The iTO, Wd-5, Palakkad, Palakkad V. Peringottukurissi Service Co-op Bank Ltd, Palakkad

MA 43/COCH/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8687 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-07-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-07-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 17-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: ORS MS KU; AMALJIT P J M A NO S COCH
• Section: 80P; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM M A NO. 42 /COCH/201 9 : A.Y 2013 - 2014 (ARISING OUT OF ITA NO.467/COCH/2018) THE INCOME TAX OFFICER WARD 5 PALAKKAD. VS. M/S.KUTHANUR SERVICE CO - OPERATIVE BANK LTD. KUTHANNUR P.O. PALAKKAD 678 721. PAN : AAAAK1516G. ( APPLICANT ) (RESPONDENT) M A NO. 43 /COCH/201 9 : A.Y 2013 - 2014 (ARISING OUT OF ITA NO.468/COCH/2018) THE INCOME TAX OFFICER WARD 5 PALAKKAD. VS. M/S.PERINGOTTUKURISSI SERVICE CO - OPERATIVE BANK LTD. NO.P.519, PARUTHIPULLY PO PALAKKAD 678 573. PAN : AADAT9601J. ( APPLICANT ) (RESPONDENT) M A NO. 44 /COCH/201 9 : A.Y . 2010 - 2011 (ARISING OUT OF ITA NO.469/COCH/2018) M A NO. 45 /COCH/201 9 : A.Y 2013 - 2014 (ARISING OUT OF ITA NO.470/COCH/2018) THE INCOME TAX OFFICER WARD 5 PALAKKAD. VS. M/S. VADAKKENCHERY SERVICE CO - OPERATIVE BANK LTD. NO. F.1219 , VADAKKENCHERY PO PALAKKAD 679 552. PAN : AAEFV0382N . ( APPLICANT ) (RESPONDENT) APPLICANT BY : SMT.A.S.BINDHU, SR.DR. RESPONDENT BY : SRI.AMALJIT P.J. M A NO S . 42 /COCH /201 9 & ORS . M/S. KUTHANUR SCB LTD & ORS . 2 DATE OF HEARING : 1 2 .07.2019 DATE OF PRONOUNCEMENT : 15.07. 2019 O R D E R PER GEORGE GEORGE K, JM : THESE MISCELLANEOUS APPLICATIONS AT THE INSTANCE OF THE REVENUE IS SEEKING FOR RECALLING THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 29.11.2018. 2 . BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEES IN THESE CASES ARE PRIMARY AGRICULTURAL CREDIT SOCIETIES REGISTERED UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT, 1969. THE AS SESSEES CLAIM OF DEDUCTION U/S 80P OF THE IT.ACT WAS DENIED BY THE ASSESSING OFFICER BY TREATING THE ASSESSEE AS CO - OPERATIVE BANKS AND NOT PRIMARY AGRICULTURAL CREDIT SOCIETIES. 3. THE ASSESSEES AGGRIEVED BY THE DENIAL OF DEDUCTION U/S 80P OF THE I.T .ACT FILED APPEALS BEFORE THE FIRST APPELLATE AUTHORITY. T HE FIRST APPELLATE AUTHORITY BY FOLLOWING THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. REPORTED IN 384 ITR 490 ALLOWED THE APPEALS OF THE ASS ESSEES AND DIRECTED THE ASSESSING OF F ICER TO GRANT DEDUCTION U/S 80P(2) OF THE I.T.ACT AS THE ASSESSEES ARE CLASSIFIED AS PRIMARY AGRICULTURAL CREDIT SOCIETIES BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES. M A NO S . 42 /COCH /201 9 & ORS . M/S. KUTHANUR SCB LTD & ORS . 3 4. ON FURTHER APPEAL S BY THE REVENUE, THE VIEW TAKEN BY THE CIT(A) WAS CONFIRMED BY THE TRIBUNAL IN ITS CONSOLIDATED ORDER DATED 29.11.2018 . 