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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI ARUN KUMAR GARODIA & SHRI LALIET KUMAR
M/s. Vijaya Souharda Credit Sahakari Ltd., The Income Tax Officer, Nirani Sugars Enclave, Ward – 2, vs. Vijaya Nagar, Bagalkot. Tq: Mudhol, Dist: Bagalkot. PAN: AAHFV0308H APPELLANT RESPONDENT Appellant by : Shri R.N. Siddappaji, Addl. CIT (DR) Respondent by : Shri Chaitanya V. Mudrabettu, Advocate Date of hearing : 27.11.2018 Date of Pronouncement : 31.12.2018 O R D E R Per Shri A.K. Garodia, Accountant Member Both these appeals are filed by the revenue and these are directed against two separate orders of ld. CIT(A)-Belagavi both dated 07.03.2018 for Assessment Years 2012-13 and 2013-14. Both these appeals were heard together and are being disposed of by way of this common order for the sake of convenience.
The grounds raised
by the revenue for Assessment Year 2012-13 in are as under. “1. In the facts and circumstances of the case, the CIT(Appeals) erred in admitting additional evidence in the form of Affidavit in contravention of Rule 46A since the Assessing Officer was not provided with an opportunity to examine the contents of the Affidavit filed by the assessee.
2. In the facts and circumstances of the case, the CIT(Appeals) erred in accepting as correct the affidavit of the assessee society without examining the Balance-sheet wherein, the category of members dealt with by the assessee society clearly indicated that the assessee is not doing business with members alone.
3. The ld CIT(A) in the facts and circumstances of the case of Hon'ble Apex Court ought to have called for remand report in regard to whether the assessee is a cooperative society meant for its members ITA Nos. 1821 & 1822/Bang/2018 Page 2 of 4 only and whether any income was earned by way of investment/loans etc to non-members 4. The ld.CIT(A) erred in not applying the ratio of the decision of Hon'ble Supreme Court in the case of Citizen Co-op Society Ltd, Hyderabad v. ACIT, C-9(1), Hyderabad in Civil Appeal No.10245 of 2017 (Arising out of SLP (C) No.20044 of 2015) dated 8.08.2017 since the assessee is also catering to the category of members called associate members which is not akin to regular member.
5. The ld.CIT(A) erred in coming to the conclusion that the assessee society is a co-operative society meant only for its members and eligible for deduction under section 80P(2)(a)(i) ignoring the ratio laid down by the Hon'ble Apex Court in the case of Citizen Co-op Society Ltd.
6. For these and other grounds that may be urged at the time of hearing, the order of the learned CIT(Appeals) may be set aside and that the order of the Assessing Officer be restored.”
Similarly, the grounds raised
by the revenue for Assessment Year 2013-14 in are as under. “1. In the facts and circumstances of the case, the CIT(Appeals) erred in admitting additional evidence in the form of Affidavit in contravention of Rule 46A since the Assessing Officer was not provided with an opportunity to examine the contents of the Affidavit filed by the assessee.
2. In the facts and circumstances of the case, the CIT(Appeals) erred in accepting as correct the affidavit of the assessee society without examining the Balance-sheet wherein, the category of members dealt with by the assessee society clearly indicated that the assessee is not doing business with members alone.
3. The Id CIT(A) in the facts and circumstances of the case of Hon'ble Apex Court ought to have called for remand report in regard to whether the assessee is a cooperative society meant for its members only and whether any income was earned by way of investment/loans etc to non-members.
4. The Id.CIT(A) erred in not applying the ratio of the decision of Hon'ble Supreme Court in the case of Citizen Co-op Society Ltd, Hyderabad v. ACIT, C-9(1), Hyderabad in Civil Appeal No.10245 of 2017 (Arising out of SLP (C) No.20044 of 2015) dated 8.08.2017 since the assessee is also catering to the category of members called associate members which is not akin to regular member.
5. The ld.CIT(A) erred in coming to the conclusion that the assessee society is a co-operative society meant only for its members and eligible for deduction under section 80P(2)(a)(i) ignoring the ratio ITA Nos. 1821 & 1822/Bang/2018 Page 3 of 4 laid down by the Hon'ble Apex Court in the case of Citizen Co-op Society Ltd.
6. For these and other grounds that may be urged at the time of hearing, the order of the learned CIT(Appeals) may be set aside and that the order of the Assessing Officer be restored.”
At the very outset it was submitted by ld. DR of revenue that in the present case, the assessee is a Souharda Credit Sahakari Ltd. and as per the Tribunal order rendered in the case of M/s. Udaya Souharda Credit Co- operative Society Ltd. Vs. ITO in dated 17.08.2018, it was held by the Tribunal that since no certificate of registration was placed before the Tribunal in the name of Udaya Souhardha Credit Co-operative Society Ltd., the Tribunal was unable to understand how the assessee can claim it to be the co-operative society in the absence of proper registration under the Karnataka Co-operative Societies Act. He pointed out that in that case, the matter was restored back to the file of AO to reexamine all relevant aspects by making necessary enquiry and investigation and also by passing a reasoned order in this regard. He submitted a copy of this Tribunal order and pointed out that para 13 of this Tribunal order is relevant. The ld. AR of assessee supported the order of CIT(A).
We have considered the rival submissions. First of all, we reproduce Para no. 13 of this Tribunal order rendered in the case of Udaya Souharda Credit Co-operative Society Ltd. Vs. ITO (supra). The same is as under. “13. We have also carefully perused the cause title in the assessment order and in the cause title of the assessment order, we find that assessment order was passed in the name of Udaya Souharda Credit Co-operative Society Ltd., whereas no certificate of registration was placed before us in the name of Udaya Souhardha Credit Co-operative Society ltd. Therefore, we are unable to understand how the assessee can claim it to be the co- operative society in the absence of proper registration under the Karnataka Co-operative Societies Act. Creation of Co-operative Society under the co-operative societies Act is doubtful. Thus the claim of deduction under section 80P cannot be allowed. As per the provisions of section 80P of the Act, deduction can only be allowed to the co-operative societies registered under the co- operative societies Act. Without a proper registration under co- operative societies Act, nobody can claim it to be co-operative society as the activities of the co-operative societies are to be controlled under the co-operative societies Act through Registrar & 1822/Bang/2018 Page 4 of 4 of the Cooperative Societies. Since all these new points have been raised during the course of hearing before us and according to us all these points goes to the root of the case, we are of the view that proper adjudication of the issues is required by the AO. We accordingly set aside the order of the CIT (A) and restore the matter to the AO to reexamine all these aspects by making necessary enquiry and investigation and also by passing a reasoned order in this regard. Since we have restored the matter to the AO, we find no justification to adjudicate the issue raised on merit. Accordingly, order of the CIT (A) is set aside and matter is restored to the AO for adjudication of the impugned issue in terms indicated above.”
We find that in the present case also, the name of assessee is Vijaya Souharda Credit Sahakari Ltd. and no certificate of registration was placed before us in the name of the assessee society. Hence, we find that the facts of the present case and that case are similar and therefore, respectfully following this Tribunal order, we set aside the order of CIT (A) in both years and restore the matter back to the file of AO in both years for fresh decision with similar directions as were given by Tribunal as per para 13 reproduced above. In view of this decision, no adjudication is called for at the present stage on the various grounds raised by the revenue.
In the result, both the appeals filed by the revenue are allowed for statistical purposes. Order pronounced in the open court on the date mentioned on the caption page.