M/S. THE TOTGARS CO-OPERATIVE SALE SOCIETY V. THE PRINCIPAL COMMISSIONER OF INCOME TAX

RP/100085/2017

AI Insights

The case involves M/s. The Totgars Co-operative Sale Society, which sought a review of a judgment that denied them a 100% deduction under Section 80-P(2) of the Income Tax Act, 1961 for interest income from deposits with Co-operative Banks. The society argued that similar deductions were allowed in previous years and cited a CBDT circular and a Karnataka High Court decision supporting their position. However, the court found that these did not pertain to the specific legal issues decided in the original judgment and affirmed the distinction between Co-operative Banks and Co-operative Societies.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 698053 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 22-09-2017
• Assessment Year: misc
• Other Referred Cases: CIT Vs. Totagar's Co-operative Sale Limited, The Principal Commissioner of Income Tax and another Vs. Bagalkot District Central Co-operative Bank Limited
• Laws Referred To: Code of Civil Procedure, 1908, Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: A SHANKAR
• Keywords: Co-operative Society; Deduction; Income Tax; Interest income; Re-assessment; Review petition
• Section: 147; 148; 260A; 114; 47; 80-P(2); 194-A(3)

Judgement Text

" 1/9 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 22nd DAY OF SEPTEMBER, 2017 PRESENT THE HON'BLE Dr.JUSTICE VINEET KOTHARI AND THE HON’BLE Dr. JUSTICE H.B. PRABHAKARA SASTRY REVIEW PETITION Nos.100085-100093/2017 IN ITA No.100066/2016 C/W ITA Nos.100064/2016, 100065/2016, 100067/2016, 100068/2016 & ITA Nos.100051-100054/2016 Between: M/s. The Totgars Co-operative Sale Society Rep. by its General Manager Sri. Raveesh Achut Hegde TSS Building, New Market Yard Sirsi-581402. …Petitioner (By Mr. A. Shankar, Advocate) And: 1. The Principal Commissioner of Income Tax C.R. Building, Navanagar, Hubballi. 2. Income Tax Officer Ward-1, Kamath Building TSS Road, Sirsi-581402. … Respondents Date of Order 22-09-2017 R.P.Nos.100085-100093/2017 In ITA No.100066/2016 & connected matters M/s. The Totgars Co-operative Sale Society Vs. The Principal Commissioner of Income Tax and Anr. 2/9 **** These Review Petitions are filed under Section 114 read with Order 47 Rule 1 of the Code of Civil Procedure, 1908 and Section 260A of the Income Tax Act, 1961, praying to Review the Judgment dated 16.06.2017 passed by this Hon’ble Court in ITA No.10006/2016 connected with ITA Nos.100064, 100065, 10067, 100068 & 100051- 100054/2016 (Annexure-A) & etc., These Review Petitions coming on for Orders this day, the Court made the following:- ORDER Mr. A. Shankar, Adv. for Petitioner 1. Delay condoned. Heard. 2. The Assessee – M/s the Totgars Co-operative Sale Society has filed these Review Petitions seeking a review of the judgment delivered by this Bench on 16/06/2017 deciding a batch of Income Tax Appeals. 3. The submissions made by the learned counsel for the Review Petitioners, Mr. A. Shankar are summarized below: (i) That for the preceding Assessment Years, the Assessing Authority himself had allowed Date of Order 22-09-2017 R.P.Nos.100085-100093/2017 In ITA No.100066/2016 & connected matters M/s. The Totgars Co-operative Sale Society Vs. The Principal Commissioner of Income Tax and Anr. 3/9 the deduction under Section 80-P(2) of the Income Tax Act, 1961, in respect of the Interest Income of the petitioner assessee from deposits made with Co-operative Banks with reference to Section 80(2)(d) of the Act and the copies of such Assessment Orders passed for the previous years were placed on record along with Synopsis of Arguments filed on 14/06/2017 after the arguments were heard and judgment was reserved on 12/06/2017, but the same have not been considered by this Court; (ii) That the judgment of the Karnataka High Court in CIT, Bagalkot District Central Co-operative Society case was cited along with a Circular of the CBDT which directed that Co-operative Banks need not deduct tax under Section 194-A(3) of the Act in respect Date of Order 22-09-2017 R.P.Nos.100085-100093/2017 In ITA No.100066/2016 & connected matters M/s. The Totgars Co-operative Sale Society Vs. The Principal Commissioner of Income Tax and Anr. 4/9 of the Interest paid by them to their Members have not been considered; and lastly, (iii) That the right of the petitioner Assessee to challenge the other grounds of initiating Re-assessment Proceedings for these Assessment Years involved in the Income Tax Appeals decided by this Court should be left open to be adjudicated before the Income tax Appellate Tribunal (ITAT). 4. We have heard the learned counsel for the Review Petitioner, Mr. A. Shankar. 