Income Tax Officer Ward-2 , Gadag v. Om Sai Cooperative Souharda Sahakari Niyamit , Gadag

ITA 1330/BANG/2017 | 2014-2015
Pronouncement Date: 28-11-2017 | Result: Allowed

Appeal Details

RSA Number 133021114 RSA 2017
Assessee PAN AAAAO0223G
Bench Bangalore
Appeal Number ITA 1330/BANG/2017
Duration Of Justice 5 month(s) 15 day(s)
Appellant Income Tax Officer Ward-2 , Gadag
Respondent Om Sai Cooperative Souharda Sahakari Niyamit , Gadag
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2017
Appeal Filed By Department
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 28-11-2017
Assessment Year 2014-2015
Appeal Filed On 12-06-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER ITA NOS.1329 & 1330/BANG/2017 ASSESSMENT YEARS : 2013-14 2014-15 THE INCOME TAX OFFICER WARD - 2 GADAG. VS. M/S. OM SAI COOPERATIVE CREDIT SOUHARDA SAHAKARI NIYAMIT HANGAL COMPLEX BEHIND OLD BUS STAND GADAG. PAN : AAAAO0223G APPELLANT RESPONDENT REVENUE BY : SHRI. M. RAJASEKHAR ADDL. CIT ASSESSEE BY : SHRI. S. V. RAVISHANKAR ADVOCATE DATE OF HEARING : 27.11.2017 DATE OF PRONOUNCEMENT : 28.11.2017 O R D E R PER SUNIL KUMAR YADAV JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF CIT(A) INTERALIA ON THE FOLLOWING GROUNDS: I) WHETHER LD.CIT(A) WAS CORRECT IN HOLDING THAT TH E PROVISION OF SEC8O(P) OF THE IT ACT IS APPLICABLE TO CO-OPERATIV E SOCIETIES WHICH ARE ENGAGED IN BUSINESS OF BANKING INCLUDING PROVIDING CREDIT FACILITIES TO THEIR MEMBERS? II) WHETHER LD.CIT(A) WAS CORRECT IN HOLDING THAT T HE ASSESSEE IS A CO-OPERATIVE SOCIETY AND NOT A COOPERATIVE BAN K IN TERMS OF SECTION 80P(4) OF THE INCOME TAX ACT WITHO UT CONSIDERING THE MEANING OF CO-OPERATIVE BANK AS ENVISAGED UNDER PART V OF BANKING REGULATION ACT 19 49 WHEREIN IT IS DEFINED THAT CO-OPERATIVE BANK INCLUD ES PRIMARY CO-OPERATIVE BANK WHICH FURTHER DEFINED AS CO- OPERATIVE SOCIETY WITH THE PRIMARY OBJECTIVE OF TRA NSACTIONS OF BANKING BUSINESS? III) WHETHER LD.CIT(A) IS CORRECT IN PRONOUNCING IT S DECISION AGAINST ITA NO. NOS.1329 & 1330/BANG/2017 PAGE 2 OF 4 THE REVENUE FOLLOWING THE DECISIONS OF HON'BLE HIGH COURT OF KARNATAKA'S ORDER IN CASE OF CIT V. SRI BILURU GURU BASAVA PATTINA SAHAKARI SANGHA NIYAMITA BAGALKOT IN ITA NO. 5006/2 013 DTD: 05.02.2014 ON THE ISSUES WHICH ARE BEING CONTESTED BEFORE THE HON'BLE SUPREME COURT. 2. DURING THE COURSE OF HEARING THE LEARNED DR HAS CO NTENDED THAT THE ISSUE IS SQUARELY COVERED BY THE ORDERS OF THE TRIB UNAL THUS THE ISSUE CAN BE SENT BACK TO THE AO TO READJUDICATE THE ISSUE IN TH E LIGHT OF THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF PR.CIT VS. VIJAY SOUHARDA CREDIT SAHAKARI LTD. IN WHICH THE MATTER HAS BEEN RESTORE D BACK TO THE FILE OF THE AO IN THE LIGHT OF JUDGMENT OF THE APEX COURT IN THE C ASE OF CITIZEN CO-OPERATIVE SOCIETY LIMITED VS. ASSISTANT COMMISSIONER OF INCOM E TAX IN CIVIL APPEAL NO.10245/2017 DISPOSED OF ON 08.08.2017. THE LEARNED COUNSEL FOR THE ASSESSEE HOWEVER AGREED TO THE PROPOSITION OF THE LEARNED DR. 3. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTH ORITIES BELOW IN THE LIGHT OF THE RIVAL SUBMISSION WE FIND THAT IN IDEN TICAL CIRCUMSTANCES THE JURISDICTIONAL HIGH COURT HAS RESTORED THE MATTER B ACK TO THE AO TO READJUDICATE THE ISSUE IN THE LIGHT OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF CITIZEN CO-OPERATIVE SOCIETY LIMITED (SUPRA). R ELEVANT OBSERVATION OF THE HONBLE APEX COURT IS EXTRACTED HEREUNDER FOR THE S AKE OF REFERENCE: 6. THE SOLE SUBSTANTIAL QUESTION OF LAW RAISED BY THE APPELLANTS REQUIRES TO BE ANSWERED ON THE DETERMINATION OF THE CRUCIAL QUESTION WHETHER THE RESPONDENT-ASSESSEE IS A CO-OPERATIVE SOCIETY O R A CO-OPERATIVE BANK. IN THE JUDGMENT REFERRED TO BY THE LEARNED COUNSEL FOR THE REVENUE IN THE CITIZEN CO-OPERATIVE SOCIETY LIMITED SUPRA A CATEGORICAL FINDING WAS GIVEN BY THE ASSESSING OFFICER THAT THE RESERVE BANK OF INDIA HA S ITSELF CLARIFIED THAT BUSINESS OF THE APPELLANT DOES NOT AMOUNT TO THAT O F A CO-OPERATIVE BANK THE APPELLANTS THEREFORE WOULD NOT COME WITHIN THE MISC HIEF OF SUB-SECTION (4) OF SECTION 80P. IT WAS HELD THAT THE ACTIVITIES OF TH E APPELLANTS THEREIN WAS TO ITA NO. NOS.1329 & 1330/BANG/2017 PAGE 3 OF 4 CATER TWO DISTINCT CATEGORIES OF PEOPLE NAMELY NOM INAL MEMBERS AND THE ORDINARY MEMBERS. THE ACTIVITIES OF THE ASSESSEE T HEREIN WAS CONSTRUED TO BE FINANCIAL BUSINESS CONTRARY TO THE PROVISIONS OF TH E CO-OPERATIVE SOCIETIES ACT. AS SUCH IT WAS HELD THAT THE SAID ASSESSEE WAS NO T ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. 7. A CURSORY VIEW OF THE ORDER IMPUGNED HEREIN WOU LD INDICATE THAT NO FINDING IS FORTHCOMING REGARDING THE ASPECT OF T HE ACTIVITIES CARRIED OUT BY THE RESPONDENT-ASSESSEE WHETHER AS A CO-OPERATIVE SOCIETY OR NOT. IN THE ABSENCE OF SUCH FACTUAL FINDING THE LEGAL PROPOSIT IONS RENDERED BY THE HONBLE APEX COURT CANNOT BE APPLIED. AS SUCH WE ARE OF T HE CONSIDERED OPINION THAT THE MATTER REQUIRES RECONSIDERATION BY THE ASSESSIN G OFFICER TO THE EFFECT WHETHER THE RESPONDENT-ASSESSEE COMES WITHIN THE RE ALM OF CO-OPERATIVE SOCIETY TO GET ENTITLEMENT OF DEDUCTION UNDER SECTI ON 80P(2)(A)(I) OF THE ACT. 8. HENCE WE REMAND THE MATTER TO THE ASSESSING OF FICER TO ANSWER THIS QUESTION AND THEN DECIDE THE MATTER IN THE LIG HT OF THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF CITIZEN CO-OPERAT IVE SOCIETY LIMITED SUPRA AS EXPEDITIOUSLY AS POSSIBLE. THUS WITHOUT RENDER ING ANY FINDING ON THE SUBSTANTIAL QUESTION OF LAW RAISED ORDER OF THE IN COME TAX APPELLATE TRIBUNAL IMPUGNED HEREIN IS SET ASIDE. WE DIRECT THE ASSES SING OFFICER TO RECONSIDER THE MATTER IN THE LIGHT OF THE OBSERVATIONS AFORESA ID. 4. IN THE LIGHT OF THE JUDGMENT OF THE JURISDICTION AL HIGH COURT I FEEL IT PROPER TO RESTORE THE MATTER TO THE FILE OF THE AO FOR READJUDICATION OF THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. 5. ACCORDINGLY I SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE AO IN TERMS INDICATED ABOVE. 6. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 28 TH NOVEMBER 2017. SD/- ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE. DATED: 28 TH NOVEMBER 2017. /NS/* ITA NO. NOS.1329 & 1330/BANG/2017 PAGE 4 OF 4 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER SR. PRIVATE SECRETARY ITAT BANGALORE.