRA , WE DO NOT FIND ANY MERIT IN THE A PPEAL OF THE ASSESSEE, THEREFORE, THE SAME IS DISMISSED.' RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH AS CITED ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD. CIT(A). THEREFORE, THE APPEAL OF THE ASSESSEE IS DISMISSED. IT IS PERTINENT FROM THE BRIEFLY REPORTED FINDING T HAT IT WAS A VERY LONG ADJUDICATED ORDER PASSED AFTER TAKING INTO CONSIDER ATION ACTUAL FACTS DISTINGUISHABLE FROM THE FACTS IN THE CASE OF THE L AW REFERRED BY THE ASSESSEE. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES, WE CON SIDER THAT POWER OF RECTIFICATION U/S. 254(2) OF THE ACT CAN BE EXERCIS ED ONLY WHEN THE MISTAKE M.A. NO. 155/AHD/2020 (IN I.T.A NO. 98/AHD/2017) A.Y. 2013-14 PAGE NO SHREE RAM CO-OP. CREDIT SOCIETY LTD. VS. ITO 6 WHICH IS SAID TO BE RECTIFIED IS AN OBVIOUS PATENT MISTAKE WHICH IS APPARENT FROM RECORD AND NOT A MISTAKE WHICH IS REQUIRED TO BE ESTABLISHED BY ARGUMENT AND LONG DRAWN PROCESS OF REASONING ON POI NTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. HOWEVER, THE QUESTION OF RECTIFICATION OF MISTAKE C ANNOT BE ENTERTAINED UNTIL AND UNLESS THE MISCELLANEOUS PETI TION FILED BY THE ASSESSEE IS FOUND TO BE MAINTAINABLE. IN THE CASE OF ASSESSE E THIS MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS BEYOND THE PER IOD OF SIX MONTHS FROM THE DATE OF PASSING OF THIS ORDER OF THE ITAT ON 30 TH JANUARY, 2020 AND THEREFORE THE SAME IS BARRED BY LIMITATION. THE MISCELLANEOUS PETITION SEEKING RECTIFICATION OF ANY MISTAKE APPARENT FROM RECORD C AN BE FILED BY EITHER SIDE WITHIN A PERIOD OF SIX MONTHS FROM THE END OF MONTH FOR WHICH THE ORDER WAS PASSED. IN THE PRESENT CASE, THE ORDER WAS PASSED ON 30 TH JANUARY, 2020, THEREFORE, THE LIMITATION FOR FILING OF MISCELLANEO US PETITION U/S. 254(2) STARTS FROM 1 ST FEB, 2020 TO 31 ST JULY, 2020. HOWEVER, THE MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE ASSESSEE ON 1 ST SEP, 2020 IN SPITE OF THE FACT THAT AS PER RECORD THE ORDER OF THE ITAT DATED 30 TH JAN, 2020 WAS RECEIVED BY THE ASSESSEE ON 19 TH FEB, 2020. THEREFORE, THE MISCELLANEOUS PETITION HAS NOT BEEN FILED WITHIN THE TIME LIMIT P RESCRIBED UNDER THE PROVISION OF SECTION 254(2) OF THE ACT. IT IS FURTHER NOTICED THAT THE APPEAL OF THE ASSESS EE WAS NOT ADJUDICATED EX-PARTE VIDE ORDER DATED 30 TH JANUARY, 2020 OF THE ITAT, THEREFORE, THERE IS NO BREACH OF RULE 24 OF THE ITAT. IN THIS REGARD, WE ALSO PLACED RELIANCE ON THE DECISION OF ITAT PUNE VIDE M.A. 38/PUN/2017 (AR ISING OUT OF ITA NO. 923/PUN/2011) A.Y. 2003-04. THE RELEVANT PART OF T HE FINDINGS OF THE ITAT IS REPRODUCED AS UNDER:- M.A. NO. 155/AHD/2020 (IN I.T.A NO. 98/AHD/2017) A.Y. 2013-14 PAGE NO SHREE RAM CO-OP. CREDIT SOCIETY LTD. VS. ITO 7 4. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENT ATIVES OF RIVAL SIDES. THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE ASSESSEE U/S. 254 (2) OF THE ACT SEEKING RECTIFICATION IN THE ORDER OF TRIBUNAL DATED 29-07-2016. THE PROVISIONS OF SECTION 254(2) HAVE BEEN AMENDED BY THE FINANCE ACT , 2016 W.E.F. 01-06-2016. THE AMENDED PROVISIONS OF SUB- SECTION (2) OF SECTION 254 READS AS UNDER : 'THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN [SI X MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PASSED], WITH A VIEW TO RECTIFYING AN Y MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB- MA