Income TAx Officer Ward-6(2)(2), Bangalore v. M/s Mahalakshmi sauhatda Credit Co-operative Limited , Bangalore

ITA 1605/BANG/2017 | 2012-2013
Pronouncement Date: 28-11-2017 | Result: Allowed

Appeal Details

RSA Number 160521114 RSA 2017
Assessee PAN AABAM2202L
Bench Bangalore
Appeal Number ITA 1605/BANG/2017
Duration Of Justice 4 month(s) 2 day(s)
Appellant Income TAx Officer Ward-6(2)(2), Bangalore
Respondent M/s Mahalakshmi sauhatda Credit Co-operative Limited , Bangalore
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
Last Hearing Date 14-11-2017
First Hearing Date 14-11-2017
Assessment Year 2012-2013
Appeal Filed On 26-07-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER ITA NO.1605/BANG/2017 ASSESSMENT YEAR : 2012-13 THE INCOME TAX OFFICER WARD 6(2)(2) BENGALURU. VS. MS. MAHALAKSHMI SAUHARDA CREDIT CO-OPERATIVE LTD. NO. 664 ASHIRWAD 4 TH CROSS MAHALAKSHMIPURAM LAYOUT BENGALURU 560 096. PAN : AABAM 2202 L APPELLANT RESPONDENT REVENUE BY : SHRI. M. RAJASEKHAR ADDL. CIT ASSESSEE BY : SHRI. R. E. BALASUBRAMANYAM CA DATE OF HEARING : 27.11.2017 DATE OF PRONOUNCEMENT : 28 . 11 .201 7 O R D E R PER SUNIL KUMAR YADAV JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(A) INTERALIA ON THE FOLLOWING GROUNDS: 1) THE IMPUGNED ORDER IS ILLEGAL IMPROPER UNJUST AND MUCH AGAINST ALL KNOWN CANONS OF LAW. 2) THE LEARNED ASSESSING OFFICER HAS ERRED IN DISALLOW ING DEDUCTION U/S 80P(2)(A)(I) OF THE INCOME-TAX ACT. 1961 AND CONCL UDING THE ASSESSMENT TREATING THE APPELLANT AS A CO-OPERATIVE BANK INSTE AD OF CO-OPERATIVE SOCIETY. 3) THE LEARNED ASSESSING OFFICER HAS ALSO ERRED IN PAS SING ORDER BY INVOKING SUBSECTION(4) OF SECTION SOP WHICH IS IN . FACT APPLICABLE TO CO- OPERATIVE BANK ENGAGED IN BUSINESS OF BANKING. 4) THE APPELLANT CONTENDS THAT IT IS A REGISTERED CRED IT CO-OPERATIVE SOCIETY PROVIDING CREDIT FACILITIES TO ITS MEMBERS ONLY FOR THE VARIOUS PURPOSES LIKE HOUSING VEHICLE BUSINESS SITE PURCHASE AND OTHER PERSONAL PURPOSES. AND IT ALSO ACCEPTS DEPOSITS LIKE FIXED DEPOSITS R ECURRING DEPOSITS PIGMY DEPOSITS ETC. FROM ITS MEMBERS ONLY. 5) THE LEARNED ASSESSING OFFICER HAS AGAIN ERRED BY MI S-INTERPRETING 'IF THE INTENTION OF THE LEGISLATURE WAS NOT TO GRANT DEDUC TION U/S 80P(2)(A)(I) TO CO- ITA NO. NO.1605/BANG/2017 PAGE 2 OF 5 OPERATIVE SOCIETIES CARRYING ON THE BUSINESS OF PRO VIDING CREDIT FACILITIES TO ITS MEMBERS THEN THE SECTION WOULD HAVE BEEN DELETED. THE NEW PROVISO INSERTED TO SECTION 80P(4) APPLICABLE ONLY TO CO-OP ERATIVE BANKS AND NOT TO CREDIT CO-OPERATIVE SOCIETIES AND SOUHARDA CREDIT C O-OPERATIVE SOCIETIES'. 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 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 ITA NO. NO.1605/BANG/2017 PAGE 3 OF 5 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. NO.1605/BANG/2017 PAGE 4 OF 5 ITA NO. NO.1605/BANG/2017 PAGE 5 OF 5 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.