5. We are satisfied that none of the contentions raised above, calls for a review or results into any mistake apparent on the face of the judgment, which may require a review or recall of the judgment Date of Order 22-09-2017 R.P.Nos.100085-100093/2017 In ITA No.100066/2016 & connected matters M/s. The Totgars Co-operative Sale Society Vs. The Principal Commissioner of Income Tax and Anr. 5/9 delivered by this Bench on 16/06/2017. The reasons in brief are as under: 6. This Court by detailed reasons given in the judgment dated 16/06/2017, particularly, from paras 11 to 19 of the judgment has categorically held that the petitioner – Assessee Co-operative Society is not entitled to 100% deduction under Section 80-P(2) of the Act even with reference to Section 80-P(2)(d) of the Act of the interest earned on such Deposits made by it may even with the Co-operative Banks instead of other Scheduled or Nationalized Banks during these assessment years and it does not change the character of the income by change of Banks and in view of the Supreme Court decision in the case of the assessee itself reported in [(2010) 322 ITR 283(SC)] (CIT Vs. Totagar’s Co- operative Sale Limited) and that the Co operative Banks are different from Co-operative Societies and they are not species of the genus Co-operative Societies (vide paragraphss 12 and 13) and therefore Date of Order 22-09-2017 R.P.Nos.100085-100093/2017 In ITA No.100066/2016 & connected matters M/s. The Totgars Co-operative Sale Society Vs. The Principal Commissioner of Income Tax and Anr. 6/9 the petitioner assessee would not be entitled to such deduction under Section 80-P(2)(a) or (d) of the Act. 7. The reference to the orders passed by the Assessing Authorities for the preceding years giving such deduction to the assessee Society, is of no avail and the Court’s opinion cannot depend upon the stand taken by the Assessing Authority in the previous years, even if they were placed on record later on but they are of little help to the petitioner assessee. 8. The assessee petitioner is of course free to lay appropriate challenge to the decision of this Court before the Hon’ble Supreme Court, but this Court is of the considered opinion that the grounds raised in the present review petitions do not result in any mistake apparent in the said judgment which calls for a review, within the narrow compass and parameters available to a party seeking a review before this Court. 9. That as far as the review petitioner – assessee’s challenge to the justifiability of initiation of re- Date of Order 22-09-2017 R.P.Nos.100085-100093/2017 In ITA No.100066/2016 & connected matters M/s. The Totgars Co-operative Sale Society Vs. The Principal Commissioner of Income Tax and Anr. 7/9 assessment proceedings under Section 147/148 of the Act is concerned, this Court in para 25 has clearly observed that it remains an academic issue in view of the conclusions arrived at by this Court. Obviously, the judgment of this Court will be applicable only on the question of deduction at the rate of 100% under Section 80-P(2) of the Act to the assessee petitioner and it does not discuss the other issues or grounds for questioning the re-assessment proceedings under Section 147/148 of the Act. 10. The contention raised by the learned counsel for the Review Petitioner – Assessee along with the Synopsis of Arguments filed in this Court on 14/06/2017 while the orders after concluding the hearing was reserved on 12/06/2017 and judgment delivered on 16/06/2017 is that, he had submitted a copy of the order passed by the Division Bench of this Court in I.T.A.No.100161/2015 (The Principal Commissioner of Income Tax and another Vs. The Date of Order 22-09-2017 R.P.Nos.100085-100093/2017 In ITA No.100066/2016 & connected matters M/s. The Totgars Co-operative Sale Society Vs. The Principal Commissioner of Income Tax and Anr. 8/9 Bagalkot District Central Co-operative Bank Limited), decided on 16/12/2015 along with the said Synopsis of Arguments in which the Division Bench of this Court, by a short order relying upon the CBDT Circular No.19/15 in F.No.142/14/2015-TPL, held that the Co-operative Banks are not required to deduct tax at source under Section 194-A(3) on the interest paid or credited on or before 01/07/2015 on the Time Deposits of its Members. 11. This contention has little force for seeking a review of the judgment dated 16/06/2017 delivered by us, as the said order of the Division Bench based on CBDT Circular does not at all deal with the controversy decided by us on 16/06/2017, and that Bench only said that where the Co-operative Banks were held not liable to tax at source in view of amendment of Section 194-A(3)(v) of the Act and for which the said CBDT Circular was issued. The said CBDT Circular or the decision of the Division Bench of this Court does not Date of Order 22-09-2017 R.P.Nos.100085-100093/2017 In ITA No.100066/2016 & connected matters M/s. The Totgars Co-operative Sale Society Vs. The Principal Commissioner of Income Tax and Anr. 9/9 have any bearing on the issue raised and decided in the judgment dated 16/06/2017. Therefore, it does not furnish any ground to seek a review of the said judgment. 12. Therefore, we do not find any good ground to review our decision dated 16/06/2017 on any of the submissions made above by the learned counsel for the review petitioner - assessee. 13. The Review petitions are therefore liable to be dismissed and are accordingly, dismissed. No costs. Sd/- JUDGE Sd/- JUDGE BMV* "