THE ADIVASI KRISHAK MULTI STATE COOPERATIVE SOCIETY LTD,RANCHI V. ITO WARD-3(2), RANCHI

ITA 144/RAN/2023

AI Insights

The case involves The Adivasi Krishak Multi State Cooperative Society Ltd., which appealed against the order of the NFAC that denied them deductions under section 80P of the Income Tax Act, 1961, for the Assessment Year 2017-18. The society, formed under the Multi State Cooperative Societies Act, 2002, claimed deductions on income received from various sources including grants and fees, which was disallowed by the Assessing Officer (AO) and upheld by the NFAC. The Tribunal found that the NFAC's order lacked a detailed reasoning and independent application of mind, leading to its decision to remand the case back to the NFAC for a comprehensive re-evaluation.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472706 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 29-06-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P. K. KOLEY
• Keywords: Set aside
• Section: 143(3); 250; 80P

Judgement Text

" आयकर अपीऱीय अधिकरण, र ाँची न्य यपीठ, र ाँची IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI PARTHA SARATHI CHAUDHURY, JM AND SHRI PRABHASH SHANKAR, AM आयकर अपीऱ सं./ITA No.144/RAN/2023 (निि ारण वषा / Assessment Year :2017-18 The Adivasi Krishak Multi State Cooperative Society Ltd. Vs. ITO, Ward-3(2), Ranchi स्थायी ऱेखा सं./जीआइआर सं./ PAN/GIR No. : AACAT4731E (अपीऱाथी /Appellant) : (प्रत्यथी / Respondent) Appellant by : None Respondent by : Shri P. K. Koley, Sr. DR सुनवाई की तारीख / Date of Hearing : 03/10/2024 घोषणा की तारीख/Date of Pronouncement : 14/10/2024 आदेश / O R D E R Per Partha Sarathi Chaudhury, JM : This appeal preferred by the assessee emanates from the order of NFAC dated 10.05.2023 passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the \"Act\") for Assessment Year 2017-18 as per the grounds of appeal on record. 2. The brief facts are that the assessee is a Multi State Cooperative Society which has been formed under the MSCS Act 2002 (Multi State Cooperative Societies Act) under the Department of Agriculture, Cooperation and Farmer Welfare, Ministry of Agriculture and Farmer Welfare, Government of India. The main objective of the society as per the documents on record is to organise, promote and ITA No.144/RAN/2023 Assessment Year :2017-18 The Adivasi Krishak Multi State Cooperative Society Ltd. 2 develop, marketing, processing and storage of agricultural produce etc. To also undertake interstate trade, wholesale or retail and to act and assist for technical advice in agricultural production for the promotion and working of its members in India. That during the F.Y. relevant to A.Y 2017-18, the assessee had provided the aforesaid services to its members, who belongs from the Adivasi community and who are covered under the Schedule Tribes. The services was in the nature of technical education and training which are covered in the stated objective of the society and these facts have been accepted by the AO. The assessee had received the following amounts as grants: S.N. Description Amount 1 Grant in the form of Aid from Jharkhand State SC cooperative development corporation limited 22,19,400/- 2 Training fees received 5,77,023/- 3 Members contribution 4,00,000/- 4 Membership fees 52,600/- 2.1 The assessee thereafter had prepared a Profit and Loss A/c with the surplus of Rs.13,34,052/- and accordingly filed the ITR. The assessee has also claimed deduction of the aforesaid amount u/s 80P of the Act. The case of the assessee was selected for scrutiny and the assessment was completed u/s 143(3) of the Act where the A.O had disallowed the deduction claimed u/s 80P of the Act. 3. When the matter travelled to the NFAC, detailed written submissions were filed and after considering the said submissions along with assessment order, at para 5.1, the NFAC has given its observation and finding. That at para 5.3, it had held that the activities of the assessee did not fall u/s 80P of the Act and also did not fall under ITA No.144/RAN/2023 Assessment Year :2017-18 The Adivasi Krishak Multi State Cooperative Society Ltd. 3 the principles of mutuality as had been claimed by the assessee and accordingly the order of the A.O was upheld. 