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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI C.N. PRASAD, HONBLE
O R D E R PER C.N. PRASAD (JM) 1. These two appeals are filed by the assessee against the common order of the Learned Commissioner of Income Tax (Appeals)–33, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 12.03.2018 for the A.Ys. 2010-11 & 2011-12.
The assessee in both these appeals challenged the order of the Ld.CIT(A) in denying the deduction u/s. 80P(2)(d) of the Act in respect of 2 & 3645/MUM/2018 Kshatriy Gadkari Maratha Cooperative Credit Society Ltd., its income. Assessee by way of additional grounds challenged the reopening of assessments u/s. 147 of the Act as void abinitio, bad in law. The additional grounds are as under: - “1.1. In the facts and circumstances of the case and in law, the CIT (A) erred in partly affirming the order of the Learned Income Tax Officer, Ward - 21(2)(1), Mumbai ["the AO"] passed on 26th Nov. 2015 u/s 143(3) r.w.s.147 of the Act by: - (i) not quashing the reassessment proceedings continued even after learned AO accepted after verification, the contentions of the appellant- society about incorrect reasons being recorded for reopening of the assessment by his predecessor. (Refer Para 6 on Page 2 of the assessment order) (ii) allowing the reopening of assessment u/s. 147, which is void ab initio and bad in law, done on the basis of change of opinion about the eligibility of the appellant to claim deductions u/s 80-P, though it was already verified in the original assessment order passed on 19th Oct. 2012. 1.2. The Appellant prays that the addition made by the AO and affirmed by the CIT (A) be deleted.”
Ld. Counsel for the assessee submitted that the grounds raised challenging the order of the Assessing Officer in reopening the assessments are purely legal grounds, the same may be admitted and disposed off.
On hearing both the sides and perusing the additional grounds it is observed that the additional grounds raised by the assessee are purely legal grounds and hence the same are admitted for adjudication following the decision of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. v. CIT [229 ITR 383].
Ld. Counsel for the assessee submits that, the assessments for the A.Ys. 2010-11 & 2011-12 were originally completed u/s. 143(3) of the Act
3 & 3645/MUM/2018 Kshatriy Gadkari Maratha Cooperative Credit Society Ltd., on 19.10.2012 and 20.12.2013 respectively accepting the income returned by the assessee wherein assessee has claimed deduction u/s.80P of the Act in respect of its income. Ld. Counsel for the assessee referring to the assessment orders passed u/s. 143(3) of the Act submits that it is the finding of the Ld. Assessing Officer that the assessee is a cooperative society engaged in the business of providing credit facilities to its members only. Referring to Page No. 29 of the Paper Book the reasons for reopening the assessment, Ld. Counsel for the assessee submits that the assessments were reopened on the presumption that the assessee has claimed deduction u/s. 36(i)(viia)(b) of the Act and this deduction can only be claimed by a scheduled bank or non-scheduled bank or cooperative bank and therefore Assessing Officer was of the belief that assessee is not eligible for deduction u/s. 80P of the Act. Ld. Counsel for the assessee referring to Page No. 2 of the Paper Book which is the computation of total income submits that the assessee never claimed such deduction u/s.36(i)(viia)(b) as alleged by the Assessing Officer in his reasons. Referring to Page No. 2 of the re-assessment order passed u/s. 143(3) r.w.s. 147 of the Act, Ld. Counsel submits that this fact was also accepted by the Assessing Officer. Therefore, Ld. Counsel for the assessee submits that the very reason for reopening the assessment was only on a wrong assumption that the assessee had claimed provision
4 & 3645/MUM/2018 Kshatriy Gadkari Maratha Cooperative Credit Society Ltd., for doubtful debt u/s. 36(i)(viia)(b) of the Act and which deduction can only be claimed by a scheduled bank or non-scheduled bank or cooperative bank and since the assessee has claimed such deduction the Assessing Officer assumed that assessee is not a cooperative society but a cooperative bank. He submits that since the very basis for reopening of assessment is wrong and factually incorrect, it is only a reason to suspect and not a reason to believe that the income had escaped assessment and therefore the reopening of assessment is bad in law.
Ld. Counsel for the assessee further submitted that nothing has come on record to suggest that the income had escaped assessment and the reasons recorded were only based on the assessment records and on a wrong assumption of facts. When the Assessing Officer completed assessment u/s. 143(3) of the Act, the Assessing Officer examined the business activities of the assessee and given a finding that the assessee is a cooperative society engaged in the business of providing credit facilities to its members only and allowed the claim for deduction u/s. 80P of the Act of the assessee. In the reasons recorded there is nothing to suggest that assessee is not a cooperative society engaged in the business of providing credit facilities to its members but was engaged in the banking activities with public at large and therefore assessee is a cooperative bank.
5 & 3645/MUM/2018 Kshatriy Gadkari Maratha Cooperative Credit Society Ltd., 7. On merits the Ld. Counsel for the assessee submits that the issue is covered in favour of the assessee by the decision of the Hon'ble Bombay High Court in the case of CIT v. Shri Kulswami Co-op. Credit Society Ltd., in ITA.No. 1682 of 2014 dated 20.03.2017 and the decisions of the Coordinate Bench in the case of Kalindas Udyog Bhavan Premiss Co-op. Society Ltd., v. ITO in ITA.No. 6547/Mum/2017 dated 25.04.2018 and ITO v. M/s. Abhaylaxmi Co-op. Credit Society Ltd., in ITA.No. 1525/Mum/2017 dated 31.07.2017.
Ld. DR submits that this ground is not raised by the assessee before lower authorities but raised only before the ITAT for the first time. However, the Ld. Counsel for the assessee submitted that submissions have been made before the Ld.CIT(A) against reopening of assessments u/s. 147 of the Act.
Heard rival submissions, perused the orders of the authorities below. As far as the reopening of assessments u/s. 147 of the Act are concerned as this ground has been raised before the Tribunal for the first time without raising such ground either before the Assessing Officer or before the Ld.CIT(A), I restore this issue to the file of the Ld.CIT(A) for adjudication. Thus, the issues in appeals for the A.Ys. 2010-11 & 2011- 12 i.e. both the technical ground and the ground on merits are restored to 6 & 3645/MUM/2018 Kshatriy Gadkari Maratha Cooperative Credit Society Ltd., the file of the Ld.CIT(A) for denovo adjudication. Assessee shall be given reasonable opportunity of being heard.
In the result, appeals of the assessee are allowed for statistical purpose.
Order pronounced in the open court on the 26th April, 2019