Bapooji Pattin Souharda Sahakari Niyamit , Bagalkot V. Income Tax officer Ward-1 , Bagalkot

MA 34/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2768 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 06-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KANNAN NARAYANAN BENGALURU
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN , ACCOUNTANT MEMBER MP NO.34/BANG/2020 [IN ITA 544 /B ANG /201 9 ] ASSESSMENT YEAR : 2013 - 14 M/S BAPOOJI PATTIN SOUHARDA SAHAKARI NIYAMIT, NO.7/8, SECTOR NO.25, NAVANAGAR, BAGALKOT. PAN: AAAAB 6930F VS. THE INCOME TAX OFFICER, WARD-1, BAGALKOT A P PLICANT RESPONDENT A PPLICANT BY : NONE RESPONDENT BY : SHRI KANNAN NARAYANAN, ADDL. CIT(DR)(ITAT), BENGALURU. DATE OF HE ARING : 06 . 11 .2020 DATE OF PRONOUNCEMENT : 23 . 1 1 .2020 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS IS A MISCELLANEOUS PETITION FILED BY THE AS SESSEE U/S 254(2) OF THE INCOME TAX ACT, 1961 (THE ACT) PRAYING FOR RECT IFICATION OF CERTAIN APPARENT ERRORS IN THE ORDER OF TRIBUNAL. 2. THE ISSUE THAT AROSE FOR CONSIDERATION BEFORE T HE TRIBUNAL WAS, AS TO WHETHER THE REVENUE AUTHORITIES WERE JUSTIFIED IN DENYING THE CLAIM OF THE ASSESSEE FOR REDUCTION U/S 80P(2)(A)(I) OF THE ACT. ORIGINALLY THE ISSUE HAD COME UP BEFORE THE TRIBUNAL AND THE TRIBUNAL I N ITA NO. 827/B/17 BY MP NO.34/BANG/2020 PAGE 2 OF 3 ITS ORDER DATED 31.10.2017 REMANDED THE MATTER BACK TO THE AO WITH A DIRECTION TO APPLY THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CITIZENS COOPERATIVE SOCIETY LTD IN CIVIL APPEAL NO . 10245/2017 DATED 08.08.2017. 3. IN THE REMAND PROCEEDINGS, THE AO CAME TO THE CO NCLUSION THAT THE ASSESSEE HAD ADMITTED NOMINAL MEMBERS AND PROVIDED CREDIT FACILITIES TO NOMINAL MEMBERS AND THEREFORE THE PRINCIPLE THE OF MUTUALITY WAS NOT SATISFIED. HE CAME TO THE CONCLUSION THAT AS PER TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF CITIZENS CO-OP SOCIETY (SUPRA ), IF THE PRINCIPLE OF MUTUALITY IS NOT SATISFIED, THEN THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. ACCORDINGLY THE AO CONFIRMED THE DISALLOWANCE OF DEDUCTION OF RS. 87,10,540/- CLAIM ED BY THE ASSESSEE. 4. ON AN APPEAL THE CIT (APPEALS) CONFIRMED THE ORD ER OF AO. 5. ON FURTHER APPEAL BY THE ASSESSEE BEFORE THE TRI BUNAL, THE ASSESSEE IN A VERY ELABORATE GROUNDS OF APPEAL HAS POINTED OUT THAT IT WAS A SOCIETY REGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 AND THEREFORE THE JUDGEMENT OF HONBLE SUPREME COUR T IN THE CASE OF CITIZENS CO-OPERATIVE SOCIETY (SUPRA) WAS NOT APPLICABLE TO IT. IT WAS ALSO CONTENDED THAT THE ASSESSEE DID NOT VIOLATE THE RUL ES OF THE KARNATAKA CO- OP SOCIETY ACT . THE TRIBUNAL DECIDED THE ISSUE VIDE PARA 4 OF ITS ORDER IN WHICH THE DISCUSSION IS ON THE PROVISIONS OF SEC 8 0P(2)(D) OF THE ACT, WHICH DECISION IS ON THE POINT WHETHER, INTEREST I NCOME IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(D) OF THE ACT. IT IS THE PLEA OF THE ASSESSEE THAT THE TRIBUNAL HAS NOT DECIDED THE ISSUE OF ELIGIBILITY O F DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. 6. AFTER PERUSAL OF THE ORDER OF TRIBUNAL DATED 04 .09.2019 AND HEARING THE LD. DR, WE ARE OF THE VIEW THAT THE ORDER OF TR IBUNAL SUFFERS FROM A MP NO.34/BANG/2020 PAGE 3 OF 3 MISTAKE APPARENT ON THE FACE OF RECORD INASMUCH AS THE ISSUE OF DEDUCTION U/S 80P(2)(A)(I) OF THE ACT WHICH WAS THE GRIEVANCE OF THE ASSESSEE BEFORE THE TRIBUNAL HAS NOT BEEN DISCUSSED AND DECIDED. ON THE OTHER HAND, THE TRIBUNAL HAS PROCEEDED ON THE ASSUMPTION THAT DEDUC TION IS ONE CLAIMED U/S 80P(2)(A)(I) OF THE ACT. IN THESE CIRCUMSTANCE S WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE ORDER OF TRIBUNAL D ATED 04.09.2019 PASSED BY THIS TRIBUNAL SHOULD BE RECALLED AND THE ISSUE RAIS ED BY THE ASSESSEE SHOULD BE ADJUDICATED AFRESH AFTER HEARING BOTH THE PARTIES. ACCORDINGLY REGISTRY IS DIRECTED TO FIX THE APPEAL FOR HEARING IN DUE COURSE AFTER NOTICE TO THE PARTIES. 7. IN THE RESULT, THE MISCELLANEOUS PETITION IS ALL OWED. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF NOVEMBER, 2020. SD/- SD/- ( B R BASKARAN ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE P RESIDENT BANGALORE, DATED, THE 23 RD NOVEMBER, 2020. / DESAI S MURTHY / COPY TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.