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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Per CHANDRA POOJARI, AM:
These two appeals filed by the assessee are directed against the different orders
of the CIT(A), Kottayam for the assessment years 2014-15 and 2015-16. The
assessee has also filed Stay Petitions in S.P. Nos.30 & 27/Coch/2018.
1.1 Since the issue involved in these appeals and Stay Petitions are common in
nature, they were heard together and are being disposed of by this common order.
I.T.A. Nos. 57&40/Coch/2020 & S.P. Nos.30&27/Coch/2020
The assessee has raised the following grounds of appeals in ITA
No.57/Coch/2020:
It is respectfully submitted that the order of CIT(A) in ITA N0.314/TVM/CIT(A)/TVM/2018-19 dated 16.12.2019 dismissing the appeal for the A.Y. 2014-15 is opposed to law and facts and circumstances of the case.
The CIT(A) should have found that the issue as regards claim for deduction under section 80P(2)(d) is covered in favour of the appellant by a series of decisions relating to the assessments for years prior to A.Y. 2014- 15, not only by orders of appellate tribunal but by other relevant orders of Income Tax Appellate Tribunal, Cochin Bench and of the Division Bench of the High Court in appellant's own case. As such denial of exemption is illegal and unsustainable.
In this connection, it is respectfully submitted that the provisions of section 80P(2), 80P(2)(d), 80P(2)(a)(i) are covered in favour of the appellant as per series of judgments and order not only in the appellant’s case but in similar case as well and as such the contrary view taken by CIT (A) as per the impugned order is arbitrary and illegal and liable to be set aside.
It is respectfully submitted that similar issues are pending before Income Tax Appellate Tribunal, The High Court and the Hon'ble Supreme Court in several appeals and proceedings taken up by Co-operative Societies and banks like that of the petitioner and should be covered in favour of the petitioner in this proceedings. Therefore, the contrary view taken by the Assessing Officer in the petitioner's case cannot be justified.
It is respectfully submitted that the CIT (A) is not biased whatsoever, to come to a conclusion that the claim of the appellant was not sustainable. The CIT (A) also failed to refer to ITAT order in ITA No. 49/Coch/2019 dated 12.03.2019 in the appellant’s own case for the AY 2015-15. The Tribunal has decided in favour of the assessee regarding the deduction of claims made.
The CIT(A) has also failed in referring to para 4.3 of the order that the argument of the Ld. AR in this appeal are based on certain facts outside the Tribunal’s order. The findings are contrary and unsustainable considering the facts of the case.
The appellant humbly prays that the grounds before the CIT(A) may be considered as part of the appeal.
I.T.A. Nos. 57&40/Coch/2020 & S.P. Nos.30&27/Coch/2020
The facts of the case as narrated in ITA No.57/Coch/2020 are that the assessee
filed return of income for AY 2014-15 on 19.03.2015 declaring total income of Rs.
Nil. The assessment under section 143(3) of the I.T. Act was completed on
27.12.2016 disallowing the claim under section 8OP of the Act on the income from
business and also disallowing deduction under section 80P(2)(d) on the interest
income received from Thiruvananthapuram District Cooperative Bank Ltd.
Aggrieved by the assessment order, the assessee filed appeal before the CIT(A) and
the same was disposed by order dated 31.10.2017 by allowing the deduction under
section 80P(2)(a)(i) of the Act but upholding the assessment order on disallowance
under section 80P(2)(d) of the Act. On further appeal, the ITAT in ITA
596/Coch/2017 order dated 29.01.2018 set aside the issue of allowance of
deduction under section 80P(2)(d) of the Act to the Assessing Officer to verify
whether Thiruvananthapuram District Cooperative Bank Ltd is a Cooperative Society
and if so allow the deduction. The Assessing Officer has given appeal effect to the
same by order dated 14.11.2018 and held that the assessee is not eligible for
deduction under section 80P(2)(d) of the Act.
On appeal, the CIT(A) observed that it is not the case of the learned AR that the
Assessing Officer has not followed the directions issued by Tribunal in the order
dated 29.01.2018. The grounds of appeal raised in this appeal and the argument of
the learned AR in this appeal are based on certain facts outside the Tribunal order
dated 29.01.2018 and the same cannot be considered in the appeal against the
I.T.A. Nos. 57&40/Coch/2020 & S.P. Nos.30&27/Coch/2020
order giving effect to the said appellate order. Therefore, the CIT(A) held that there
is no merit in the arguments of the Ld. AR. As the appeal effect order passed by
the Assessing Officer vide order dated 14.11.2018 was in compliance with the
directions given in the Tribunal order for AY 2014-15, the CIT(A) held that there
was no merit in the grounds raised against the same and hence, the same were
dismissed.
Against this, the assessee is in appeal before us. The Ld. AR relied on the
grounds raised.
The Ld. DR relied on the following case laws in support of the contention that
relief not claimed in assessment proceedings cannot be granted by rectification if
there were no materials on record to support the claim.
