ITO, Trivandrum v. Kalakkode Service Co-op Bank Ltd, Kollam

ITA 52/COCH/2011 | 2007-2008
Pronouncement Date: 27-07-2012 | Result: Allowed

Appeal Details

RSA Number 5221914 RSA 2011
Assessee PAN AAAAT1143Q
Bench Cochin
Appeal Number ITA 52/COCH/2011
Duration Of Justice 1 year(s) 6 month(s) 10 day(s)
Appellant ITO, Trivandrum
Respondent Kalakkode Service Co-op Bank Ltd, Kollam
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2012
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 27-07-2012
Date Of Final Hearing 24-07-2012
Next Hearing Date 24-07-2012
Assessment Year 2007-2008
Appeal Filed On 17-01-2011
Judgment Text
1 ITA NO. 52 & 679/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 52/COCH/2011 (ASSESSMENT YEAR 2007-08) ITO WD.1 VS M/S KALAKKODE SERVICE CO-OP. KOLLAM BANK LTD NO.1194 KALLAKODE PO PARAVOOR KOLLAM 691 302 PAN : AAAAT1143Q (APPELLANT) (RESPONDENT) I.T.A NO. 679/COCH/2010 (ASSESSMENT YEAR 2007-08) M/S KALAKKODE SERVICE CO-OP.BANK LTD VS ITO WD.1 KOLLAM 691 302 KOLLAM (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VEDANGA R PRABHU REVENUE BY : SHRI PRADUMNA KUMA SINGH DATE OF HEARING : 24-07-2012 DATE OF PRONOUNCEMENT : -07-2012 O R D E R PER N.R.S. GANESAN (JM) BOTH THE APPEALS OF THE REVENUE AND THE ASSESSEE A RE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX(A)-I TRIVANDRUM DATE D 05-10-2010 FOR THE ASSESSMENT YEAR 2007-08. SINCE BOTH THE APPEALS ARISE OUT OF THE VERY SAME ORDER OF COMMISSIONER OF INCOME-TAX(A) WE HEARD THEM TOGETHER AND DISPOS E OF THE SAME BY THIS COMMON ORDER. 2 ITA NO. 52 & 679/COCH/2010 2. WE HEARD SHRI VEDANGA R PRABHU THE LD.REPRESENT ATIVE FOR THE ASSESSEE WHO SUBMITTED THAT THE ASSESSEE IS A PRIMARY AGRICULTUR AL CREDIT SOCIETY ENGAGED IN THE BUSINESS OF BANKING. THE ASSESSEE CLAIMED DEDUCTIO N U/S 80P(2) OF THE ACT. HOWEVER THE LOWER AUTHORITIES DISALLOWED THE CLAIM OF THE A SSESSEE ON THE GROUND THAT THE ASSESSEE IS A BANK AND NOT A CO-OPERATIVE SOCIETY. REFERRING TO THE PAPER BOOK PAGE NO.7 THE LD.REPRESENTATIVE SUBMITTED THAT THE CO-O PERATIVE DEPARTMENT CERTIFIED THAT THE ASSESSEE IS A REGISTERED PRIMARY AGRICULTURAL C REDIT SOCIETY. THEREFORE IT IS NOT CORRECT TO SAY THAT THE ASSESSEE IS ONLY A BANK AND NOT A SOCIETY. ON A QUERY FROM THE BENCH WHETHER THIS CERTIFICATE WAS PRODUCED BEFORE THE ASSESSING OFFICER THE LD.REPRESENTATIVE VERY FAIRLY SUBMITTED THAT THIS C ERTIFICATE WAS ONLY PRODUCED BEFORE THE COMMISSIONER OF INCOME-TAX(A). HOWEVER IT WAS NOT CONSIDERED EVEN BY THE COMMISSIONER OF INCOME-TAX(A). 3. ON THE CONTRARY SHRI PRADUMNA KUMAR SINGH THE LD.DR SUBMITTED THAT THE ACTIVITY OF THE ASSESSEE IS IN THE NATURE OF BANKIN G; THEREFORE THE LOWER AUTHORITIES FOUND THAT THE ASSESSEE IS A BANK AND NOT A SOCIETY . THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT THE LOWER AUTHORITIES HAD NO OCCASIO N TO CONSIDER THE CERTIFICATE ISSUED BY THE CO-OPERATIVE DEPARTMENT. SINCE IT IS NOT A SOCIETY THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 80P(2) OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE OBSERVATION MADE BY THE COMMISSIONER OF INCOME-TAX(A) AT PAGE 3 PARAGRAPH 4.2 IT APPEARS T HAT THE CERTIFICATE ISSUED BY THE JOINT REGISTRAR OF CO-OPERATIVE COPY OF WHICH IS AVAILAB LE AT PAGE 7 OF THE PAPER