M/s.Atholi Service Co-op Bank,, Calicut v. The ITO, Calicut

ITA 405/COCH/2014 | 2010-2011
Pronouncement Date: 14-10-2016 | Result: Allowed

Appeal Details

RSA Number 40521914 RSA 2014
Assessee PAN AACAA2851J
Bench Cochin
Appeal Number ITA 405/COCH/2014
Duration Of Justice 2 year(s) 19 day(s)
Appellant M/s.Atholi Service Co-op Bank,, Calicut
Respondent The ITO, Calicut
Appeal Type Income Tax Appeal
Pronouncement Date 14-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 14-10-2016
Date Of Final Hearing 14-10-2016
Next Hearing Date 14-10-2016
Assessment Year 2010-2011
Appeal Filed On 25-09-2014
Judgment Text
ITA NO 405/C/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH (SMC) KOCHI BEFORE SHRI GEORGE GEORGE K JUDICIAL MEMBER ITA NO . 405/COCH/2014 (A SST YEAR 2010 - 11 ) M/S ATHOLI SERVICE COOP BAN K PO ATHOLI KOZHIKODE 673 315 VS THE INCOME T A X OFFICER WARD 2(3) KO ZHIKODE ( APPELLANT) (RESPONDENT) PAN NO. AACAA2851J ASSESSEE BY SH C BM WARRIER REVENUE BY SH A DHANARAJ SR DR DATE OF HEARING 14 TH OCT 2016 DATE OF PRONOUNCEMENT 14T H OCT 2016 ORDER PER GEORGE GEORGE K J M : THIS APPEAL IS RESTORED TO THE TRIBUNAL BY THE HONBLE KERALA HIGH COURT VIDE JUDGMENT DATED 16 TH FEB 2016 IN ITA NO. 198 OF 201 5 . 2 BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A COOPERATIVE SOCIETY REGISTERED UNDER THE KERALA COOPERATIVE SOCIETIES ACT 1969. THE ASSESSEE HAD FAILED TO FILE RETURN OF INCOME FOR THE AY 2010 - 11; THE AO ISSUED A NOTICE U/S 142(1) REQUIRING T HE ASSESSEE TO FILE RETURN OF INCOME. THE ASSESSEE NEITHER COMPLIED WITH THIS NOTICE NOR FILED RETURN OF INCOME IN TERMS OF SECTION 139 OR 142(1) OF THE ACT AND HENCE BEST JUDGMENT ASSESSMENT U/S 144 OF THE ACT WAS COMPLETED BY ITA NO 405/C/2014 2 DENYING THE BENEFIT OF DEDUCTION U/S 80P OF TH E I T ACT. THE AO HELD THAT BY VIRTUE OF SECTION 80A(5) OF THE ACT THE ASSESSEE WAS NOT ENTITLED TO THE BENEFIT OF DEDUCTION CLAIMED U/S 80P OF THE ACT SINCE THE RETURN OF INCOME WAS NOT FURNISHED WITHIN THE TIME LIMIT PRESCRIBED U/S 139 OF THE ACT. 3 AGGRIEVED BY THE ASSESSMENT THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) CONFIRMED THE ASSESSMENT ORDER. 4 AGGRIEVED BY THE ABOVE ORDER OF THE CIT(A) THE ASSESSEE PREFERRED APPEAL TO THE TRIBUNAL. THE TRIBUNAL VIDE O RDER DATED 21. 11.2014 DISPOSED OFF THE APPEAL OF THE ASSESSEE. THE TRIBUNAL HELD THAT SINCE THE RETURN WAS NOT FILED WITHIN THE TIME PRESCRIBED U/S 139(1)OR U/S 139(4) THE ASSESSEE WAS NOT ENTITLED TO THE BENEFIT OF DEDUCTION U/S 80P OF THE ACT IN VIEW OF SECTION 80A(5) OF THE ACT. 5 AGGRIEVED BY THE ORDER OF THE TRIBUNAL THE ASSESSEE PREFERRED FURTHER APPEAL U/S 260A OF THE ACT. THE HONBLE KERALA HIGH COURT VIDE JUDGMENT DATED 16.2.2016 IN ITA NO. 1 98 OF 2015 RESTORED THE MATTER TO THE TRIBUNAL. IT IS IN THIS CONTEXT TH E CASE WAS HEARD ON 14 TH OCT 2016. 6. I HAVE HEARD THE RIVAL PARTIES AND PERUSED THE MATERIAL ON RECORD. AS REGARDS THE BELATED FILING OF RETURN THE HONBLE HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE HONBLE HIGH COURT HAD HELD THAT THE TRIBUNAL WAS NOT JUSTI FIED IN DENYING THE BENEFIT OF EXEMPTION U/S 80P OF THE ACT ITA NO 405/C/2014 3 ON THE MERE GROUND OF BELATED FILING OF RETURN OF INCOME. THE HONBLE HIGH COURT WAS CONSIDERING THE FOLLOWING SUBSTANTIAL QUESTION OF LAW: B WHETHER THE TRIBUNAL IS JUSTIFIED IN DENYING TH E EXE MPTION U/S 80P OF THE I T A CT 1961 ON THE MERE GROUND OF BELAYED FILING OF RETURN BY THE ASSESSEE? C. WHETHER A RETURN FILED BY THE ASSESSEE BEYOND THE PERIOD STIPULATED U/S 139(1)/(4) OR SECTION 142(1)/148 CAN BE HELD AS NON - EST IN LAW AND INVALID FOR TH E PURPOSE OF DECIDING EXEMPTION U/S 80P OF THE I T ACT 1961? 6.1 IN CONSIDERING THE ABOVE SUBSTANTIAL QUESTION OF LAW THE HONBLE HIGH COURT RENDERED THE FOLLOWING FINDINGS: 18. QUESTIONS B & C RELATE TO DENIAL OF EXEMPTION ON GROUND REFERABLE TO BELA TED FILING OF RETURN THAT IS TO SAY RETURNS FILED BEYOND THE PERIOD STIPULATED UNDER SECTION 139)1) OR SECTION 139(4) AS THE CASE MAY BE AS WELL AS SECTION 142 (1) OR SECTION 148 AS THE CASE MAY BE. THERE ARE NO CASES AMONG THESE APPEALS WHERE RETURNS WERE NOT FILED. THERE ARE CASES WHERE CLAIMS HAVE BEEN MADE ALONG WITH THE RETURNS AND THE RETURNS WERE FILED WITHIN TIME. STILL FURTHER THERE ARE CASES WHERE RETURNS WERE FILED BELATEDLY THAT IS TO SAY BEYOND THE PERIOD STIPULATED UNDER SUB SECTION 1 OR 4 OF SECTION 139; AND THERE ARE ALSO RETURNS FILED AFTER THE PERIOD WITH REFERENCE TO SECTIONS 142(1) AND 148 OF THE I T ACT. 19. SECTION 80A(5) PROVIDES THAT WHERE THE ASSESSEE FAILS TO MAKE A CLAIM IN HIS RETURN OF INCOME FOR ANY DEDUCTION INTER AL IA UNDER ANY PROVISION OF CHAPTER VIA UNDER THE HEADING 'C - DEDUCTIONS IN RESPECT OF CERTAIN INCOMES' NO DEDUCTION SHALL BE ALLOWED ' TO HIM THEREUNDER. THEREFORE IN CASES WHERE NO RETURNS HAVE BEEN FILED FOR A PARTICULAR ASSESSMENT YEAR NO DEDUCTIONS SHALL BE ALLOWED. THIS EMBARGO IN SECTION 80A(5) WOULD APPLY THOUGH SECTION 80P 1 S NOT INCLUDED I N SECTION 80AC. THIS IS SO BECAUSE THE INHIBITION AGAINST ALLOWING DEDUCTION IS WORDED IN QUITE SIMILAR TERMS IN SECTIONS 80A(5) AND 80AC OF WHICH SECTI ON 80A(5) IS A PROVISION INSERTED THROUGH THE FINANCE ACT 33/2009 WITH EFFECT FROM 1.4.2013 AFTER THE INSERTION OF SECTION 80AC AS PER THE FINANCE ACT OF 2006 WITH EFFECT FROM 1.4.2006. THIS CLEARLY EVIDENCES THE ITA NO 405/C/2014 4 LEGISLATIVE INTENDIMENT THAT THE INHIBITION CONTAINED IN SUB SECTION 5 OF SECTION 80A WOULD OPERATE BY ITSELF. IN CASES WHERE RETURNS HAVE BEEN FILED THE QUESTION OF EXEMPTIONS OR DEDUCTIONS REFERABLE TO SECTION 80P WOULD DEFINITELY HAVE TO BE CONSIDERED AND GRANTED IF ELIGIBLE. 20 HENCE QUESTIO N WOULD ARISE AS TO WHETHER BELATED RETURNS FILED BEYOND THE PERIOD STIPULATED UNDER SECTION 139(1) OR SECTION 139(4) AS WELL AS FOLLOWING SECTIONS 142(1) AND 148 PROCEEDINGS COULD BE CONSIDERED FOR EXEMPTION. IF THOSE RETURNS ARE ELIGIBLE TO BE ACCEPTED IN TERMS OF LAW GOING BY THE PROVISIONS OF THE STATUE AND THE GOVERNING BIND PRECEDENTS IT GOES WITHOUT SAYING THAT THE CLAIM FOR EXEMPTION WILL ALSO STAND EFFECTUATED AS A CLAIM DULY MADE AS PART OF THE RETURNS SO FILED FOR DUE CONSIDERATION. 