The Rangas Co-op Agricultural Service Society Ltd., Rangas v. ITO, Hamirpur

ITA 649/CHANDI/2019 | 2012-2013
Pronouncement Date: 26-03-2021 | Result: Allowed

Appeal Details

RSA Number 64921514 RSA 2019
Assessee PAN AABAT1344E
Bench Chandigarh
Appeal Number ITA 649/CHANDI/2019
Duration Of Justice 1 year(s) 10 month(s) 20 day(s)
Appellant The Rangas Co-op Agricultural Service Society Ltd., Rangas
Respondent ITO, Hamirpur
Appeal Type Income Tax Appeal
Pronouncement Date 26-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 26-03-2021
Date Of Final Hearing 18-03-2021
Next Hearing Date 18-03-2021
Last Hearing Date 20-01-2021
First Hearing Date 14-10-2020
Assessment Year 2012-2013
Appeal Filed On 06-05-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BE NCH SMC CHANDIGARH !' # BEFORE: SMT. DIVA SINGH JM ./ ITA NO. 649/CHD/2019 / ASSESSMENT YEAR : 2012-13 THE RANGAS CO-OPERATIVE AGRICULTURAL SERVICE SOCIETY LTD. RANGAS TEHSIL NADAUN HAMIRPUR. THE ITO HAMIRPUR (HP). ./ PAN NO: AABAT1344E / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI ALOK KRISHAN C.A. ! / REVENUE BY : SHRI ASHOK KHANNA ADDL. CIT ' # $/ DATE OF HEARING : 18.03.2021 %&'( $/ D ATE OF PRONOUNCEMENT : 26.03.2021 HEARING CONDUCTED VIA WEBEX $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE WHEREIN THE CORRECTNESS OF THE ORDER DATED 19.02.2019 OF CIT(A) PALAMPUR PERTAINING TO 2012-13 ASSESSMENT YEAR IS ASSAILED ON THE FOLLO WING GROUNDS : 1. THAT THE COMMISSIONER OF INCOME TAX (APPEAL) HAS ER RED IN LAW AND FACTS BY DISALLOWING THE DEDUCTION UNDER SECTION 80P(4) OF T HE INCOME TAX ACT 1961 BY DEFINING IT AS A PRIMARY CO-OPERATIVE BANK. 2. THAT THE CO-OPERATIVE SOCIETY IS ENGAGED IN 'CARRYI NG ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS' WHIC H QUALIFIES THE PROVISION FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) AND 80P(2)(D). 3. THAT THE COMMISSIONER OF INCOME TAX (APPEAL) IS NOT JUSTIFIED IN DISALLOWING THE AMOUNT OF RS. 14 19 668/- BY IGNORING THE PROVISION S OF 80P. 4. THAT THE IMPUGNED DEMAND AND ORDER IS VOID-AB-INITI O IS LIABLE TO BE QUASHED AND SHOULD NOT BE INSISTED UPON. 5. THAT THE APPELLANT CRAVES TO ADD AMEND ALTER OR W ITHDRAW ANY GROUND OR GROUND OF APPEAL. 6. THAT STAY SHOULD BE GRANTED FOR RECOVERY DURING PEN DENCY OF APPEAL. ITA 649/CHD/2019 A.Y. 2012-13 PAGE 2 OF 4 2. IN THE FACTS OF THE PRESENT CASE LD. AR SUBMITT ED THAT THERE HAVE BEEN FACTUAL INACCURACIES TAKEN INTO CONSIDERATION BY THE TAX AUTHORITIES AS A RESULT OF WHICH THE ASSESSEE SOCIETY HAS BEEN TAKEN TO BE AKIN TO BE A BANKING CO-OPERATIVE SOCIETY WHICH IS NOT THE CAS E. IN THE FACTS OF THE PRESENT CASE THE