SHREE YOGESHWAR CO. OP. CREDIT SOC. LTD.,MEHSANA V. .THE ITO, WARD-4 PRESENT WARD-1, PATAN

ITA 920/AHD/2024

AI Insights

The case involves Shree Yogeshwar Co. Op. Credit Society Limited, which appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi, for the Assessment Year 2017-18. The primary contention was the denial of exemption under Section 80P of the Income Tax Act, 1961, which the society claimed as a cooperative credit society. The Assessing Officer had rejected the exemption claim and assessed an income of Rs.35,42,472, which the society contested. The CIT(A) upheld the Assessing Officer's decision, leading to the appeal in the Income Tax Appellate Tribunal. The Tribunal's decision partly favored the society by allowing a deduction for proportionate expenses related to interest earned from Nationalised Banks, while maintaining the assessment of other income.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470427 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Mavilayi Service Co-operative Bank Limited vs. CIT, Katlary Kariyana Merchant Sahkari Sarafi Mandali Limited vs ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N. J. VYAS
• Assessee Lawyers: P. F. JAIN
• Keywords: TDS; Co-operative Credit Society
• Section: 142(1); 143(2); 234B; 80P

Judgement Text

"ITA No.920/Ahd/2024 Assessment Year: 2017-18 Shree Yogeshwar Co. Op. Credit Society Limited Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.920/Ahd/2024 Assessment Year: 2017-18 Shree Yogeshwar Co. Op. Credit Society Limited, At – Kahoda, Post – Kahoda, Taluko – Unjha, Dist. Mahesana – 384 130 [PAN – AAAJS 1127 N] Vs. Income Tax Officer, Ward-4, Patan, Present Income Tax Officer, Ward-1, Patan Gujarat – 384 265. (Appellant) (Respondent) Assessee by Shri P.F. Jain, AR Revenue by Shri N.J. Vyas, Sr. DR Date of Hearing 03.12.2024 Date of Pronouncement 20.12.2024 O R D E R This appeal is filed by the assessee against order dated 31.03.2024 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeal :- “1. The Ld. CIT(A) has erred in law and on facts in upholding the order of ITO wrongly denying exemption u/s.80P to the assessee which is co- operative credit society without properly appreciating the facts and submission furnished to him. 2. He has erred in law and on facts in upholding the income of Rs.35,42,472/- assessed by the Income Tax Officer as against NIL income returned by the appellant society by claiming income exempt u/s. 80P of the Act, 1961. 3. On the facts of the assessee, the exemption u/s.80P ought not to have been denied. 4. The learned CIT(A) has grievously erred in law and on facts in rejecting the appeal of the by ignoring the decision of ITAT in as much as that the ITA No.920/Ahd/2024 Assessment Year: 2017-18 Shree Yogeshwar Co. Op. Credit Society Limited Page 2 of 3 issue of exemption has already been decided in favour of assessee by the Hon'ble ITAT in the case of assessee itself. 5. He has erred in law and on facts in wrongly applying the decision mentioned in the order and wrongly observing that assessee has miserably failed to discharge the onus in as much as that the issue has already been decided in the earlier appeals by the Hon'ble ITAT in the case of assessee itself. 6. On the facts of the assessee no interest u/s. 234B of Rs.3,44,619/- ought to have been levied. 7. The appellant craves leave to add, to alter and/or to modify any ground of appeal..” 3. The assessee is a Co-operative Credit Society and filed return of income on 27.10.2017 declaring total income of Rs.35,42,472/- which was claimed as exempt income under Section 80P of the Income Tax Act, 1961 being banking and Credit Society and accordingly filed NIL income. The TDS of Rs.47,163/- was claimed as refund. The Assessing Officer issued notice under Section 143(2) of the Act on 08.08.2018 and, thereafter, notice under Section 142(1) of the Act was issued on 20.08.2019. The assessee society has not responded to the notices and, therefore, the Assessing Officer rejected the claim under Section 80P of the Act and made addition of Rs.35,42,472/-. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the issue related to 80P deduction is covered by the decision of Hon’ble Apex Court in the case of Mavilayi Service Co-operative Bank Limited vs. CIT, 123 taxmann.com 161 (SC) as the assessee is a Co-operative Bank and the investment held in Nationalised Bank and the interest derived from the Nationalised Banks the assessee be allowed deduction from proportionate expenditure and actual expenditure. The interest received from the Co-operative Societies or Co-operative Banks should be allowed in the light of the decision of Hon’ble Gujarat High Court in the case of Katlary Kariyana Merchant Sahkari Sarafi ITA No.920/Ahd/2024 Assessment Year: 2017-18 Shree Yogeshwar Co. Op. Credit Society Limited Page 3 of 3 Mandali Limited vs ACIT (order dated 04.01.2022 - C/SCA/20585/2019 amended subsequently). 6. The Ld. DR relied upon the Assessment Order and the Order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has claimed exemption under Section 80P of the Act and if the assessee has received interest from Nationalised Banks, the expenses of the earning of the said interest should be allowed proportionately as held by various decisions. Therefore, the Assessing Officer is directed to verify and allow proportionate expenditure on the interest received from Nationalised Banks. Thus, appeal of the assessee is partly allowed. 8. In the result, appeal filed by the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on this 20th December, 2024. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 20th day of December, 2024 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "