The Assistant Commissioner of Income Tax, Chennai V. TAMILNADU COOPERATIVE STATE AGRICULTURE AND RURAL DEVELOPMENT BANK LIMITED, CHENNAI

MA 159/CHNY/2022

AI Insights

The case revolves around a dispute concerning the eligibility of Tamilnadu Co-operative State Agriculture and Rural Development Bank Limited for a deduction under section 80P(2) of the Income Tax Act, 1961. Initially, the Tribunal's order mistakenly recorded that the assessee was not engaged in banking and eligible for the deduction, based on an incorrect interpretation of the assessment order by the Assessing Officer (AO). The Revenue filed a miscellaneous application to correct this error, leading to the current proceedings. The Tribunal acknowledged the mistake and corrected the record, affirming the AO's finding that the assessee is engaged in banking activities.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134887 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-02-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 16-11-2022
• Other Referred Cases: Mavilayi Cooperative Society Ltd case
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: FILING APPEAL BEFORE HONBLE MADRAS
• Assessee Lawyers: SREE LAKSHMI VALLI

Judgement Text

आयकर अपीलीय अिधकरण, ‘डी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ एवं ᮰ी जी. मंजुनाथ, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER िविवध यािचका सं / M.A. No.159/CHNY/2022 (arising in I.T.A. No. 33/CHNY/2021) िनधाᭅरण वषᭅ / Assessment Year : 2017-18 The DCIT, Non-Corporate Circle 7(1), Chenai. v. Tamilnadu Co-operative State Agriculture and Rural Development Bank Limited, No.181, Luz Church Road, Mylapore, Chennai – 600 004. PAN: AABAT 7344J (अपीलाथᱮ / Applicant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से /Applicant by : Shri AR.V. Sreenivasan, Addl.CIT ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Ms. Sree Lakshmi Valli, Advocate सुनवाई कᳱ तारीख/ Date of hearing : 17.02.2023 घोषणा कᳱ तारीख /Date of Pronouncement : 24.02.2023 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: By way of this miscellaneous application, the Revenue has requested amendment of order passed by Tribunal in ITA No.33/CHNY/2021 dated 29.04.2022 in para 29. 2 M.A No.159/CHNY/2022 2. At the time of hearing, the ld. Senior DR took us through para 29 of the Tribunal’s order, wherein the Tribunal wrongly assumed the fact that the AO while framing assessment u/s.143(3) of the Act for the relevant assessment year 2017-18 vide order dated 25.12.2019 accepted that the assessee is a cooperative society not engaged in any banking business and therefore eligible for claim of deduction u/s.80P(2) of the Act. The ld. Senior DR stated that actually the AO held that the assessee is engaged in banking business and therefore, not eligible for claim of deduction. 3. In reply, the ld.counsel for the assessee filed memo of appeal filed u/s.260A of the Act by Revenue by filing appeal before Hon’ble Madras High Court in this very year 2017-18 against Tribunal order, wherein the very issue is raised and she drew our attention to para ‘j’ which reads as under:- “j) The Tribunal arrived at a wrong finding in Para 29 of its order by stating that in the order passed u/s.143(3), dated 25.12.2019, for the AY 2017-18, the department had accepted that the Assessee is a cooperative society and it is not engaged in any banking business and therefore eligible for claim of deduction u/s.80P(2) and that the department had followed the decision of the Supreme Court in the case Mavilayi Cooperative Society Ltd case. But on a perusal of Assessment order, nowhere the AO has made a mention to the above effect while completing the Assessment while disallowed the claim of deduction u/s.80P(2), therefore the Tribunal had arrived at a perverse findings which is contrary to the facts on record.” 3 M.A No.159/CHNY/2022 The ld.counsel stated that this issue has been admitted by Hon’ble Madras High Court vide order dated 09.12.2022 in T.C.A No.372 to 374 of 2022 and this miscellaneous application was filed before Tribunal on 17.11.2022. She stated that the Revenue filed this petition on 16.09.2022 and further that miscellaneous application was filed before Tribunal. However, the ld.counsel stated that in case the result is not changed, she has no objection in amending the order to that effect. 4. After hearing rival contentions, we noted that in the assessment order for assessment year 2017-18 dated 25.12.2019, the AO has categorically recorded finding of fact that the assessee carries on the business of banking and the relevant fact recorded in para 3 as under:- “3. That they are a credit society offering loans to its “members” and does not carry on the business of banking as defined in section 5(b) of the Banking Regulation Act, 1949. Section 5(b) of the Banking Regulation act defies banking as “banking” means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.” We noted that to the effect of assessee co-operative society held by AO to be in the banking business, there crept in mistake in the order of Tribunal in para 29 and we, expunge the finding recorded in para 29 4 M.A No.159/CHNY/2022 but in any case, as regards to other merits of the case, expunging of para 29 will have no bearing on the result of appeal on this very issue. Hence, to that extent, the miscellaneous application of Revenue is allowed. 5. In the result, the miscellaneous application of the Revenue is allowed. Order pronounced in the open court on 24 th February, 2023 at Chennai Sd/- Sd/- (मनोज कुमार अᮕवाल) (MANOJ KUMAR AGGARWAL) लेखा सद᭭य/ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 24 th February, 2023 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Applicant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ(अपील)/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.