5. THE REVENUE BEING AGGRIEVED BY THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 29.11.2018 , HAS FILED THESE MISCELLANEOUS APPLICATIONS. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LARGER BENCH OF THE HONBLE KERALA HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LTD. V. CIT [ITA NO.97/2016 ORDER DATED 19 TH MARCH, 2019] HA S REVERSED DICTUM LAID DOWN BY THE H ONBLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA). IT WAS ST A TED THAT THE FULL COURT OF THE HONBLE HIGH COURT HAD CATEGORICALLY HELD THAT CERTIFICATE CHARACTERIZING A CO - OPERATIVE SOCIETY AS PRIMARY AGRICULTURAL SOCIETY IS NOT A CONCLUSIVE PROOF BUT ACTIVITIES OF ASSESSEE HAS TO BE EXAMINED BY THE A.O. IN EACH ASSE SSMENT YEARS TO DETERMINE WHETHER ASESSEES ARE CO - OPERATIVE SOCIETIES OR CO - OPERATIVE BANKS. IT WAS SUBMITTED THAT IN VIEW OF THE LARGER BENCH JUDGMENT OF THE HONBLE KERALA HIGH COURT THERE IS A MISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL DATED 29.11.2 018 AND THE SAME NEEDS TO BE RECTIFIED . THE LEARNED AR, HOWEVER, SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RECORD SINCE AS ON THE DATE OF PASSING THE ORDER BY THE TRIBUNAL, THE LAW THAT WAS PREVAILING WAS THE LAW LAID DOWN BY THE HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA) . FURTHER IT WAS SUBMITTED THAT THE MISCELLANEOUS APPLICATIONS IN THESE CASES IS FILED ON 17 TH MAY, 2019, I.E., IN THE FAG END OF THE LIMITATION M A NO S . 42 /COCH /201 9 & ORS . M/S. KUTHANUR SCB LTD & ORS . 4 PERIOD OF SIX MONTHS MENTIONED U /S 254(2) O F THE I.T.ACT AND HENCE SAME NEED TO BE DISMISSED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THESE CASES, THE FIRST APPELLATE AUTHORITY AND THE TRIBUNAL HAD ALLOWED THE CLAIM OF DEDUCTION U/S 80P OF THE I.T.A CT BY FOLLOWING THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA). C ERTAIN ISSUES DECIDED IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA) WAS REVERSED BY THE LARGER BENCH OF THE HONBLE KERALA HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LTD. V. CIT (SUPRA). THE LARGER BENCH OF THE HONBLE KERALA HIGH COURT HAD HELD THAT EACH ASSESSMENT YEAR IS SEPARATE AND FOR EACH OF TH E ASSESSMENT YEAR NECESSARILY AN INQUIRY HAS TO BE CONDUCTED BY THE A.O. INTO THE FACTUAL SITUATION WHETHER THE CO - OPERATIVE SOCIETIES ARE CARRYING ON THE ACTIVITIES IN ACCORDANCE WITH THE ACTIVITIES MENTIONED UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT, 1 969. IT WAS HELD BY THE LARGER BENCH OF THE HONBLE KERALA HIGH COURT THAT THE CHARACTERIZATION OF A CO - OPERATIVE SOCIETY AS A PRIMARY AGRICULTURAL CREDIT SOCIETY WOULD NOT SUFFICE AND IN EACH OF THE ASSESSMENT YEAR THE ACTIVITIES OF ASSESSEES SHOULD BE E XAMINED TO DETERMINE WHETHER THEY WERE ACTUALLY A CO - OPERATIVE SOCIETY OR CO - OPERATIVE BANK. IN THE CIT(A)S ORDER AND THE TRIBUNALS ORDER NO EXAMINATION OF THE ACTIVITIES OF THE ASSESSEES WAS CARRIED OUT. THE TRIBUNA L HAD DIRECTED TO GRANT DEDUCTION U/S 80P OF THE I.T.ACT BY MERELY PERUSING THE CERTIFICATE ISSUED BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES CHARACTERIZING THE ABOVE M A NO S . 