The ITO, Wd-2, Palakkad V. The Elapulli Service Co-op Bank Ltd, Palakkad

MA 46/COCH/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6333 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-08-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-08-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 17-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• 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. 46 /COCH/201 9 : A.Y 201 4 - 201 5 (ARISING OUT OF ITA NO. 471 /COCH/2018) THE INCOME TAX OFFICER WARD 2 PALAKKAD . VS. M/S. THE ELAPULLI SERVICE CO - OPERATIVE BANK LTD. ELAPULLY, PALAKKAD 678 622 . PAN : AADAT5694D . ( APPLICANT ) (RESPONDENT) APPLICANT BY : SMT.A.S.BINDHU, SR.DR. RESPONDENT BY : --- NONE --- (WRITTEN SUBMISSION) DATE OF HEARING : 02.08 .2019 DATE OF PRONOUNCEMENT : 05 .0 8 .2019 O R D E R PER GEORGE GEORGE K, JM : THIS MISCELLANEOUS APPLICATION AT THE INSTANCE OF THE REVENUE IS SEEKING FOR RECALLING THE ORDER OF THE TRIBUNAL DATED 28 . 11.2018, PASSED IN ITA NO.471/COCH/2018 FOR ASSESSMENT YEAR 2014 - 2015. 2. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IN THIS CASE IS A PRIMARY AGRICULTURAL CREDIT SOCIETY REGISTERED UNDER THE KERALA CO - OPERATIVE SOC IETIES ACT, 1969. THE ASSESSEES CLAIM OF DEDUCTION U/S 80P OF THE IT.ACT WAS DENIED BY THE ASSESSING OFFICER BY TREATING THE ASSESSEE AS CO - OPERATIVE BANK AND NOT PRIMARY AGRICULTURAL CREDIT SOCIETY . M A NO. 46 /COCH /201 9. M/S. THE ELAPULLI SCB LIMITED . 2 3. THE ASSESSEE AGGRIEVED BY THE DENIAL OF DEDUCTION U/S 80P OF THE I.T.ACT FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE 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 APPEAL OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO GRANT DEDUCTION U/S 80P(2) OF THE I.T.ACT AS THE ASSESSEE IS CLASSIFIED AS PRIMARY AGRICULTURAL CREDIT SOCIETY BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES. 4. ON FURTHER APPEAL BY THE REVENUE, THE VIEW TAKEN BY THE CIT(A) WAS CONF IRMED BY THE TRIBUNAL VIDE ITS ORDER DATED 29.11.2018. 5. THE REVENUE BEING AGGRIEVED BY THE ORDER OF THE TRIBUNAL DATED 28.11.2018 , HAS FILED THIS MISCELLANEOUS APPLICATION . 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] HAS REVERSED DICTUM LAID DOWN BY THE HONBLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA). IT WAS STATED THAT THE FULL COURT OF THE HONBLE HIGH COURT HAD CATEGORICALLY HELD THAT CERTIFICATE CHARACTERIZING A CO - OPERATIVE SOCIETY AS PRIMARY AGRICULTURAL SOC IETY IS NOT A CONCLUSIVE PROOF BUT ACTIVITIES OF ASSESSEE HAS TO BE EXAMINED BY THE A.O. IN EACH ASSESSMENT YEARS TO DETERMINE WHETHER ASSESSEE IS CO - OPERATIVE SOCIETY OR CO - OPERATIVE BANK . 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 M A NO. 46 /COCH /201 9. M/S. THE ELAPULLI SCB LIMITED . 3 28.11 .2018 AND THE SAME NEEDS TO BE RECTIFIED. THE LEARNED AR, HOWEVER, SUBMITTED THAT 6. NONE APPEARED ON BEHALF OF THE ASSESSEE, HOWEVER, A WRITTEN SUBMISSION WAS FILED BY THE ASSESSEE TO CONTENT 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 JURISDICTIONAL HIGH COURT IN THE CASE OF CHIRAKKAL S ERVICE CO - OPERATIVE BANK LTD. (SUPRA) . 7 . WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRE SE NTATIVE AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE , THE FIRST APPELLATE AUTHORITY AND THE TRIBUNAL HAD ALLOWED THE CLAIM OF DEDUCTION U/S 80P OF THE I.T.ACT BY FOLLOWING THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE BANK LTD. (SUPRA). CERTAIN 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 M A NO. 46 /COCH /201 9. M/S. THE ELAPULLI SCB LIMITED . 4 ACTIVITIES OF ASSESSEES SHOULD BE EX AMINED 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 TRIBUNAL 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 ASSESSEE AS CO - OPERATIVE SOCIETY AS PRIMARY AGRICULTURAL CREDIT SOCIETY . 7 .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. THE 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 ACTIVITIES O F THE ASSESSEE HAS TO BE EXAMINED TO DETERMINE WHETHER THE ASSESSEE IS CO - OPERATIVE SOCIETY OR CO - OPERATIVE BANK . IN THE LIGHT OF THE LARGER BENCH JUDGMENT OF THE HONBLE KERALA HIGH COURT, THE TRIBUNAL ORDER DATED 28.11 .2018, SUFFERS FROM A MISTAKE APPARE NT ON RECORD AND THE SAME NEEDS TO BE RECALLED. ACCORDINGLY T HE ORDER OF THE TRIBUNAL DATED 28.11 .2018 IS RECALLED AND THE SAME IS POSTED FOR HEARING ON 03. 0 9 .2019. M A NO. 46 /COCH /201 9. M/S. THE ELAPULLI SCB LIMITED . 5 8 . IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON THIS 05 TH DAY OF AUGUST , 2019 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIA L MEMBER COCHIN ; DATED : 05 TH AUGUST , 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.