NO. 38/PUN/2017, A.Y. 2003-04 SECTION (1), AND S HALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE [ASSES SING] OFFICER.' A BARE PERUSAL OF AMENDED PROVISIONS SHOW THAT THE MISCELLANEOUS APPLICATION SEEKING RECTIFICATION OF ANY MISTAKE APPARENT FROM RECORD C AN BE FILED BY EITHER SIDE WITHIN A PERIOD OF SIX MONTHS FROM THE END OF MONTH IN WHICH THE ORDER WAS PASSED. IN THE PRESENT CASE, THE ORDER WAS PASSED ON 29-07-2016, THEREFORE, THE LIMITATION FOR FILING OF MISCELLANEOUS APPLICATION U/S. 254(2) STARTS FROM 1ST AUGUST, 2016 AND THE LIMITATION END S ON 31ST JANUARY, 2017. THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE ASSESSEE/APPLICAN T ON 08-05-2017. THEREFORE, THIS MISCELLANEOUS APPLICATION HAS BEEN FILED WITH THE DELAY OF 97 DAY S AND HENCE, IS BARRED BY LIMITATION. THE TRIBUNAL HAS NO POWER TO CONDONE THE DELAY IN FILIN G OF MISCELLANEOUS APPLICATION UNDER PROVISIONS OF SECTION 254(2) OF THE ACT. 5. THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF RAJA MALWINDER SINGH VS. UNION OF INDIA & ANR. REPORTED AS 278 ITR 568 HAS HELD THAT THE TRIBUNAL HAS NO JURISDICTION TO AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1) OF SECTION 254 AFTER THE EXPIRY OF PRESCRIBED TIME LIMIT, WHETHER IT IS ON ITS OWN VOLITION OR ON AN APPLICAT ION BEING MADE BY THE ASSESSEE OR THE ASSESSING OFFICER. SIMILAR VIEW HAS BEEN TAKEN BY THE DELHI BENCH OF T RIBUNAL IN THE CASE OF RAHUL JEE & CO. (P) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX REPOR TED AS 120 ITD 481 AND SEVERAL OTHER DECISIONS BY VARIOUS BENCHES OF THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELI ANCE ON THE DECISION OF HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF DISTRICT CENTRAL CO- OP. BANK LTD. VS. UNION OF INDIA (SUPRA). WE FIND THAT THE FACTS IN THE SAID CASE ARE DISTING UISHABLE. IN THE SAID CASE THE ORDER OF TRIBUNAL WAS PASSED MA NO. 38/PUN/2017, A.Y. 2003-04 BEFORE AMENDMENT OF SECTION 254(2) BY THE FINANCE ACT 2016. THE TRIBUNAL REJECTED APPLICATION OF THE ASS ESSEE U/S. 254(2) BY APPLYING AMENDED PROVISIONS. THE HON'BLE HIGH COURT ALLOWING THE PETITION OF ASSESSEE HELD THAT THE NEW LAW OF LIMITATION PROVIDING A SHORTER PERIOD CANNOT BE APPLIED RETROSPECTIVELY. IT IS NOT THE CASE OF ASSESSEE THAT THE TRIBUNAL ORDER SOUGHT TO BE RECTI FIED IS PASSED PRIOR TO AMENDMENT. THUS, THE CASE LAW ON WHICH THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE DOES NOT SUPPORT THE CAUSE OF ASSESSEE. 7. THE TRIBUNAL CANNOT GO INTO THE REASONS/MERITS F OR FILING OF MISCELLANEOUS APPLICATION, AS THE MISCELLANEOUS APPLICATION OF THE ASSESSEE SUFFERS F ROM LIMITATION, HENCE, THE SAME IS DISMISSED. 8. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE ASSESSEE IS DISMISSED. IN THE LIGHT OF THE FACTS AND FINDINGS, WE HOLD THA T THE MISCELLANEOUS PETITION OF THE ASSESSEE IS BEYOND THE PERIOD OF LI MITATION AS PROVIDED U/S. M.A. NO. 155/AHD/2020 (IN I.T.A NO. 98/AHD/2017) A.Y. 2013-14 PAGE NO SHREE RAM CO-OP. CREDIT SOCIETY LTD. VS. ITO 8 254(2) IS NOT MAINTAINABLE. ACCORDINGLY, THE SAME IS DISMISSED BEING BARRED BY LIMITATION 3. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY ASSESSEE IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 07-09-2021 SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 07/09/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,