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

ITA 596/COCH/2014 | 2011-2012
Pronouncement Date: 28-09-2016 | Result: Allowed

Appeal Details

RSA Number 59621914 RSA 2014
Assessee PAN AAAAC1648P
Bench Cochin
Appeal Number ITA 596/COCH/2014
Duration Of Justice 1 year(s) 8 month(s) 30 day(s)
Appellant M/s.Chevayur Service Co-op Bank Ltd, Calicut
Respondent The ITO, Calicut
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 28-09-2016
Assessment Year 2011-2012
Appeal Filed On 29-12-2014
Judgment Text
ITA NOS.596 513 514 509 510 511 512/C/14 & 446/C/15 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/ SHRI B P JAIN AM & GEORGE GEORGE K JM ITA NO 596/ COCH/2014 (A SST YEAR 20 11 - 12 ) CHEVAYUR SERVICE CO - OPERATIVE BANK LTD. CHEVARAMBALAM POST KOZHIKODE 673 017 VS THE INCOME TAX OFFICER WARD 2(1) CALICUT ( APPELLANT) (RESPONDENT) PAN NO. AAAAC1648P ASSESSEE BY SH SREEHARI ADV. REVENUE BY SHRI A DHANARAJ SR DR ITA NO 509 /COCH/2014 (A SST YEAR 2007 - 08 ) M/S. TELLICHERRY TOWN SERVICE CO - OP. BANK LTD. GOOD SHED ROAD THALASSERRY KANNUR 670 101 VS THE INCOME TAX OFFICER WARD 2 KANNUR ( APPELLANT) (RESPONDENT) PAN NO. AA DFT0635K ASSESSEE BY SMT. DIVYA RAVINDRAN ADV. REVENUE BY SHRI A DHANARAJ SR DR ITA NO 513/ COCH/2014 (A SST YEAR 2007 - 08 ) M/S. PINARAYI SERVICE CO - O P BANK LTD. PINARAYI THALASSERRY KANNUR - 670741 VS THE INCOME TAX OFFICER WARD 2 KANNUR RANGE KANNUR ( APPELLANT) (RESPONDENT) PAN NO. AAJFP7993E ASSESSEE BY SMT. DIVYA RAVINDRAN ADV. REVENUE BY SHRI A DHANARAJ SR DR ITA NOS.596 513 514 509 510 511 512/C/14 & 446/C/15 2 ITA NO 511 /COCH/2014 (A SST YEAR 2007 - 08 ) M/S. PUNNOL SERVICE CO - OP. BANK LTD. KURICHIYIL THALASSERRY KANNUR - 670102 VS THE INCOME TAX OFFICER WARD 2 KANNUR RANGE KANNUR ( APPELLANT) (RESPONDENT) PAN NO. AAGFP3042D ASSESSEE BY SMT. DIVYA RAVINDRAN ADV. REVEN UE BY SHRI A DHANARAJ SR DR ITA 446/COCH/2014 (A SST YEAR 2008 - 09) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 2(1) RANGE - 2 KOWDIAR PO THIRUVANANTHAPURAM VS NAVAIKULAM SERVICE CO - OP BANK LTD. ETHUKAD JN. NAVAIKULAM PO THIRUVANANTHAPURAM 695 501 ( APPELLANT) (RESPONDENT) PAN NO. AAAAN6970B ASSESSEE BY SHRI JIJO C.A ADV. REVENUE BY SHRI A DHANARAJ SR DR DATE OF HEARING 27/09/2016 DATE OF PRONOUCEMENT 28 /09/2016 ORDER PER GEORGE GEORGE K JM: THESE ARE APPEALS RESTORED TO THE TR IBUNAL BY THE HONBLE KERALA HIGH COURT VIDE JUDGMENT DATED 16.2.2016 . THESE APPEALS WERE HEARD TOGETHER SINCE COMMON ISSUE IS INVOLVED IN THESE CASES AND FACTS ARE BROADLY SIMILAR. 