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IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH
DATED THIS THE 10TH DAY OF OCTOBER, 2018
PRESENT
THE HON’BLE MR.JUSTICE B.VEERAPPA AND THE HON’BLE MR.JUSTICE H.T. NARENDRA PRASAD
I.T.A.NO.100015/2018
BETWEEN:
SRI BAPOOJI PATTIN SOUHARD SHANKARI NIYAMIT, REPRESENTED BY THE CEO SRI RAJASHEKAR S/O BASAVARAJ KURTAKOTI, AGED : 59 YEARS, NO.7/8, SECTOR NO.25, NAVANAGAR, BAGALKOT, PAN NO.AAAAB6930F. ... APPELLANT (BY SRI H.R.KAMBIYAVAR, ADVOCATE)
AND:
THE PRINCIPAL COMMISSIONER OF INCOME TAX, DR.AMBEDKAR, ROAD, OPP: CIVIL HOSPITAL, BELAGAVI – 590 001.
THE INCOME TAX OFFICER, WARD-I, NAVANAGAR, BAGALKOT. ... RESPONDENTS (BY SRI Y.V.RAVIRAJ, STANDING COUNSEL FOR RESPONDENTS)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 PRAYING TO SET ASIDE THE ORDER OF THE APPELLATE TRIBUNAL AT BENGALURU,
: 2 : IN ITA NO.827/BANG/2017 DATED 31.10.2015 FOR THE ASSESSMENT YEAR 2013-14 VIDE ANNEXURE-A, TO THIS APPEAL.
THIS APPEAL COMING ON FOR ADMISSION, THIS DAY, B.VEERAPPA J., DELIVERED THE FOLLOWING:
JUDGMENT Though this appeal is listed for admission, with the consent of the learned counsel for the parties, it is taken up for final disposal. 2. The present Income Tax Appeal is filed by the Assessee against the order dated 31.10.2017 made in ITA No.827/Bang/2017, Assessment Year 2013-14 on the file of the Income Tax Appellate Tribunal, “A” Bench, Bangalore allowing the appeal and remanded the matter to the Assessing Officer for de-nova assessment in accordance with law. 3. The present appellant – Assessee filed return of income for the Assessment Year 2013-14 on 23.09.2013 declaring nil income after claiming exemption under Section 80P of the Income Tax Act (For short ‘the Act’) of Rs.87,10,540/-. Against the said return of income, assessment was completed by the ITO, Ward-1, Bagalkot by
: 3 : an order dated 31.12.2015 passed under the provision of Section 143 (3) of the Act by denying the exemption under Section 80P of the Act, disallowing Pigmi commission on the ground that no TDS was made of Rs.1,70,46,946/-. Accordingly, the Assessing Officer denied the exemption under Section 80P of the Act on the ground that the Assessee – Society is a Bank and is hit by the provisions of Sub-Section (4) of Section 80P of the Act. 4. Being aggrieved by the order passed by the Assessing Officer, the Assessee filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) following the decision of this Court in the case of CIT Vs. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha has allowed the appeal holding that the appellant - Assessee is not a Co-Operative Bank, therefore not hit by provisions of Sub-Section (4) of Section 80P of the Act and also granted relief in respect of addition of Pigmi commission. Therefore, the commission paid on the ground that TDS provisions are not applicable. Therefore, the Revenue filed an appeal in ITA
: 4 : No.827/Bang/2017 before the Income Tax Appellate Tribunal, “A” Bench, Bangalore. 5. The Income Tax Appellate Tribunal, considering the entire material on record, by the impugned order dated 31.10.2017 allowed the appeal and remanded the matter to the Assessing Officer for reconsideration afresh, in the light of the dictum of the Hon’ble Supreme Court in the case of the Citizen Co-Operative Society Ltd. V.s ACIT reported in (2017) 397 1 (SC). Hence the present appeal is filed. 6. We have heard the learned counsel for the parties to the lis. 7. Sri H.R.Kambiyavar, learned counsel for the appellant vehemently contended that while remanding the matter, the Tribunal has erred in holding that the Pigmi account goes to show that the appellant has accepted the deposit even from non-members, which is totally erroneous. He would further contend that the Income Tax Appellate Tribunal relied upon the judgment of this Court in the case of CIT Vs. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha made in ITA No.5006/2013 and held
: 5 : that the appellant - Assessee is not a Co-Operative Bank and therefore not hit by the provision of Sub-Section (4) of Section 80P same has not been considered by the appellate authority. Therefore, he sought to allow the appeal. 8. Per contra, Sri Y.V.Raviraj, learned standing counsel for the respondents sought to justify the impugned order and contended that the very appeal filed by the appellant against the remand order passed by the Income Tax Appellate Tribunal is not maintainable, no substantial question of law involved to decide the dispute between the parties. Therefore, he sought to dismiss the appeal. 9. Having heard the learned counsel for the parties, the only issue that arises for consideration is :- “Whether the Assesseee - Co-Operative Society which fulfills the conditions of being Primary Co-Operative Bank as provided under the provisions of Section 5(ccv) of Banking Regulations, 1949.” 10. The Tribunal considering the entire material on record in proper perspective, recorded a finding that in view
: 6 : of the dictum of the Hon’ble Supreme Court in an identical circumstances in the case of the Citizen Co-Operative Society Ltd. Vs. ACIT reported in (2017) 397 ITR 1 (SC), wherein it was held that, business of the Society does not amount to that of Co-Operative Bank, so as to come within the mischief of Sub-Section (4) of Section 80P of the Act. Since the Assessee was catering to the needs of non- members also, the principle of mutuality is tainted and therefore the benefit of Section 80P was denied. Whether the appellant – Assessee accepting the deposits even from the non-members has to be held enquiry afresh by the Assessing Authority. Therefore, the Tribunal has remanded the matter to the Assessing Officer for fresh enquiry and the same is in accordance with law. The Tribunal while remanding the matter ought not to have recorded any finding on merits of the case. 11. In view of the above, the appellant has not made out any grounds to frame any substantial question of law and to admit the present appeal against the remand order passed by the Tribunal, which is well crafted order
: 7 : and the same is in accordance with law. Accordingly, appeal is dismissed confirming the order passed by the Income Tax Appellate Tribunal. 12. However, it is made clear that any observations made by the Tribunal while remanding the matter to the Original Authority shall not come in the way of either of the parties to establish their case independently before Assessing Authority and all the contentions urged by both the parties are left open to be urged before the Assessing Authority. 13. The Assessing Authority shall consider the case in the light of the dictum of the Hon’ble Supreme Court in the case of the Citizen Co-Operative Society Ltd., (supra) and pass orders strictly in accordance with law.
Sd/- JUDGE
Sd/- JUDGE EM