INCOME TAX OFFICER-25(1)(1),MUMBAI, MUMBAI V. ISHWAR BHAVAN CO-OPERATIVE HOUSING SOCIETY LTD, MUMBAI

MA 554/MUM/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7097 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-05-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 29-02-2024
• Assessment Year: 2020-2021
• Appeal Filed On: 19-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK RAO AW MANOJ RAGHANI
• Section: 143(1); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER M.As. No. 554 & 555/Mum./2023 In ITAs no.3285 & 3269/Mum./2022 (Assessment Years : 2020–21 & 2021-22) ITO-25(1)(1) 115, Kautilya Bhawan, BKC, Bandra East, Mumbai-400051 ................ Applicant v/s M/s. Ishwar Bhavan Co-operative Housing Society A-Road, Churchgate, Mumbai-400020 PAN- AAAI1470K ................Respondent Assessee by : Shri Ashok Rao a/w Manoj Raghani Revenue by : Smt Mahita Nair Date of Hearing – 01/03/2024 Date of Order – 22/05/2024 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present Miscellaneous Applications have been filed by the Revenue under section 254(2) of the Income Tax Act, 1961 (“the Act”) seeking rectification of the common order dated 24/02/2023, passed by the coordinate bench of the Tribunal in assessee’s appeals being ITA no.3285/Mum./2022 and ITA no.3269/Mum./2022, for the assessment years 2020-21 and 2021-22, respectively. Ishwar Bhavan Co-operative Housing Society Ltd M.As. no.554 & 555/Mum/2023 Page | 2 2. For ready reference, the submissions made by the Revenue in the Miscellaneous Applications are as under: “1. “Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT failed to appreciate the decision of the Hon’ble High Court of Karnataka in the case of Pr. CIT vs Totagars co-operative Sale Society (2017) 395 ITR 611 (Karn), which held that a co-operative society would not be entitled to claim of deduction u/s 80P(2)(d) when the interest income is not arising from business operations of assessee and the assessee being a housing cooperative society lending/depositing money is not the business of assessee?” 2. “Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT failed to appreciate that the questions of laws in the case of Pr. CIT vs Totagars cooperative Sale Society (2017) 395 ITR 611 (Karn) and Pr. CIT vs Totagars cooperative Sale Society (2017) 392 ITR 74 (Karn) are entirely different?” 3. “Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT erred in relying upon Tulsiani Chambers Premises Co-operative Society Ltd vs ITO ( ITA 2459-2462/Mum/2021), wherein the two Totagars co-operative Sale Society cases were held as conflicting and therefore decision in favour of assessee was relied upon while deciding the case in favour of the assessee(page 8 of the current ITAT order)?” 4. “Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT erred in relying upon Tulsiani Chambers Premises Co-operative Society Ltd vs ITO ( ITA 2459-2462/Mum/2021), which relies on K. Subramanian vs Siemens India Ltd. (1985) 156 ITR 11 (Bombay) case, without appreciating that there is no inherent conflict between the judgments of Hon'ble High Court of Karnataka in cases Pr. CIT vs Totagars co-operative Sale Society (2017) 395 ITR 611 (Karn) and Pr. CIT vs Totagars co-operative Sale Society (2017) 392 ITR 74 (Karn) as different questions of law have been decided upon by the Hon'ble Karnataka High Court ?” 3. Thus, the common grievance of the Revenue in the Miscellaneous Applications is that the Co-ordinate Bench of Tribunal while allowing assesse’s appeal for the assessment years 2020-21 and 2021-22 failed to appreciate the decisions of the Hon’ble Karnataka High Court in Pr.CIT v/s Totagars Co- operative Sales Society, [2017] 395 ITR 611 (Karn.) and in Pr.CIT v/s Totagars Co-operative Sales Society, [2017] 392 ITR 74 (Karn.). Accordingly, the Revenue has prayed for rectification of the common order passed by the Ishwar Bhavan Co-operative Housing Society Ltd M.As. no.554 & 555/Mum/2023 Page | 3 Co-ordinate Bench on 24/02/2023 for the assessment years 2020-21 and 2021-22. 4. On the other hand, the learned Authorised Representative has objected to the prayer made in the present Miscellaneous Application. 