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Income Tax Appellate Tribunal, ‘ D’ SMC BENCH : CHENNAI
Before: SHRI ABRAHAM P GEORGE & SHRI DUVVURU RL REDDY
आदेश / O R D E R PER ABRAHAM P GEORGE, ACCOUNTANT MEMBER
These two appeals filed by the Department are directed ,2796/CHNY/2017 :- 2 -: against orders dated 20.09.2017 & 20.09.2017 of the Commissioner of Income-tax (Appeals), Salem-7.
Grounds taken by the Revenue in both these appeals assail that the direction of the ld.CIT(A) to allow the claim of assessee for deduction u/s.80P(2)(a)(i) of the Act.
Ld. Counsel for the Revenue submitted that both the assessee’s had Nominal Members, in addition to its Shareholding Members. According to ld.D.R, the Hon’ble Apex Court in the case of Citizen’s Co-operative Society Vs. ACIT ( (2017) 397 ITR 1 had clearly held that deduction u/s.80P(2)(a)(i) of the Act could not be allowed to a Society, which was earning interest from Associate Members. As per the ld.D.R, Resident Members and Nominal Members of the assessees here were very similar to the Associate Member, and therefore, by virtue of the decision of Apex Court mentioned supra, deduction u/s.80P(2)(a)(i) of the Act could not be given to the assessees.
Contention of ld.D.R was that Ld.CIT(A) had relied on certain decisions of the Tribunal in the case of Karkudalpatty Primary Agricultural Co- operative Credit Society Ltd., Vs.ITO (ITA No.292/Mds./2014 dated 17.03.2014) and that of I.T.O Vs. S-1308 Ammapet Primary ,2796/CHNY/2017 :- 3 -:
Agricultural Co-operative Bank Ltd.,Salem (ITA No.825/Mds./2017, dated 23.09.2015) for giving relief to the assessee. As per the ld.D.R, in view of the judgement of Hon’ble Apex Court in the case of The Citizen’s Co-operative Society (supra), these decisions of above Tribunal were no more good law.
Per contra, ld.A.R strongly supporting the orders of the Ld.CIT(A) submitted that both the Assessees Societies were registered under Tamil Nadu Co-operative Societies Act, 1983 and there was no distinction between a Member and Associate Member under the said Act. According to him, order of Hon’ble Apex Court in the case of The Citizen’s Co-operative Society (supra) had considered the categories of Membership as per Maharastra Co-operative Society Act (MACSA).
Contention of ld.A.R was that both the assessees having been registered under Tamil Nadu Co-operative Societies Act, 1983, the judgement of Hon’ble Apex Court in the case of The Citizen’s Co- operative Society (supra) had no applicability.
I have heard the rival submissions, perused the material on record and gone through the orders of authorities below. The question whether the deduction u/s.80P(2)(a)(i) of the Act could be given to a ,2796/CHNY/2017 :- 4 -:
Society, which was having business with both Regular Members as well as Associate Members had come up before the Hon’ble Apex Court in the case of The Citizen’s Co-operative Society(supra). Hon’ble Apex Court had clearly held that such deduction would not be available to a Society where it had business with Nominal Members, who were not share holder member in the real sense. Now the argument taken by the ld.A.R before me is that judgement of Hon’ble Apex Court in the case of The Citizen’s Co-operative Society (supra) was in relation to MACSA whereas the assessees here were registered under Tamil Nadu Co-operative Societies Act, 1983. Be that as it may, the judgement of Hon’ble Apex Court in the case of The Citizen’s Co-operative Society(supra) was not available with the lower authorities, when they considered the question whether the assessees were eligible for claiming exemption u/s.80P(2)(a)(i) of the Act. Records made available before me is not adequate enough to decide whether the provisions under MACSA and provisions under Tamil Nadu Co-operative Societies Act, 1983 in relation to various categories of Members are pari-materia or entirely different. I am therefore, of the opinion that the question whether assessee was eligible for claiming deduction u/s.80P(2)(a)(i) of the Act, requires a re-visit by the ld. Assessing Officer. I set aside the orders of the lower authorities and remit the ,2796/CHNY/2017 :- 5 -: issue back to the file of the ld. Assessing Officer for consideration afresh in accordance with law.
In the result, both the appeals of the Revenue are allowed for statistical purposes.
Order pronounced on 12th April, 2018, at Chennai.