Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “SMC-A” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV
Per Sunil Kumar Yadav, Judicial Member
This appeal is preferred by the assessee against the order of CIT(A), interalia, on the following grounds:
1. On the facts and in the circumstances of the case, the order passed by the Learned CIT(A) is bad in law.
The learned CIT(A) failed in appreciating the fact that the appellant had rightly claimed deduction u/s 80P of the Income Tax Act of 1961. 3 The learned CIT(A) erred in appreciating the fact that the appellant is not categorized as a "Co-operative Bank or a State Co-operative Bank" and as such the appellant had not obtained any banking license or specific approvals from RBI or under The Banking Regulation Act and hence application of 80P(4) .1272/Bang/2017 Page 2 of 4
in the present case is not justified.
4. The learned CIT(A) failed to appreciate the fact that section 80P(4) is not squarely applicable in the appellant's case as the appellant is under a state law i.e. Karnataka Souhardha Act of 1997.
The learned CIT(A) erred in confirming the order of the learned Assessing Officer when there were no concrete evidences to show that the activities of the appellant falls under the banking business and mere description of "nature of business" as "Banking" in the audit reports would not be a sole factor to determine the true facts of the appellant. 6. Without prejudice, the denial of deduction u/s.80P by the learned Commissioner (A) is arbitrary and unreasonable and against the principles of natural justice. 7. The learned Commissioner (A) erred in confirming the interest u/s.234B of the Act.
For these and other grounds that may be urged at the time of hearing of the appeal the appellant prays that the appeal may be allowed.
During the course of hearing, the learned counsel for the assessee 2. contended that the issue is squarely covered by the orders of the Tribunal, thus the issue can be sent back to the AO to readjudicate the issue in the light of the judgment of jurisdictional High Court in the case of Pr.CIT Vs. Vijay Souharda Credit Sahakari Ltd., in which the matter has been restored back to the file of the AO in the light of judgment of the Apex Court in the case of Citizen Co-operative Society Limited vs. Assistant Commissioner of Income Tax in Civil Appeal No.10245/2017 disposed of on 08.08.2017.
The learned DR however agreed to the proposition of the assessee.
Having carefully examined the orders of the authorities below in the light of the rival submission, I find that in identical circumstances, the .1272/Bang/2017 Page 3 of 4 jurisdictional High Court has restored the matter back to the AO to readjudicate the issue in the light of the judgment of the Apex Court in the case of Citizen Co-operative Society Limited (supra). Relevant observation of the Hon’ble Apex Court is extracted hereunder for the sake of reference: “6. The sole substantial question of law raised by the appellants requires to be answered on the determination of the crucial question whether the respondent-assessee is a co-operative society or a co-operative bank. In the judgment referred to by the learned counsel for the revenue in the Citizen Co-operative Society Limited, supra, a categorical finding was given by the Assessing Officer that the Reserve Bank of India has itself clarified that business of the appellant does not amount to that of a co-operative bank, the appellants therefore would not come within the mischief of sub-section (4) of Section 80P. It was held that the activities of the appellants therein was to cater two distinct categories of people namely, nominal members and the ordinary members. The activities of the assessee therein was construed to be financial business contrary to the provisions of the Co-operative Societies Act. As such, it was held that, the said assessee was not entitled to deduction under Section 80P(2)(a)(i) of the Act. 7. A cursory view of the order impugned herein would indicate that no finding is forthcoming regarding the aspect of the activities carried out by the respondent-assessee, whether as a co-operative society or not. In the absence of such factual finding, the legal propositions rendered by the Hon’ble Apex Court cannot be applied. As such, we are of the considered opinion that the matter requires reconsideration by the Assessing Officer to the effect whether the respondent-assessee comes within the realm of co-operative society to get entitlement of deduction under Section 80P(2)(a)(i) of the Act. 8. Hence, we remand the matter to the Assessing Officer to answer this question and then decide the matter in the light of the judgment of the Hon’ble Apex Court in the case of Citizen Co-operative Society Limited, supra, as expeditiously as possible. Thus, without rendering any finding on the substantial question of law raised, order of the Income Tax Appellate Tribunal impugned herein, is set aside. We direct the Assessing Officer to reconsider the matter in the light of the observations aforesaid.”
In the light of the judgment of the jurisdictional High Court, I feel it proper to restore the matter to the file of the AO for readjudication of the issue afresh after affording opportunity of being heard to the assessee. .1272/Bang/2017 Page 4 of 4 5. Accordingly, I set aside the order of the CIT(A) and restore the matter to the AO in terms indicated above.
In the result, appeal of the assessee is allowed for statistical purposes.
Pronounced in the open court on 28th November, 2017.