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Facts
The appellant, a primary agricultural co-operative society, claimed Nil income after deduction under Section 80P, but the AO denied it. The CIT(A) subsequently allowed Section 80P deduction for income from members but denied it for income from non-members. Aggrieved, the appellant approached the ITAT with grounds relating to disallowances for gratuity provision under Section 40A(7) and the consequential tax demand.
Held
The ITAT dismissed the appeal, holding that the grounds raised by the assessee did not emanate from the CIT(A)'s order and were not part of the subject matter of appeal before the CIT(A). The Tribunal observed that the remedy for any grievance arising from a consequential order would lie elsewhere, thus deeming the grounds not maintainable.
Key Issues
Whether the grounds of appeal concerning disallowances under Sections 40A(7) and 36(1)(viii) and the related tax demand were maintainable before the ITAT, given that they did not arise from the CIT(A)'s order and the primary issue before CIT(A) was the eligibility for deduction under Section 80P for income from non-members.
Sections Cited
80P, 143(3), 40A(7), 36(1)(viii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Year: 2018-19 Vellanikkara Service Co-op. Bank Ltd. .......... Appellant Madakathara, Thrissur 680651 [PAN: AAAAV7463M] vs. The Income Tax Officer .......... Respondent Ward - 2(1), Thrissur Appellant by: ------- None ------- Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 17.01.2025 Date of Pronouncement: 23.01.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 22.08.2023 for Assessment Year (AY) 2018-19.
The appellant is a primary agricultural co-operative society registered under the Kerala State Co-operative Societies Act, 1969. The appellant filed the return of income for AY 2018-19 on 27.10.2018 declaring Nil income after claiming deduction u/s. 80P of the Income Tax Act, 1961 (the Act) of Rs. 3,99, 21,348/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward -2(1), Thrissur (hereinafter called "the AO") vide order dated 03.03.2021 passed u/s. 143(3) of the Act at a
Being aggrieved, an appeal was filed before the CIT(A), who vie order dated 22.08.2023 allowed the claim u/s. 80P of the Act following the judgement of the Hon'ble Supreme Court in the case Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 431 ITR 1 (SC). However, he proceeded to hold that the income generated from the services rendered to non-members would not be eligible for deduction u/s. 80P of the Act.
Being aggrieved, the appellant filed the present appeal raising the following grounds of appeal: -
1. With reference to the Ld. AO's order Giving Effect to the Honorable Commissioner of Income Tax (Appeals)' Order, pertaining to Appeal No. NFAC/2017-18/10051763, dated 22.08.2023, we submit that there has been an erroneous interpretation and application of the statutory provisions.
2. That the addition to income has been made on account of disallowance made u/s 40A(7) of the Act for an amount to the tune of Rs. 12,50,000/-reported as provision for Gratuity as per the Statutory Audit Report issued by the Department of Co- operation, Govt. of Kerala.
3. That the Appellant confirms that they had already disallowed the said amount though inadvertently u/s 36(1) (viii) of the Act instead of the actually applicably Section 40A(7) of the Act. In this regard, the Appellant further confirms that they are in possession of the relevant computation statement, ITR filed & Statutory Audit Report for substantiating the said claim.
Vellanikkara Service Co-op. Bank Ltd.
4. Hence it may be reasonably inferred that the Appellant had disallowed the same voluntarily and no further disallowance as proposed by the Ld. AO is required.
The Appellant based on the submissions made herein, prays that the addition & tax demanded amounting to Rs. 12,50,000/- & Rs. 6,03,532/-respectively, made by the AO be deleted.”
5. The above grounds raised by the assessee neither emanate from the order of the learned CIT(A) nor form part of subject matter of appeal before the CIT(A). If the assessee is aggrieved by the consequential order passed to the CIT(A)’s order, the remedy lies somewhere else and, therefore the grounds raised by the appellant are dismissed as not maintainable.
In the result, appeal filed by the assessee is dismissed.