5. We have considered the submissions of both sides and perused the material available on record. From the perusal of the record, we find that in the present case, the assessee is a Co-operative Housing Society and received interest income from Maharashtra State Co-operative Bank and Saraswat Co- operative Bank. In its return of income, the assessee claimed deduction u/s 80P(2)(d) of the Act in respect of the aforesaid interest income. The learned CPC while processing the return income 143(1) of the Act denied the deduction claimed by the assessee u/s 80P(2)(d) of the Act. The learned CIT(A) dismissed the appeal filed by the assessee by placing reliance on the decision of the Hon’ble Supreme Court in Totagars Co-operative Society Ltd. Vs. ITO, 322 ITR 283 (SC) and the decision of the Hon’ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. vs CIT, Calicut, [2021] 431 ITR 1 (SC). We find that in further appeal by the assessee, the Co-ordinate Bench of the Tribunal vide common order dated 24/02/2023 allowed the appeal filed by the assessee and held that the assessee society would be entitled to claim deduction u/s 80P(2)(d) of the Act in respect of interest received from Co-operative Banks. While arriving at the aforesaid conclusion, we find that the Co-ordinate Bench placed reliance upon the decision of another Co-ordinate Bench dated 18/04/2022 passed in Tulsiani Chambers Premises Co-operative Society Ltd Vs. ITO, in ITA. No.2459-2462/Mum./2021, wherein the Co-ordinate Bench Ishwar Bhavan Co-operative Housing Society Ltd M.As. no.554 & 555/Mum/2023 Page | 4 after considering the aforesaid two decisions passed by the Hon’ble Karnataka High Court in Totagars Co-operative Sales Society (supra) held that Co- operative Society would be entitled to claim deduction u/s 80P(2)(d) of the Act on the interest income earned on investments/deposit with Co-operative Banks. Further, the Co-ordinate Bench of the Tribunal vide common order dated 24/02/2023 noted that the Hon’ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. (supra) has held that Co-operative Banks or Co- operative Society which are carrying on banking business would not be hit by the provisions of section 80P(4) of the Act. 6. In the present Miscellaneous Applications, the Revenue has submitted that the Co-ordinate Bench vide common order dated 24/02/2023 failed to appreciate the difference in questions of law before the Hon’ble Karnataka High Court in aforesaid two decisions in Totagars Co-operative Sales Society (supra). We, at the outset, find that the submission of the Revenue in merely questioning the conclusion of the Co-ordinate Bench can only be called as challenging the merits of the judgment and the same cannot be termed as a “mistake apparent from the record”. Therefore, once the Co-ordinate Bench has come to the conclusion on the basis of facts and after considering the decisions of the Hon’ble Supreme Court, as noted above, and followed the decision of the Co-ordinate Bench rendered on a similar issue, we are of the considered view that same cannot be subject to rectification within the limited scope of section 254(2) of the Act, in absence of any mistake apparent from the record. We are further of the considered view that in the guise of seeking rectification of the order, the Revenue has sought a review of the common Ishwar Bhavan Co-operative Housing Society Ltd M.As. no.554 & 555/Mum/2023 Page | 5 order passed by the coordinate bench on 24/02/2023 in assessee’s appeals being ITA no.3285/Mum./2022 and ITA no.3269/Mum./2022, which is completely impermissible under section 254(2) of the Act. Therefore, the present Miscellaneous Applications filed by the Revenue are dismissed. 7. In the result, the present Miscellaneous Applications filed by the Revenue are dismissed. Order pronounced in the open Court on 22/05/2024 Sd/- AMARJIT SINGH ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 22/05/2024 Vijay Pal Singh, (Sr. PS) Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. True Copy By Order Assistant Registrar ITAT, Mumbai