ASSESSEE SOCIETY IS NOT ENGAGED I N THE BANKING ACTIVITIES. IT WAS SUBMITTED THAT FOR ENGAGING IN BANKING ACTIVITIES AND ACCEPTING DEPOSITS ETC. IT IS MANDATORY THAT A LICE NSE IS TO BE OBTAINED FROM THE RBI. NO SUCH LICENSE OR APPLICATION FOR O BTAINING IT IS AVAILABLE ON RECORD. IT WAS HIS SUBMISSION THAT THE ASSESSEE WAS REPRESENTED BY A COUNSEL WHO WAS NOT FULLY ALIVE TO THE FACTS OF THE CASE AND THE ASSESSEE HAS SUFFERED ON ACCOUNT OF THE REASON THAT CORRECT FACTS COULD NOT BE BROUGHT ON RECORD ON ACCOUNT OF THIS REASON. ACCOR DINGLY RELYING UPON SUBMISSIONS ADVANCED IN ITA 648/CHD/2019 WHEREIN AL SO SIMILAR FACTUAL CONFUSION PREVAILED A PRAYER FOR REMAND BA CK OF THE ISSUE TO THE FILE OF THE CIT(A) FOR ENABLING THE ASSESSEE TO BRI NG ON RECORD THE CORRECT AND TRUE FACTS WAS MADE. 3. CONSIDERING THE FACTS AND THE SUBMISSIONS THE S AID REQUEST WAS NOT OBJECTED TO BY THE LD. SR.DR. 4. IN THE FACTS OF THE PRESENT CASE THE LD. CIT(A) HAS PASSED A NEAR IDENTICAL ORDER VIDE PARA 4.7 TO 4.11 AS IN DANGRI CO-OPERATIVE AGRICULTURAL SERVICE SOCIETY LTD. THE RELEVANT EXT RACT READS AS UNDER : 4.7 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE APPELLANT ALONG WITH JUDICIAL DECISIONS CITED ON THIS ISSUE AND FIN D THAT APPELLANT SOCIETY IS PRIMARILY ENGAGED IN SALE OF PDS AND NON-PDS ITEMS. HOWEVER IT IS NOT DENIED BY THE APPELLANT SOCIETY THAT IT IS ACCEPTING DEPOS ITS FROM NOMINAL AS WELL AS NON- ITA 649/CHD/2019 A.Y. 2012-13 PAGE 3 OF 4 MEMBERS AND GIVING FUNDS TO THEM ON INTEREST BASIS. THIS FACT HAS ALSO BEEN ACCEPTED BY THE SOCIETY BOTH AT THE STAGE OF ASSESS MENT AS WELL AS IN THE COURSE OF PRESENT PROCEEDINGS. THEREFORE I HOLD THAT APPELLA NT IS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80 P(2)(A)(I) OF THE IT ACT ON THIS INCOME. 4.8 FURTHER 1 FIND THAT HON'BLE SUPREME COURT HA S RECENTLY IN THE CASE OF CITIZEN COOPERATIVE SOCIETY LTD IN CIVIL APPEAL NUM BER 10245 OF 2017 HAS HELD THAT WHERE INTEREST HAS BEEN EARNED ON INVESTMENTS MADE BY THE SOCIETY THEN THE CLAIM OF EXEMPTION UNDER SECTION 80 P CANNOT BE ALL OWED TO THE COOPERATIVE SOCIETY WHICH IS MEANT ONLY FOR ITS MEMBERS AND PR OVIDING CREDIT FACILITIES TO ITS MEMBERS. THE CONTENTION OF THE APPELLANT THAT FUNDS WERE RECEIVED FROM THE MEMBERS HAS BEEN CONSIDERED BUT THE FACT THAT INTER EST INCOME HAS BEEN EARNED ON ACCOUNT OF INVESTMENTS MADE WITH OTHER PERSONS HAS NOT BEEN DENIED. 