2 BRIEF FACTS OF THE CASE S ARE AS FOLLOWS: ITA NOS.596 513 514 509 510 511 512/C/14 & 446/C/15 3 THE ASSESSEE S IN THESE C ASES ARE PRIMARY AGRICULTURAL CREDIT SOCIETY REGISTERED UNDER THE KERALA COOPERATIVE SOCIETIES ACT 1969. IT IS ENGAGED IN THE BUSINESS OF PROVIDING AGRICULTURAL CREDIT TO ITS MEMBERS. THE CLAIM OF DEDUCTION U/S 80P (2) WAS DENIED BY THE AO FOR THE REASON THAT THE ASSESSEE IS PRIMARILY ENGAGED IN THE BUSINESS OF BANKING AND IN VIEW OF SECTION 80P(4) OF THE ACT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80P(2) OF THE ACT. 3 AGGRIEVED BY THE ASSESSMENT THE ASSESSEE S 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 S PREFERRED APPEA LS TO THE TRIBUNAL. THE TRIBUNAL DISPOSED OFF THE APPEAL S OF THE ASSESSEE HOLDING THAT THE ASSESSEE WAS NOT ENT ITLED TO THE BENEFIT OF DEDUCTION U/S 80P 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 RESTORED THE MATTER TO THE TRI BUNAL. IT IS IN THIS CONTEXT THE CASE WAS HEARD ON 2 7 TH SEPT 2016. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE HONBLE HIGH COURT HAD HELD THAT THE TRIBUNAL WAS NOT JUSTIFIED IN DENYING THE BENEFIT OF EXEMPTION U/S 80P OF THE ACT. THE HONBLE HIGH COURT WAS CONSIDERING THE FOLLOWING SUBSTANTIAL QUESTION OF LAW: ITA NOS.596 513 514 509 510 511 512/C/14 & 446/C/15 4 A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE UNDER CONSIDERATION THE TRIBUNAL IS CORRECT IN LAW IN DECIDING AGAINST THE ASSESSEE THE ISSUE REG ARDING ENTITLEMENT FOR EXEMPTION UNDER SECTION 80P IGNORING THE FACT THAT THE ASSESSEE IS A PRIMARY AGRICULTURAL CREDIT SOCIETY? 6.1 IN CONSIDERING THE ABOVE SUBSTANTIAL QUESTION OF LAW THE HONBLE HIGH COURT RENDERED THE FOLLOWING FINDINGS: 15. APPELL ANTS IN THESE DIFFERENT APPEALS ARE INDISPUTABLY SOCIETIES REGISTERED UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT 1969 FOR SORT KCS ACT AND THE BYE - LAWS OF EACH OF THEM AS MADE AVAILABLE TO THIS COURT AS PART OF THE PAPER BOOKS CLEARLY SHOW THAT THEY HAVE BEEN CLASSIFIED AS PRIMARY AGRICULTURAL CREDIT SOCIETIES BY THE COMPETENT AUTHORITY UNDER THE PROVISIONS OF THAT ACT. THE PARLIAMENT HAVING DEFINED THE TERM 'CO - OPERATI VE SOCIETY' FOR THE PURPOSES OF THE BR ACT WI TH REFERENCE TO AMONG OTHER THINGS THE REGISTRATION OF A SOCIETY U N DER ANY STATE LAW RELATING TO CO - OPERATIVE SOCIETIES FOR THE TIME BEING; IT CANNOT BUT BE TAKEN THAT THE PURPOSE OF THE SOCIETIES SO REGISTERED UNDER THE STATE LAW AND ITS OBJECTS HAVE TO BE UNDERSTOOD AS THOSE WHICH HAVE B EEN APPROVED BY THE COMPETENT AUTHORITY UNDER SUCH STATE LAW. THIS WE VISUALISE AS DUE RECIPROCATIVE LEGISLATIVE EXERCISE BY THE PARLIAMENT RECOGN I SING THE PREDOMINANCE OF DECISIONS RENDERED UNDER THE RELEVANT STATE LAW. IN TH I S VIEW OF THE MATTER ALL TH E APPELLANTS HAV I NG BEEN CLASSIFIED AS PRIMARY AGRICULTURAL CRED I T SOC I ET I ES B Y THE COMPETENT AUTHOR I TY UNDE R TH E KCS ACT I T HAS NECESSAR IL Y TO BE HELD THAT THE PRINCIPAL OBJECT OF SUCH SOCIETIES IS TO UNDERTAKE AGR I CULTURAL CREDIT ACTIVITIES AND TO PRO VIDE LOANS AND ADVANCES FOR AGRICULTURAL PURPOSES THE RATE ' OF INTEREST ON SUCH LOANS AND ADVANCES TO BE AT THE RATE FIXED BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES UNDER THE KCS ACT AND HAV I NG I TS AREA OF OPERATION CONFINED TO A VILLAGE PANCHAYAT OR A MUNICIPALITY. THIS IS THE CONSEQUENCE OF THE DEFINITION CLAUSE IN SECTION 2(OAA) OF THE KCS ACT. THE AUTHORITIES UNDER THE IT ACT CANNOT PROBE INTO ANY ISSUE OR SUCH MATTER RELATING TO SUCH APPLICANTS. 