42 /COCH /201 9 & ORS . M/S. KUTHANUR SCB LTD & ORS . 5 ASSESSEES AS CO - OPERATIVE SOCIETIES AS PRIMARY AGRICULTURAL CREDIT SOCIETIES. 6.1 THE HONBLE KERALA HIGH COURT IN THE CASE OF KIL KOTAGIRI TEA & COFFEE ESTATES CO. LTD. V. ITAT REPORTED IN 174 ITR 579 HAD HELD THAT WHEN AN AUTHORITY HAS DECIDED ON THE BASIS OF A DECISION OF THE HIGH COURT WHICH IS SUBSEQUENTLY REVERSED, THERE WOULD BE A RECTIFIABLE MISTAKE COMING WITHIN THE SECTION 154 OF THE INCOME - TAX ACT . T HE LARGER BENCH OF THE HONBLE KERALA HIGH COURT HAS REVERSED THE DICTUM LAID DOWN BY THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA) BY HOLDING THAT THE ACTI VITIES OF THE ASSESSEE HAS TO BE EXAMINED TO DETERMINE WHETHER THE ASSESSEES ARE CO - OPERATIVE SOCIETIES OR CO - OPERATIVE BANKS. IN THE LIGHT OF THE LARGER BENCH JUDGMENT OF THE HONBLE KERALA HIGH COURT, THE TRIBUNAL ORDER DATED 29.11.2018, SUFFERS FROM A MISTAKE APPARENT ON RECORD AND THE SAME NEEDS TO BE RECALLED. 6.2 T HE CONTENTIONS OF THE ASSESSEES THAT THESE RECTIFICATION APPLICATIONS HAVE NOT BEEN FILED WITHIN A REASONABLE DATE AND HENCE BARRED BY LIMITATION IS LEGALLY UNTENABLE. THE ORDER OF THE TR IBUNAL IS DATED 29.11.2018 AND THE MISCELLANEOUS APPLICATIONS HAVE BEEN FILED WITHIN SIX MONTHS FROM THE DATE OF RECEIPT OF THE TRI BUNAL ORDER BY THE COMMISSIONER. THE HONBLE SUPREME COURT IN THE CASE OF SREE AYYANAR SPINNING AND WEAVING MILLS LTD. V. CIT [(2008) 301 ITR 434 (SC)] HAD CATEGORICALLY HELD THAT IT WOULD BE SUFFICIENT THAT A MISCELLANEOUS APPLICATION IS FILED WITHIN THE PERIOD MENTIONED U/S 254(2) OF THE I.T.ACT AND THE SAME NEED NOT BE DISPOSED OFF M A NO S . 42 /COCH /201 9 & ORS . M/S. KUTHANUR SCB LTD & ORS . 6 WITHIN THE TIME LIMIT MENTIONED. THE DEPARTMENT CANNOT BE FAULTED FOR THE DELAY IN DISPOSAL OF THE M.A. HENCE, THE CONTENTIONS OF THE ASSESSEE ARE REJECTED AS DEVOID OF ANY MERIT S . IT IS ORDERED ACCORDINGLY. THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 29 .11.2018 IS RECALLED AND THE SAME IS POSTED FOR HEARING ON 24.07.2019. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE ARE ALLOWED. ORDER PRONOUNCED ON THIS 15 TH DAY OF JULY , 2019 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIA L MEMBER COCHIN ; DATED : 15 TH JULY , 2019 . DEVDAS* COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPLICANTS 2. THE RESPONDENT. 3. THE CIT (APPEALS) THRISSUR . 4. THE PR.CIT THRISSUR . 5. DR, ITAT, COCHIN 6 . GUARD FILE.