4.9 THUS IN VIEW OF THE ABOVE MENTIONED FACTS AN D JUDICIAL DECISIONS I HOLD THAT APPELLANT IS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80 P(2)(A)(I) OF THE IT ACT. AS REGARDS THE CLAIM OF DEDUCTION UNDER SECTION 80 P(2)(D) OF THE IT ACT IS CONCERNED AND ALSO THE SET OFF OF COST OF FUNDS AGAINST THE INTEREST INCOME EARNED IS CONCERNED I AGREE WITH THE REASONS GIVEN BY THE AO IN THE ASSESSMENT ORDER IN THE ABSENCE OF ANY CONTROVERTING FACTS BE ING BROUGHT ON RECORD BY THE APPELLANT. ACCORDINGLY I CONFIRM THE ADDITION OF R S. 14 69 668 MADE BY THE AO ON THIS ACCOUNT. 4.10 FURTHER I FIND THAT AN ADDITION OF RS. 28 605 HAS BEEN MADE BY THE AO ON ACCOUNT OF PROVISIONS MADE BY THE APPELLANT ON ACCO UNT OF NPAS. THE ADDITION WAS MADE ON THE GROUND THAT THIS PROVISION IS A CON TIGENT LIABILITY WHICH IS NOT ALLOWABLE UNDER THE IT ACT. THE APPELLANT HAS SUBMI TTED IN THE COURSE OF PRESENT PROCEEDING! THAT NPA PROVISION MADE IN THE ACCOUNTS WHICH DOES NOT CHANGE THE CHARACTER OF INCOME. IT IS SUBMITTED THAT THE PROVISION MADE ON ACCOUNT OF SAID NPAS HAS REDUCED THE EXEMPT INCOME. IT IS ALSO STAT ED THAT INCOME OF THE CO- OPERATIVE SOCIETY DEDUCTIBLE U/S 80P(2)(A)(I) AND 8 0P(2)(A)(D) SO IF THE CLAIM OF DEDUCTION OF RS.28 605 IS ALLOWED THEN DEDUCTION U/ S SOP WILL AUTOMATICALLY BE INCREASED BY THIS AMOUNT. 4.11 HAVING CONSIDERED THE MATERIAL AVAILABLE ON RECORD I FIND THAT AO WAS JUSTIFIED IN DISALLOWING THE CLAIM OF NPA PROVISION AS SAME IS NOT ALLOWABLE A: DEDUCTION. HOWEVER I FIND FORCE IN THE CONTENTIONS OF THE APPELLANT THAT DISALLOWANCE OF PROVISION MADE ON ACCOUNT OF NPAS W ILL ENHANCE THE CLAIM OF DEDUCTION U/S SOP (2)(A) OF THE IT ACT. THE AO IS B EING DIRECTED TO RE-COMPUTE THE INCOME OF THE APPELLANT AFTER ALLOWING THE DEDUCTIO N U/S 80 P (2)(A) OF THE IT ACT. 4.1 SINCE AS PER ASSESSEE'S UNCONTESTED PLEA TH E CORRECT FACTS COULD NOT BE BROUGHT ON RECORD THE ABOVE DECISION IS SET ASIDE. IT IS NOTICED THAT IN THE FACT THERE IS NO DISCUSSION ON WHAT AR GUMENTS IF ANY WERE ADVANCED BEFORE THE CIT(A). ACCORDINGLY CONSIDERI NG THE SUBMISSIONS ADVANCED ON BEHALF OF THE PARTIES THE ISSUES ARE R ESTORED BACK AND THE ITA 649/CHD/2019 A.Y. 2012-13 PAGE 4 OF 4 IMPUGNED ORDER IS SET ASIDE BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO THE ASSESSEE TO PLACE FULL AND COMPLET E FACTS BEFORE THE SAID AUTHORITY IN ORDER TO ENSURE THE PASSING OF AN ORDE R ON MERITS OF THE CASE. IT IS MADE CLEAR THAT THE OPPORTUNITY SO PRO VIDED TO THE ASSESSEE SHOULD NOT BE ABUSED AND FULL AND PROPER COMPLIANCE BE MADE BEFORE THE SAID AUTHORITY. SAID ORDER WAS PRONOUNCED AT THE T IME OF VIRTUAL HEARING ITSELF IN THE PRESENCE OF THE PARTIES VIA WEBEX. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 26 TH MARCH 2021. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. / DR ITAT CHANDIGARH 6. / GUARD FILE / BY ORDER / ASSISTANT REGISTRAR