ITO 21(3)(3), MUMBAI vs. SHREE VISHVESHWAR SAHAKARI PATHPEDHI MARYADIT, MUMBAI

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ITA 3929/MUM/2016Status: DisposedITAT Mumbai19 April 2017AY 2012-133 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 dismissed the appeal as not maintainable because the tax effect involved was below Rs. 10 lakhs, excluding education cess. This was based on CBDT Circular No. 21/2015.

What were the facts?

The Revenue appealed the CIT(A)'s order allowing deduction under Section 80P(2)(a)(i) to the assessee, a cooperative society. The Revenue argued that the assessee, by its activities, should be treated as a cooperative bank and thus ineligible for deduction due to Section 80P(4).

What were the issues?

Whether the appeal is maintainable based on the tax effect, and whether the assessee is eligible for deduction under Section 80P despite its activities potentially classifying it as a cooperative bank.

Which sections of the Income-tax Act were involved?

Section 80P,Section 80P(2)(a)(i),Section 80P(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAOShri Vishweshwar Sahakari Shri Vikas Agarwal

For Appellant: Ms. Beena Santosh, DR
For Respondent: Shri Vikas Agarwal
Hearing: 13.04.2017Pronounced: 19.04.2017

सुनवाई की तायीख / Date of Hearing : 13.04.2017 घोषणा की तायीख /Date of Pronouncement : 19.04.2017 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

1.

This appeal filed by the Revenue on 9.6.2016 is against the order of the CIT (A)-33, Mumbai dated 28.3.2016. In this appeal, Revenue raised the following grounds which read as under:- “1. Whether on the facts and circumstances of the case and in law, the Ld CIT (A) erred in holding that the assessee is eligible for deduction u/s 80P(2)(a)(i) of the Act.

2. Whether on the facts and in the circumstances of the case and in law, Ld CIT (A) erred in deleting the addition of Rs. 32,51,070/- without considering the provisions of the new sub-section which has been inserted in section 80P w.e.f 1.4.2007 which provides that the provisions of sub-section shall not apply in relation to any cooperative bank other than a Primary Agricultural and Rural Development Bank.

3. Whether on the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in not appreciating the facts that as per definition given under sub-clause (cci) & (ccii) of the clause (c) of section 5 of the Banking Regulation Act, the assessee has to be treated as Cooperative Bank by virtue of the activities being carried out by the assessee and thereby attracts the provisions of section 80P(4) making the assessee ineligible for deduction u/s 80P of the Act.”

2. At the outset, Counsel for the assessee demonstrated that the tax effect involved in the appeal is below Rs. 10 lakhs provided „education cess‟ is not included.

Regarding such exclusion of the education cess for the purpose of examining the tax effect, assessee relied on the order of the Tribunal in the case of DCIT vs. M/s. Dome Bell Electronics India Ltd, (AY 2007-2008), dated 22.7.2016. Ld AR filed a copy of the said Tribunal‟s order and read out the relevant para 3.3, which is as under:- “3.3. We have gone through the sub-section (43) of section 2 which defines „tax‟. The perusal of the definition shows that whatever was intended to be included in tax has been mentioned therein. When the legislature has mentioned the words „super- tax‟ and „fringe benefit tax‟, then, it could have also mentioned the words „surcharge‟ and „education cess‟ as well, if there was any intention to include the in the word „tax‟. Thus, we respectfully agree with the decision taken by the Chennai Bench. In our view, surcharge and education cess shall not be included in the word „tax‟ for the purpose of examining of the tax effect as envisaged in circular of Board dt 10th December, 2015 No.21/2015........”

3.

After hearing both the parties and on perusal of the orders of the Revenue Authorities as well as the cited decision of the Tribunal (supra), I agree with the decision of the Tribunal in the case of M/s. Dome Bell Electronics India Ltd (supra). Considering the same, I am of the considered opinion, since the tax effect involved in this appeal is below Rs. 10 lakhs therefore, the appeal is required to be dismissed as not maintainable as per the CBDT Circular No.21/2015, dated 10.12.2015. Accordingly we order. Thus, grounds raised

by the Revenue are dismissed.

4. In the result, appeal filed by the Revenue is dismissed. Order pronounced in the open court on 19th April, 2017.

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