1) Anchor Pressings (P) Ltd. vs. CIT (100 ITR 347) (All.) 2) Anchor Pressings (P) Ltd. vs. CIT (161 ITR 159) (SC) 3) Sharda Prasad vs. CIT (100 ITR 373) (All.) 4) Choksi Metal Refinery vs. CIT (107 ITR 63) (Guj.) 5) CIT vs. K.N. Oil Industries (142 ITR 13) (MP)
We have heard the rival submissions and perused the record. We find that the
order of the CIT(A) is very cryptic The plea of the assessee is that the assessee is
entitled for deduction u/s. 80P(2) and 80P(2)(a)(i) of the I.T. Act, if the assessee is
not granted deduction u/s. 80P(2)(d) of the I.T. Act. According to the Ld. AR, this
alternative claim of the assessee is to be examined by the CIT(A) by passing a
I.T.A. Nos. 57&40/Coch/2020 & S.P. Nos.30&27/Coch/2020
speaking order. In the present case, the assessee had raised these issues before
the CIT(A) vide Ground Nos. b) and c) which read as follows:
b) The Assessing Officer went wrong in its findings that the interest income received from Trivandrum District Co-operative Bank is assessable as income under other sources. The above finding is contrary to the statutory provision contained in section 80P(2)(a)(i) and hence, liable to be set aside
c) It is respectfully submitted that under section 80P(1), wherein in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section(2), they shall be deducted, in accordance with and subject to the provisions of said section, the sums specified in sub-section(2) shall be deducted from the gross total income in computing the total income of the assessee. So much so, any income referred to in sub-section(2) shall be deducted from the gross total income in computing the total income of the assessee.
7.1 As seen from the order of the CIT(A), the CIT(A) has given very cryptic
findings and not addressed the above grounds. Hence, we remit this issue to the
file of the CIT(A) for fresh consideration by passing a speaking order. Accordingly,
the grounds of appeal of the assessee are partly allowed for statistical purposes.
Thus, the appeal of the assessee in ITA No.57/Coch/2020 is partly allowed for
statistical purposes.
ITA No. 40/Coch/2020: AY 2015-16
The assessee has raised the following grounds of appeal:
It is respectfully submitted that the dismissal of appeal ITA No.630/TVM/CIT(A)TVM/M/2018-19 dated 16.12.2019 for the asst. year 2015-16 is erroneous in law and unsustainable.
The CIT(A) failed to consider that the assessing officer while giving effect to the order of the CIT(A) in ITA No.142/CIT(A)/TVM dated 27.11.2018, 5
I.T.A. Nos. 57&40/Coch/2020 & S.P. Nos.30&27/Coch/2020
passed on 18.12.2018 sustained the addition of Rs.5,58,61,604/- notwithstanding the direction of the CIT(A) as per above order dated 27.11.2018. The order giving effect was passed on 18.12.2018 and the same should be considered to be erroneous in as much as the claim for deduction of Rs.5,58,61,604/-was wrongly denied.
In the above facts and circumstances, the CIT(A) ought to have adjudicated the denial of deduction of Rs.5,58,61,604/- which was wrongly denied by the Assessing Officer vide order dated 18.12.2019.
The CIT(A) while passing the order in ITA No. 630/TVM/CIT(A)/TVM/2018- 19 erroneously found that the argument of the learned AR are based on certain facts outside the appellate order dated 27.11.2018 and the same cannot be considered in the appeal against the order giving effect to the said appellate order. The above finding is clearly erroneous and against the interest of the appellant.
The further finding is that the appeal effect order given by the assessing officer dated 18.12.2018 is in compliance with the directions given in the appellate order for 2015-16. There is no merit in the grounds raised and the same is also erroneous. The CIT (A) should have adjudicated the issue raised before him which is the result of the failure to carry out the direction of the CIT (A) and hence, adjudicated in favour of the appellant. The failure to do so has resulted in miscarriage of justice so far as the appellant is concerned.
It is also respectfully pointed out that this Hon'ble Appellate Tribunal dismissed the appeal filed by the Department against the order of the CIT (A) in ITA No. 142/CIT(A)/TVM/2017-18 dated 27.11.2018 now relied on in the appellate order and decided the issue in favour of the assessee and as such, the dispute as regards the addition of Rs.5,58,61,604/- stood decided in favour of the assessee by virtue of order in ITA Nos.48 & 49/C/2019 dated 12.3.2019 for the very same asst year of this Hon'ble Tribunal.