21 WHEN A NOTICE UNDER SECTION 142(1) IS ISSUED THE PERSON MAY FURNISH THE RETURN AND WHILE DOING SO COULD ALSO MAKE CLAIM FOR DEDUCTION REFERABLE TO SECTION 80P. NOT MUCH DIFFERENT IS THE SITUATION WHEN PRE - ASSESSMENT ENQUIRY IS CARRIED FORWARD BY ISSUANCE OF NOTICE UNDER SECTION 142 (1) OR WHEN NOTICE 1 S ISSUED ON THE PREMISE OF ESCAPED ASSESSMENT REFERABLE TO SECTION 148 OF THE IT ACT. THIS POSITION NOTWITHSTANDING WHEN AN ASSESSMENT IS SUBJECTED TO FIRST APPEAL OR FURTHER APPEALS UNDER THE IT ACT OR ALL QU ESTIONS GERMANE FOR CONCLUDING THE ASSESSMENT WOULD BE RELEVANT AND CLAIMS WHICH MAY RESULT 1N M ODIFICATION OF THE RETURNS ALREADY FI 1 ED COULD ALSO BE ENTERTAINED PARTICULARLY WHEN IT RELATES TO CLAIMS FOR EXEMPTIONS. THIS IS SO BECAUSE THE FINA 1 IY OF ASS ESSMENT WOULD NOT BE ACHIEVED IN ALL SUCH CAS E S UNTIL THE TERMINATION OF ALL S U CH APPE LL ATE REMEDIES. UNDER SUCH CIRCUMSTANCES THE TRIBUNAL WAS NOT JUSTIFIED IN DENYING EXEMPTION UNDER SECTION 80P OF THE I T ACT ON THE MERE GROUND OF BELATED FILING OF RE TURN BY THE ASSESSEE CONCERNED. A RETURN FI 1 ED BY THE ASSESSEE BEYOND THE PERIOD STIPULATED UNDER SECTION 139(1) OR 139(4) OR UNDER SECTION 142(1) OR SECTION 148 CAN ALSO BE ACCEPTED AND ACTED UPON PROVIDED FURTHER PROCEEDINGS IN RELATION TO SUCH ASSESSM ENTS ARE PENDING IN THE STATUTORY HIERARCHY OF ADJUDICATION IN TERMS OF THE PROVISIONS OF THE IT ACT. IN ALL SUCH SITUATIONS IT CANNOT BE TREATED THAT A RETURN FILED AT ANY STAGE OF SUCH PROCEEDINGS COULD BE TREATE D A S NON - EST IN LAW AND INVALID FOR THE PURP O S E OF DECIDING EXEMPTION UNDER SECTION 80P O THE I T ACT. WE THUS ANSWER SUBSTANTIAL QUESTIONS OF LAW BAND C F ORMULATED AND ENUMERATED ABOVE. ITA NO 405/C/2014 5 6.2 IN LIGHT OF THE ABOVE JUDGMENT OF THE HONBLE HIGH COURT THE BELATED FILING OF RETURN OF INCOME BY TH E ASSESSEE DOES NOT DISENTITLE IT FROM THE BENEFIT OF DEDUCTION U/S 80P(2) OF THE ACT. FURTHER THE ASSESSEE IN THE INSTANT CASE IS A PRIMARY AGRICULTURAL CREDIT SOCIETY REGISTERED UNDER THE KERALA COOPERATIVE SOCIETIES ACT 1969. THE CERTIFICATE HAS BEEN ISSUED BY THE REGISTRAR OF COOPERATIVE SOCIETIES TO THE ABOVE SAID EFFECT AND THE SAME IS ON RECORD. THE HONBLE HIGH COURT IN ASSESSEES OWN CASE AND OTHER BATCH OF CASES HAD HELD THAT PRIMARY AGRICULTURAL CREDIT SOCIETY REGISTERED UNDER THE KERA LA COOPERATIVE SOCIETIES ACT 1969 IS ENTITLED TO THE BENEFIT OF DEDUCTION U/S 80P(2). SINCE THERE IS A CERTIFICATE ISSUED BY THE REGISTRAR OF COOPERATIVE SOCIETIES STATING THAT THE ASSESSEE IS A PRIMARY AGRICULTURAL CREDIT SOCIETY I HOLD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF DEDUCTION U/S 80P(2) OF THE ACT. IT IS ORDERED ACCORDINGLY. 7 IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF OCT 2016 . SD/ - ( GEORGE GEORGE K) JUDICIAL MEMBER COCHIN: DATED 14 TH OCT 2016 RAJ* ITA NO 405/C/2014 6 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR 6 . GUARD FILE BY ORD ER ASSISTANT REGISTRAR ITAT COCHIN