16. THE POSITION OF 1 AW BEING AS ABOVE WITH REFERENC E TO THE STATUTORY PROVISIONS THE APPELLANTS HAD SHOWN TO THE AUTHORITIES AND THE TRIBUNAL THAT THEY ARE PRIMARY AGRICULTURA L CREDIT SOCIETIES IN TERMS OF CLAUSE (CCIV) OF SECTION 5 OF THE BR ACT HAVING REGARD TO THE ITA NOS.596 513 514 509 510 511 512/C/14 & 446/C/15 5 PRIMARY OBJECT OR PRINCIPAL BUSINESS OF EACH OF THE APPELLANTS. IT IS ALSO CLEAR FROM THE MATERIALS ON RECORD THAT THE BYE - LAWS OF EACH OF THE APPELLANTS DO . NOT PERMIT ADMISSION OF ANY OTHER CO - OPERATIVE SOCIETY AS MEMBER EXCEPT MAY BE IN ACCORDANCE WITH THE PROVISO TO SUB - CLAUSE 2 OF SEC TION 5(CCIV) OF THE BR ACT. THE DIFFERENT ORDERS OF THE TRIBUNAL WHICH ARE IMPEACHED IN THESE APPEALS DO NOT CONTAIN ANY FINDING OF FACT TO THE EFFECT THAT THE BYE - 1AWS OF ANY OF THE APPELLANT OR ITS CLASS I FICATION BY THE COMPETENT AUTHORITY UNDER THE KCS ACT LS ANYTHING DIFFERENT FROM WHAT WE HAVE STATED HEREIN ABOVE. FOR THIS REASON IT CANNOT BUT BE HELD THAT THE APPELLANTS ARE ENTITLED TO EXEMPTION FROM THE PROVISIONS OF SECTION 80P OF THE IT ACT BY VIRTUE OF SUB - SECTION 4 OF THAT SECT; ON. IN THIS VIEW OF THE MATTER THE APPEALS SUCCEED. 17. IN THE LIGHT OF THE AFORESAID WE ANSWER SUBSTANTIA 1 QUESTION 'A' IN FAVOUR OF THE APPELLANTS AND HOLD THAT THE TRIBUNAL ERRED IN LAW IN DECIDING THE ISSUE REGARDING THE ENTITLEMENT OF EXEMPT ION UNDER SECTION 8 0P AGAINST THE APPELLANTS. WE HOLD THAT THE PRIMARY AGRICULTURAL CREDIT SOCIETIES REGISTERED AS SUCH UNDER THE KCS ACT; AND CLASSIFIED SO UNDER THAT ACT INCLUDING THE APPELLANTS ARE ENTITLED TO SUCH EXEMPTION. 6.2 IN THE INSTANT CASE S THE ASSESSEE S ARE 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 I N ASSESSEES OWN CASE S AND OTHER BATCH OF CASES HAD HELD THAT PRIMARY AGRICULTURAL CREDIT SOCIETY REGISTERED UNDER THE KERALA 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 S ARE PRIMARY AGRICULTURAL CREDIT SOCIETY WE HOLD THAT THE ASSESSEE S ARE ENTITLED TO THE BENEFIT OF DEDUCTION U/S 80P(2) OF THE ACT. ITA NOS.596 513 514 509 510 511 512/C/14 & 446/C/15 6 7 NO OTHER ISSUES WERE ARGUED BY THE LD COUNSEL FO R THE ASSESSEE DURING THE COURSE OF HEARING OF THIS APPEAL. 8 IN THE RESULT THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED AND THAT OF REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF SEPT 2016 . SD/ - SD/ - (B P JA IN) (GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 28 TH SEPT 2016 VM SR.PS COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT COCHIN