The facts of the case for the assessment year 2015-16 are that the Assessing
Officer disallowed deduction under section 80P(2)(d) on the interest income
received from Thiruvananthapuram District Cooperative Bank Ltd in the appeal
effect order. Vide appellate order dated 27.11.2018, the Assessing Officer was
directed to follow the directions of the ITAT in the assessee’s own case for AY 2014- 6
I.T.A. Nos. 57&40/Coch/2020 & S.P. Nos.30&27/Coch/2020
15 in ITA No. 596/Coch/2017 order dated 29.01.2018 in respect of allowance of
deduction under section 80P(2)(d) of the Act and determine the deduction allowable
for AY 2015-16. The Assessing Officer had given appeal effect for AY 2014-15 as
per the directions of the Tribunal vide order dated 14.11.2018 and held that the
assessee is not eligible to claim deduction under section 80P(2)(d) of the Act on the
interest income received from Thiruvananthapuram District Cooperative Bank Ltd.
Following the said finding in the AY 2014-15, the Assessing Officer did not allow
deduction under section 80P(2)(d) of the Act for the AY 2015-16 also in the order
giving effect to CIT(A) order. Therefore, the appeal effect order given by the
Assessing Officer for AY 2015-16 is in accordance with the decision given by CIT(A)
vide order dated 27.11.2018.
On appeal, the CIT(A) rejected the argument of the Ld. AR that the Assessing
Officer has not followed the directions issued by CIT(A) in the appellate order dated
27.11.2018. The CIT(A) observed that the argument of the Ld. AR in this appeal are
based on certain facts outside the appellate order dated 27.11.2018 and the same
cannot be considered in the appeal against the order giving effect to the said
appellate order. Therefore, the CIT(A) held that there is no merit in the arguments
of the Ld. AR. The CIT(A) held that as the appeal effect order given by the
Assessing Officer vide order dated 18.12.2018 was in compliance with the directions
given in the appellate order for AY 2015-16, there was no merit in the grounds
raised against the same and hence, the same were dismissed.
I.T.A. Nos. 57&40/Coch/2020 & S.P. Nos.30&27/Coch/2020
Against this, the assessee is in appeal before us. The Ld. AR relied on the
grounds raised.
The Ld. DR relied on the order of the lower authorities.
We have heard the rival submissions and perused the record. We find that the
order of the CIT(A) is very cryptic The plea of the assessee is that the assessee is
entitled for deduction u/s. 80P(2) and 80P(2)(a)(i) of the I.T. Act, if the assessee is
not granted deduction u/s. 80P(2)(d) of the I.T. Act. According to the Ld. AR, this
alternative claim of the assessee is to be examined by the CIT(A) by passing a
speaking order. In the present case, the assessee had raised these issues before
the CIT(A) vide Ground Nos. b), c) and d) which read as follows:
b) The Assessing Officer failed to comply with the direction of the CIT(A) and made an assessment for the interest income amounting to Rs.5,58,61,604/- in the impugned order dated 18.12.2018. The above addition is arbitrary, illegal and unsustainable.
c) It is further respectfully submitted that the Assessing Officer had no discretion in the matter of complying with the direction of the CIT(A) and should have deleted the addition of Rs.5,58,61,604/- as directed and re- computed the total income at Rs. Nil. It is respectfully submitted that the impugned order is arbitrary, illegal and unsustainable.
d) In this connection, it is also respectfully pointed out that in the own case of the appellant, the department had filed appeal in the Honourable Supreme Court but the Apex Court dismissed the appeal filed by the Department and, therefore, the judgment of the Honourable High Court survives in favour of the appellant.
I.T.A. Nos. 57&40/Coch/2020 & S.P. Nos.30&27/Coch/2020
13.1 As seen from the order of the CIT(A), the CIT(A) has given very cryptic
findings and not addressed the above grounds. Hence, we remit this issue to the
file of the CIT(A) for fresh consideration by passing a speaking order. Accordingly,
the grounds of appeal of the assessee are partly allowed for statistical purposes.
Thus, the appeal of the assessee in ITA No.40/Coch/2020 is partly allowed for
statistical purposes.
S.P. Nos. 30 & 27/Coch/2020: AY’s: 2014-15 & 2015-16
Since we have remitted the appeals of the assessee in ITA Nos.57 &
40/Coch/2020 to the file of the CIT(A) for fresh consideration, the Stay Petitions
filed by the assessee have become infrutuous and are dismissed as same.
In the result, the appeals filed by the assessee are partly allowed for statistical
purposes and the Stay Petitions filed by the assessee are dismissed as infructuous Order pronounced in the open court on 19th May, 2020.
sd/- sd/- (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER
Place: Kochi Dated: 19th May, 2020 GJ Copy to: 1. M/s. Karakulam Service Co-operative Bank Ltd., KP-1, 382, Karakulam, Nedumnagad Taluk, Trivandrum-695 564. 2. The Income Tax Officer, Ward-2(3), Trivandrum. 3. The Commissioner of Income-tax(Appeals), Trivandrum. 9
I.T.A. Nos. 57&40/Coch/2020 & S.P. Nos.30&27/Coch/2020
The Pr. Commissioner of Income-tax, Trivandrum. 5. D.R., I.T.A.T., Cochin Bench, Cochin. 5. Guard File. By Order
(ASSISTANT REGISTRAR) I.T.A.T., Cochin