INCOME-TAX OFFICER, WARD - 1(2), NASHIK vs. NASHIK DISTRICT LABOUR SOCIETY CO-OP FEDERATION LTD, NASHIK

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ITA 1808/PUN/2017Status: DisposedITAT Pune21 August 2018AY 2014-153 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeal filed by the Revenue was not maintainable due to low tax effect, as it was below the monetary limit prescribed by CBDT Circular No. 3/2018. Therefore, the appeal was dismissed without going into the merits of the case.

What were the facts?

The Revenue appealed against the CIT(A)'s order allowing exemption to the assessee society under section 80P(2)(a)(vi). The AO had disallowed the exemption and made additions, but the CIT(A) deleted them. The assessee is a cooperative society and a federation of primary societies.

What were the issues?

Whether the assessee society, being a federation, is eligible for deduction under Section 80P(2)(a)(vi) and whether the appeal is maintainable due to low tax effect.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(vi)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI D.KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM

For Appellant: Shri Rajesh Gawli
For Respondent: Shri Harshal A. Nasikkar
Hearing: 21.08.2018Pronounced: 21.08.2018

आदेश / ORDER

PER D. KARUNAKARA RAO, AM

This appeal is filed by the Revenue against the order of CIT(A)-1, Nashik, dated 12-05-2017 for the A.Y. 2014-15.

2.

Grounds raised by the Revenue are extracted below :

“1. Whether the facts and in the circumstance of the case, the Ld.CIT(A)-1, Nashik was justified in allowing exemption from Income-Tax to the assessee society u/s.80P(2)(a)(vi) of the Income Tax Act, 1961 even

2 ITA No.1808/PUN/2017 Nashik District Labour Society Co-op. Federation Ltd.,

though the assessee society is a federation of primary societies which only supervises and co-ordinates the affairs of its members and cannot be said to be engaged in the collective disposal of the labour of its members within the meaning of section 80P(2)(a)(vi) of the I.T. Act, 1961.

2.

Whether in the facts and in the circumstances of the case, the Ld.CIT(A)-1, Nashik was justified in holding that the assessee was engaged in the collective disposal of the labour of its members when there is no individual who is member of the Assessee Society.”

3.

Briefly stated relevant facts includes that the assessee is a

Cooperative society and filed its return of income declaring total income

at Nil after claiming deduction under Chapter-IVA. In the assessment,

AO disallowed Rs.1,29,58,975/- u/s.80P(2)(a)(vi) of the Act. AO also

made addition of Rs.6,81,493/- on account of expenditure incurred by

the assessee in respect of Prawas Sancalak, Prasiddhi and Printing and

Stationary. Eventually, the AO assessed the income of the assessee at

Rs.36,55,180/- as against Nil income returned by the assessee. In the

First Appellate proceedings, the CIT(A) deleted both the additions made

by the AO relying on the decision of Pune Bench of the Tribunal in the

assessee’s own case for the A.Yrs. 2006-07, 2008-09 and 2009-10.

Aggrieved with the order of CIT(A), the Revenue is in appeal before us

with the grounds referred above.

4.

At the outset, Ld. AR for the assessee submitted that the appeal

filed by the Department is liable to be dismissed on account of low tax

effect. The Ld. AR pointed that as per CBDT Circular No.3/2018 dated

11th July, 2018, the monetary limit for filing of appeal by the Department

before the Tribunal is Rs.20 Lakhs, therefore, the appeal filed by the

Department is not maintainable.

5.

On the other hand, the Ld. DR for the Revenue defended the

assessment order and prayed for reversing the findings of the CIT(A).

3 ITA No.1808/PUN/2017 Nashik District Labour Society Co-op. Federation Ltd.,

However, the Ld. DR fairly admitted that the tax effect in the present appeal is less than Rs.20 Lakhs.

6.

Both sides heard. On going through the facts of the case and the orders of the Revenue, the total tax effect involved in the present appeal is undisputedly less than Rs. 20 Lakhs. The CBDT circular No.3/2018 dated 11th July, 2018 raised the monetary limit of tax effect for filing of appeal by the Department before the Tribunal to Rs.20 Lakhs. The circular applies to the pending appeals of the Department before the Tribunal too. Thus, in view of the CBDT circular, we are of the opinion that the present appeal of the Revenue is liable to be dismissed on account of low tax effect without going into the merits of the case.

7.

In the result, the appeal of the Revenue is dismissed.

Order pronounced on 21st day of August, 2018. Sd/- Sd/-

(िवकास अव#थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �ाियक सद�/JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER पुणे / Pune; िदनांक / Dated : 21st August, 2018. Satish

आदेश की +ितिलिप अ-ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��थ� / The Respondent. 2. 3. The CIT (Appeals)-1, Nashik 4. The Pr. CIT-1, Nashik एक-सद�य सद�य सद�य” ब"च, सद�य िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “एक 5. एक एक पुणे / DR, ITAT, “SMC” Bench, Pune. गाड% फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER,

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune

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