4. We have given our careful consideration to the facts and circumstances in this case along with all the documents on record. At the time of hearing, there was an adjournment filed by the learned. AR of the assessee stating therein that due to some urgent hearing matter before the Hon'ble Patna High Court, he was unable to attend for hearing before the ITAT, Ranchi Bench, Ranchi. The directive of Hon'ble Supreme Court is absolutely clear that adjournment cannot be granted on a routine manner and the ground that the counsel is busy in some other forum should not be a valid ground for taking adjournment. If the counsel had other engagement, necessary arrangements should have been made for attending the hearing as scheduled before the ITAT. Therefore, the adjournment is rejected and the matter has been examined and taken as heard. 4.1 The assessee-society under the Department of Agriculture, Cooperation and Farmer Welfare, Government of India, had received grant-in-aid amounting to Rs.22,19,400/-. Apart from this, it had received training fee, membership fee and membership contribution and had surplus of Rs.13,34,052/-. The assessee had claimed deduction u/s 80P of the Act in respect of these income. This deduction was denied by the revenue authorities. We observe from the order of the NFAC that it had denied the said exemption by stating that the activities of the assessee do not fall within the purview of the relevant provision and neither it is within the principles of mutuality but the reasons for arriving at such decision, is not apparent at all in the order of the NFAC. There has been no independent enquiry conducted nor there has ITA No.144/RAN/2023 Assessment Year :2017-18 The Adivasi Krishak Multi State Cooperative Society Ltd. 4 been any independent application of mind on the subject matter and therefore, it is not speaking order which has been passed by the NFAC, rather, it is bereft of facts and legal reasoning. The mandate of the Act demands in terms of section 250(4) and (6) of the Act, the first appellate authority shall conduct relevant enquiry and examine the facts along with providing reasons for arriving at a particular decision. In the present case, this exercise is missing from the order of the NFAC. That even the higher judicial forums are also crystal clear, wherein, they have held in several decisions that every appellate authority should deal with the merits of the case. In this particular case before us, though the merits have been dealt with but the NFAC has not come out with a speaking reasoned order. In view thereof, we set aside the order of the NFAC and remand the matter back to its file for de novo adjudication to come out with a speaking order by giving specific reasons as to whether the assessee is eligible for deduction u/s 80P of the Act or not and shall pass order in terms of section 250(4) and (6) of the Act while complying with the principles of natural justice. The assessee shall also comply with all notices of hearing and represent the matter on merits. Before parting, we also like to mention over here that the assessee also in its written submission has not provided exhaustively and specifically the reasons for claiming the deduction u/s 80P of the Act. The assessee has only stated that certain amount is on surplus and on that surplus amount, the assessee had claimed deduction u/s 80P of the Act. In this regard, the assessee is also required to substantiate with reasons regarding the legality of the claim made by it through relevant facts. That as per the above terms, we set aside the order of the NFAC and ITA No.144/RAN/2023 Assessment Year :2017-18 The Adivasi Krishak Multi State Cooperative Society Ltd. 5 remand back the matter to its file. The grounds of appeal of the assessee stands allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 14/10/2024. Sd/- Sd/- (Prabhash Shankar) (Partha Sarathi Chaudhury) Accountant Member Judicial Member र ाँची Ranchi; ददनांक Dated: 14/10/2024 RS (on tour) आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : आदेश िुस र/ BY ORDER, (Senior Private Secretary) On tour, ITAT, Ranchi 1. अपीऱाथी / The Appellant- The Adivasi Krishak Multi State Cooperative Society Ltd., Vill-Lalitgram, Kathitaar, P.O- Ratu, Ranchi 2. प्रत्यथी / The Respondent- ITO, Ward-3(2), Ranchi 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, र ाँची / DR, ITAT, Ranchi 6. गार्ड फाईऱ / Guard file. सत्यापपत प्रतत //True Copy// "