M/s. Athmashakthi Multipurpose Co-operative Society Limited, Mangaluru V. The Income tax Officer, Ward - 1(4), Mangaluru

MA 61/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9263 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-08-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 18-03-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 80P; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER [MP NO. 6 1 /B ANG /20 20 (IN ITA NO. 12 21 /B ANG /20 1 9 )] (ASSESSMENT YEAR: 20 1 6 - 1 7 ) M/S. ATHMASHAKTHI MULTIPURPOSE CO -OPERATIVE SOCIETY LTD., I FLOOR, SHREE ARCADE , BALMATTA ROAD, BENDOREWELL, MANGALORE. PAN : A ACAA 3741 R APPLICANT VS. THE ITO, WARD - 1(4), MANGALORE . RESPONDENT APPLICANT BY : SHRI. R. CHANDRA SHEKHAR , A DVOCATE REVENUE BY : SHRI. GANESH R. GHALE , STANDING COUNSEL DATE OF HEARING : 07 / 0 8 /20 20 DATE OF PRONOUNCEMENT : 14 / 0 8 /20 20 O R D E R PER A. K. GARODIA, AM: THIS MISCELLANEOUS PETITION (MP) IS FILED BY THE ASSESSEE AND IT IS CONTENDED IN THIS MP THAT THERE ARE SOME APPARENT MISTAKE IN THE TRIBUNAL ORDER WHICH SHOULD BE RECTIFIED UNDER SECTION 254 (2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). 2. IN THE COURSE OF HEARING, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT THE ASSESSEES ALLEGATIONS ABOUT APPARENT MISTAKES IN THE TRIBUNAL ORDER ARE NOTED BY THE ASSESSEE IN PARAS 5 AND 6 OF THE MP FILED BY THE ASSESSEE AND THEREFORE, THE SAME MP NO. 61/BANG/2020 (IN ITA NO.1221/BANG/2019) PAGE 2 OF 4 SHOULD BE RECTIFIED OR THIS TRIUBNAL ORDER SHOULD BE RECALLED FOR THE PURPOSED OF PASSING THE CORRECT ORDER. HENCE, I REPRODUCE PARAS 5 AND 6 OF THE MP FILED BY THE ASSESSEE WHICH READS AS UNDER: 5. APPELLANT AGGRIEVED BY THE ORDER OF THE CIT (A) DATED 28- 03-2019 FILED APPEALS BEFORE THIS HON'BLE INCOME TAX APPELLATE TRIBUNAL, BANGALORE AND THIS APPELLATE TRIBUNAL (SMC) BY COMMON ORDER DATED 18-10-2019 IN ITA NOS.1220 & 1221/BANG/2019 HAS SET ASIDE THE ORDER RELATING TO THE ASSESSMENT YEAR 2015-16 (ITA NO.1220/BANG/2019) AND HAS CONFIRMED THE ORDER RELATING TO THE ASSESSMENT YEAR 2016-17 BY HOLDING THE ADMISSION OF 233 NEW ASSOCIATED MEMBERS DURING THE YEAR WHICH IS IN VIOLATION OF THE PROVISIONS OF KARNATAKA CO,-OPERATIVE SOCIETIES ACT, 1959 AS SUCH APPELLANT IS NOT ENTITLED TO DEDUCTIONS AS CLAIMED. 6. APPELLANT SUBMITS THAT THE HON'BLE TRIBUNAL WHILE DISMISSING THE APPEAL HAS NOT CONSIDERED THE LATER DECISION OF THE HON'BLE HIGH COURT OF KARNATAKA RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT CO-OPERATIVE LTD., (230 TAXMAN 309 (KARNATAKA) WHEREIN IT WAS HELD THERE SHOULD BE A CLEAR FINDING BY THE ASSESSING AUTHORITY IN REGARD TO SOURCE OF DEPOSITS IS WHETHER ASSESSEE'S OWN FUNDS PROVIDED BY NOMINAL / ASSOCIATED MEMBERS. THE ENTIRE INTEREST RECEIVED FROM CO-OPERATIVE BANKS HAS BEEN TREATED AS INCOME FROM OTHER SOURCES WITHOUT REFERENCE TO ANY DEDUCTIONS. 3. AS AGAINST THIS, LEARNED DR OF THE REVENUE SUBMITTED THAT THERE IS NO APPARENT MISTAKE AND THEREFORE, THE MP FILED BY THE ASSESSEE SHOULD BE DISMISSED. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS PER PARAS 5 AND 6 OF THE MP REPRODUCED ABOVE, IT IS SEEN THAT THE ONLY CONTENTION RAISED IN THESE 2 PARAS IS THIS THAT WHILE DISMISSING MP NO. 61/BANG/2020 (IN ITA NO.1221/BANG/2019) PAGE 3 OF 4 THE APPEAL OF THE ASSESSEE, THE TRIBUNAL HAS NOT CONSIDERED THE LATER DECISION OF THE HONBLE HIGH COURT OF KARNATAKA RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT CO-OPERATIVE LTD., (230 TAXMAN 309 (KARNATAKA). I FIND THAT IN THIS JUDGMENT, THIS WAS NOT THE ISSUE AS TO WHETHER THERE IS ANY VIOLATION OF THE PROVISIONS OF KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959, BECAUSE OF ADMISSION OF ASSOCIATED MEMBERS IN EXCESS OF PRESCRIBED LIMIT. HENCE, THIS JUDGMENT OF HONBLE HIGH COURT OF KARNATAKA IS NOT RELEVANT IN THE PRESENT CASE TO DECIDE THIS ISSUE REGARDING VIOLATION OF THE PROVISIONS OF KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959, BECAUSE OF ADMISSION OF ASSOCIATED MEMBERS IN EXCESS OF PRESCRIBED LIMIT AND HENCE, ITS NON CONSIDERATION IN THE TRIBUNAL ORDER DOES NOT AMOUNT TO ANY APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 5. AS PER PARA 5 OF THE IMPUGNED TRIBUNAL ORDER, IT IS NOTED BY THE TRIBUNAL THAT IN ASSESSMENT YEAR 2016-17, THE NUMBER OF ASSOCIATED MEMBERS HAS GONE UP TO 504 WHICH MEANS THAT 233 NEW ASSOCIATED MEMBERS WERE MADE AFTER 06.09.2014 I.E., AFTER THE LIMIT WAS PRESCRIBED IN KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959, THAT THE NUMBER OF ASSOCIATED MEMBERS SHOULD NOT EXCEED 15% OF THE REGULAR MEMBERS AND ON THE BASIS MP NO. 61/BANG/2020 (IN ITA NO.1221/BANG/2019) PAGE 4 OF 4 OF THESE FACTS, IT IS HELD BY THE TRIBUNAL THAT THERE IS GROSS VIOLATION OF THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959, AFTER THE AMENDMENT AS ON 06.09.2014 AND BECAUSE OF THESE REASONS, THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD., VS. ACIT AS REPORTED IN 397 ITR 1 IS SQUARELY APPLICABLE AND THEREFORE, IN ASSESSMENT YEAR 2016-17, THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80P OF THE ACT IS NOT ALLOWABLE. HENCE, IT IS SEEN THAT THERE IS NO APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 6. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) JUDICIAL MEMBER (A. K. GARODIA) ACCOUNTANT MEMBER PLACE : BANGALORE DATED : 14/08/2020 /NS/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE