M/S SRI NAGENDRA CREDIT CO OPERATIVE vs. THE INCOME TAX OFFICER

PDF · subscribers
ITA/658/2018HC KarnatakaKAHC01055386201812 December 2022Bench: P.S.DINESH KUMAR,T.G. SHIVASHANKARE GOWDA5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court modified the ITAT's order, remanding the matter to the Assessing Officer (AO) instead of the CIT(A). This was to allow the AO to examine whether the deposits were from own funds or borrowed funds and apply the relevant case law.

What were the facts?

The assessee, a co-operative society, claimed deduction under Section 80P(2)(a)(i) for income from deposits made in banks. The ITAT remanded the matter to the CIT(A) for further examination. The assessee appealed this decision.

What were the issues?

Whether the assessee is eligible for deduction under Section 80P(2)(a)(i) for income from bank deposits, and whether the remand to CIT(A) was appropriate.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

- 1 -

ITA No. 658 of 2018

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF DECEMBER, 2022 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE T G SHIVASHANKARE GOWDA INCOME TAX APPEAL NO. 658 OF 2018 BETWEEN: M/S SRI. NAGENDRA CREDIT CO-OPERATIVE SOCIETY LIMITED REP. BY SRI.SIDDESH K.S CEO, #368/A, 6TH MAIN NAGENDRA BLOCK BSK 3RD STAGE BENGALURU-560 050 PAN NO:AALAS80544C …APPELLANT (BY SHRI. CHANDRASHEKAR FOR SHRI. M. LAVA, ADVOCATES)

AND: THE INCOME TAX OFFICER WARD-5(2)(5) BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, KORAMANGALA BENGALURU-560 095 …RESPONDENT (BY SHRI. E.I. SANMATHI, ADVOCATE)

THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 04.05.2018 PASSED IN ITA NO. 1154 & 1155/BANG/2018, FOR THE ASSESSMENT YEARS 2013-2014 AND 2014-2015, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTION OF LAW AS STATED THEREIN AND TO ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, SMC "B" BENCH IN ITA NO. 1154 &

Digitally signed by YASHODHA N Location: High Court Of Karnataka

- 2 -

ITA No. 658 of 2018

1155/BANG/2018, DATED 04.05.2018 FOR THE ASSESSMENT YEARS 2013-2014 AND 2014-2015 RESPECTIVELY.

THIS INCOME TAX APPEAL, COMING ON FOR ORDERS, THIS DAY, P.S. DINESH KUMAR J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the Assessee, directed against the order dated 04.05.2018 in ITAs No.1154 & 1155/Bang/2018 passed by the ITAT1, "SMC-B" Bench, Bangalore, for the Assessment Years 2013-14 and 2014-15, has been admitted to consider following questions of law: "1. Whether the Tribunal was justified in law in not allowing an amount of Rs.3,60,550/- and Rs.4,78,953/- for the Assessment Years 2013-14 and 2014-15 respectively under Section 80P(2)(a)(i) of the Act, as the said income was attributable to the business of banking and consequently erred in passing a perverse order by remanding the matter to the Commissioner of Income Tax (appeals) on the facts and circumstances of the case?

2.

Without prejudice, whether the Tribunal was justified in law in not granting relief in respect of the income earned from co-operative banks which are primarily cooperative societies and consequently ought to have allowed deduction under Section 80P(2)(d) of the Act, on the facts and circumstances of the case?

1 Income Tax Appellate Tribunal, Bengaluru Bench

- 3 -

ITA No. 658 of 2018

2.

Heard Shri Chandrashekar, learned advocate for the appellant-Assessee and Shri E.I.Sanmathi, learned Standing Counselz for the respondent-Revenue.

3.

Shri Chandrashekar for the Assessee submitted that Assessee-Society had deposited its own funds in the banks. Therefore, it was entitled for the benefit of deduction under Section 80P(2)(a)(i) of the Act.2 However, the ITAT has remanded the matter on the file of CIT (A)3 though the issue is covered by the decision of this Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. Income-tax officer, Word-V, Tumkur4 .

4.

Opposing the appeal, Shri Sanmathi for the Revenue adverting to para 5 of ITAT's order, submitted that the ITAT has only remanded the matter to the CIT(A) and therefore, no question of law arises for consideration. 5. In reply, Shri Chandrashekar submitted that if at all the remand order is to be sustained, the matter will have to be sent back on the file of the AO5 to examine whether the deposit made

2 Income Tax Act, 1961 3 Commissioner of Income Tax (Appeals) 4 [2015]55 taxmann.com 447(Karnataka) 5 Assessing Officer

- 4 -

ITA No. 658 of 2018

was out of own funds or borrowed funds, because law with regard to deposit of own funds has been decided in Tumkur Merchants' case.

6.

We have carefully considered rival submissions and perused the records.

7.

In the operative portion of the order, ITAT has remanded the matter to the CIT(A) and also observed that if it is found that facts are inline with the facts in PCIT and another Vs. Totagars Co-operative Sale Society6, then the issue shall be decided against the Assessee and if it is found inline with facts in Tumkur Merchants' case, then it shall be decided in favour of the Assessee. It is not in dispute that position of law has been decided in Totagars Co-operative Society and Tumkur Merchants' cases. Thus, ITAT's remand order is for examination of facts of the case and application of relevant laws. Therefore, in our view, it would be more appropriate to remand the matter on the file of the Assessing Officer instead of CIT(A) for fresh adjudication.

6 395 ITR 611

- 5 -

ITA No. 658 of 2018

8.

In the light of the above discussions, we modify the order passed by the ITAT to the extent of remanding the matter on the file of the CIT(A) and direct that the matter shall be remanded on the file of the AO for fresh consideration, in accordance with law.

9.

The appeal is accordingly disposed of. Since the matter is remanded, the questions of law do not require any answer and they are not answered. The AO shall pass fresh order in accordance with law without being influenced by the observations made by the ITAT or this Court. No costs.

Sd/- JUDGE

Sd/- JUDGE

YN List No.: 1 Sl No.: 47

More judgments on Section 80P

All 5,069 judgments and leading authorities on Section 80P →

Recent GST High Court judgments

Search GST case law →