M/s. Bantwal Catholic Credit Co-Operative Society Limited , Mangaluru V. Income-Tax Officer, Ward-2(3), Mangalore

MA 18/BANG/2023

AI Insights

The case involves M/s. Bantwal Catholic Credit Co-operative Society Ltd., the appellant, seeking clarifications on the implementation of a Tribunal order regarding disallowances made under sections 194A(3)(v) and 80P of the Income Tax Act. The Tribunal had previously directed a re-verification of the interest income from cooperative societies, which was not adequately followed by the assessing officer. The main contention was whether the interest income from certain cooperative societies should be exempt from tax deduction at source under section 194A(3)(v) when considering the provisions of section 80P(2)(a)(i). The Tribunal's decision emphasized the need for a thorough re-verification and adherence to procedural fairness in the assessment process.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124498 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 04-01-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80P; 194A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P. No. 18/Bang/2023 (in ITA No. 122/Bang/2022) Assessment Year : 2017-18 M/s. Bantwal Catholic Credit Co-operative Society Ltd., Royal Complex, Opp. Corporation Bank Jodumarga, B.C. Road, Bantwal, Mangaluru – 574 219. PAN: AAATB4436H Vs. The Income Tax Officer, Ward – 2 (3), Mangalore. APPELLANT RESPONDENT Assessee by : Shri Balram R Rao, Advocate Revenue by : Shri B.R. Ramesh, Addl. CIT (DR) Date of Hearing : 19-05-2023 Date of Pronouncement : 19-05-2023 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present MP is filed by assessee against the order dated 15.06.2022 passed by this Tribunal seeking certain clarifications. The Ld.AR has filed the order seeking effect passed by the Ld.AO dated 26.09.2022. 2. He submitted that the Ld.AO while giving effect to the order passed by this Tribunal dated 15.06.2022 has observed in respect of ground no. 6 adjudicated by this Tribunal as under: Page 2 of 4 M.P. No. 18/Bang/2023 (in ITA No. 122/Bang/2022) “4. However, it is seen that the ITAT in its Order dated 15/06/2022. at Para No: 9 stated that " Ground no.6 is raised by assessee in respect of the disallowance made u/s. 194A(3)(v) of the Act." Further at Para No.9.5 of the Order the ITAT has stated that " It is submitted that most of the institutions from where interest have been received are co-operative societies which has not been verified by the Ld.AO before disallowing the said amount. Therefore in the interest of justice, we direct this issue to be re-verified by the LcI,A0 to identify the interest that has been received by the assessee from a co-operative society (other than a co-operative bank) for the amount to be excluded from the applicability of provisions of section 194A." Accordingly, the ITAT has stated that ground nos.6 & 7 stands allowed for statistical purpose. 4.1 The Clause (v) of the sub-section (3) of Section 194A provides that a co-operative society is not required to deduct tax at source. if the interest is paid or credited to the members of the society or any other co-operative society. However. as per the Assessment Order dated 28/12/2019. it is noticed that there is no disallowance made u/s. 194A(3)(v) of the IT Act. 5. As verified from the ITAT Order dated 15/06/2022. the ground nos: 6 & 7 raised by you before the ITAT were regarding that the authorities were not justified in making an inference of sections 194A(3)(v) and 80P(4) of the IT Act respectively. Further, out of the 9 grounds of appeal raised by you before the ITAT. it is seen that you have not made any objections regarding the issue that during the assessment proceedings the AO had wrongly considered the interest income earned from Samaja Seva Sahakari Bank. which is a co-operative society. as interest received from a co-operative bank and disallowed the same.” 3. The Ld.AR has submitted that the assessing officer while disallowing 80P(4) has relied on the provisions of section 194A(3)(v) and the Ld.CIT(A) has drawn an inference that the claim of assessee u/s. 80P(2)(a)(i) cannot be allowed relying on the provisions of section 194A(3)(v). The Ld.AR submitted that before this Tribunal, ground no. 6 was raised not because there was a disallowance u/s. 194A(3)(v) but was only stating that it is not applicable to co-operative societies. He submitted that the Page 3 of 4 M.P. No. 18/Bang/2023 (in ITA No. 122/Bang/2022) directions of this Tribunal has not been followed by the Ld.AO by carrying out necessary verification for the reason that there was no disallowance made u/s. 194A(3)(v). The Ld.AR is thus seeking a clarification in respect of the same as the details of the banks with which assessee had invested its funds against which interest income was received includes certain co-operative societies for which the claim of exemption cannot be denied u/s. 80P(2)(a)(i)/80P(2)(d). The Ld.DR on the contrary relied on the orders passed by authorities below. 4. We have perused the submissions and has also considered the OGE passed by the Ld.AO on 26.09.2022. We have also considered the observations of this Tribunal and the arguments recorded in paras 9.1-9.5. Considering the requirement of the Ld.AO to carry out necessary verification, we modify para 9.5 to read as under: “9.5 It is submitted that most of the institutions from where interest have been received are co-operative societies which has not been verified by the Ld.AO before disallowing the said amount. Therefore in the interest of justice, we direct this issue to be re-verified by the Ld.AO to identify the interest that has been received by the assessee from a co-operative society (other than a co-operative bank) for the amount to be excluded for the purposes of disallowance u/s. 80P r.w. 194A in accordance with law. Page 4 of 4 M.P. No. 18/Bang/2023 (in ITA No. 122/Bang/2022) Needless to say that proper opportunity of being heard must be granted to assessee. Accordingly, ground nos. 6 & 7 stands allowed for statistical purposes.” 5. The rest of the contents of order dated 15/06/2022 passed by this Tribunal shall remain unchanged. In the result, the M.P. filed by the assessee stands allowed. Order pronounced in open court on 19 th May, 2023. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 19 th May, 2023. /MS / Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, ITAT, Bangalore