BOOK IS FILED BEFORE THE COMMISSIONER OF INCOME-TAX(A). HOWEVER THE COMMISSIONER OF INCOME- TAX(A) WITHOUT CONSIDERING THE SAME FOUND THAT THE ACTIVITY OF THE ASSESSEE IS IN THE NATURE OF GIVING FINANCIAL ASSISTANCE TO VARIOUS SE CTIONS OF THE PEOPLE. THE COMMISSIONER OF INCOME-TAX(A) HAS ALSO FOUND THAT I N THE BYE LAW IT IS NOT STATED THAT THE ASSESSEE WAS A PRIMARY AGRICULTURAL CO-OPERATIV E SOCIETY. THE ASSESSEE HAS FILED THE 3 ITA NO. 52 & 679/COCH/2010 COPY OF THE BYE LAW THE TRANSLATED VERSION OF WHIC H IS AVAILABLE AT PAGE 12 OF THE PAPER BOOK. IT APPEARS THAT THE COMMISSIONER OF INCOME-T AX(A) HAS NOT TAKEN INTO CONSIDERATION THE OBJECT CONTAINED IN THE BYE LAW A S IS AVAILABLE AT PAGE 12 OF THE PAPER BOOK. IT IS ALSO AN ADMITTED FACT THAT THE ACCOUNT S OF THE ASSESSEE WERE AUDITED BY THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES. IT IS N OT KNOWN IN CASE THE ASSESSEE WAS NOT A CO-OPERATIVE SOCIETY WHAT CONSTITUTED FOR THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES TO AUDIT THE ACCOUNTS OF THE ASSESSEE. IT IS ALSO NOT CLEAR WHETHER THE ASSESSEE WAS GIVEN THE LICENCE / PERMISSION BY RBI TO CARRY ON THE BAN KING ACTIVITY UNDER BANKING REGULATIONS ACT OR NOT. IN THESE FACTUAL CIRCUMSTA NCES THIS TRIBUNAL IS OF THE OPINION THAT THE MATTER NEEDS TO BE CONSIDERED IN THE LIGHT OF THE CERTIFICATE ISSUED BY THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES WHICH IS AVAIL ABLE AT PAGE 7 OF THE PAPER BOOK. ACCORDINGLY THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ISSUE OF DEDUCTION U/S 80P(2) IS REMITTED BACK TO THE FILE OF THE ASSE SSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 5. NOW COMING TO THE DEPARTMENTAL APPEAL IN ITA NO. 52/COCH/2011 THE ONLY ISSUE ARISES FOR CONSIDERATION IS REGARDING COMPUTATION O F INCOME. THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER COMPUTED THE INCOME ON THE BA SIS OF THE AUDIT REPORT OF THE CO- OPERATIVE DEPARTMENT ON RECEIPT AND PAYMENT METHOD AS AGAINST THE REAL INCOME AND REAL EXPENDITURE METHOD ON WHICH THE RETURN OF INCO ME WAS FILED. ACCORDING TO THE LD.DR SINCE THE ACCOUNTS OF THE ASSESSEE WAS SUBJEC TED TO AUDIT BY CO-OPERATIVE DEPARTMENT THE CORRECT METHOD IS TO COMPUTE THE IN COME ON THE BASIS OF THE SAID AUDIT REPORT. WE HEARD THE LD.REPRESENTATIVE FOR THE ASS ESSEE ALSO. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE MAIN ISSUE OF DE DUCTION U/S 80P(2) IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATI ON. THEREFORE THIS TRIBUNAL IS OF THE OPINION THAT THE METHOD OF COMPUTATION OF INCOME AL SO NEEDS TO BE RECONSIDERED BY 4 ITA NO. 52 & 679/COCH/2010 ASSESSING OFFICER IN THE LIGHT OF MATERIAL AVAILABL E ON RECORD FOR THE SAKE OF CONSISTENCY. ACCORDINGLY THE ORDERS OF LOWER AUTHORITY ARE SET ASIDE IN RESPECT OF COMPUTATION OF INCOME AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECOMPUTE THE INCOME AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE AND IN ACCORDANCE WITH LAW. 7. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE STAND ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH JULY 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN DT : 27 TH JULY 2012 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR INCOME-TAX APPELLATE TRIBUNAL COCHIN BENCH