THE PRINCIPAL COMMISSIONER vs. M/S BAPOOJI PATTIN

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ITA/100049/2016HC KarnatakaKAHC02008110201621 November 2017Bench: S.SUJATHA,H.B.PRABHAKARA SASTRY5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, without answering the substantial question of law, set aside the impugned orders. The matter was remanded to the Assessing Officer to redo the assessment in light of the Supreme Court's judgment in the Citizen Co-operative Society's case.

What were the facts?

The assessee, a multipurpose co-operative society, was denied deduction under Section 80P(2)(a)(i) by the Assessing Officer. The CIT(A) allowed the deduction, and the ITAT dismissed the Revenue's appeal.

What were the issues?

Whether Section 80P(4) is applicable to deny deduction to a co-operative society that fulfills the conditions of a Primary Co-operative Bank as per the Banking Regulation Act, 1949.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 80P(4),Section 5(ccv),Section 143(1),Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 21ST DAY OF NOVEMBER, 2017 PRESENT THE HON’BLE MRS. JUSTICE S.SUJATHA AND THE HON’BLE Dr. JUSTICE H. B. PRABHAKARA SASTRY I.T.A.No.100049/2016 BETWEEN: 1. THE PRINCIPAL COMMISSIONER OF INCOME TAX, DR. B.R. AMBEDKAR VEEDHI, BELAGAVI.

2.

THE INCOME TAX OFFICER, WARD-1, BAGALKOT.

… APPELLANTS

(BY SRI.Y.V.RAVIRAJ, ADV.)

A N D :

M/S BAPOOJI PATTIN SOUHARDA SAHAKARI NIYAMIT, SECTOR NO.25, NAVANAGAR, DISTRICT: BAGALKOT. PAN: AAAAB6930F.

… RESPONDENT

(BY SRI.SANGRAM S.KULKARNI, ADV.)

THIS APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, BENGALURU IN ITA No.1130/BANG/2015 DATED 28.12.2015 AND CONFIRM THE ORDER PASSED BY THE INCOME TAX OFFICER, WARD NO.1, BAGALKOT, IN THE INTEREST OF JUSTICE AND EQUITY.

2 THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY, S.SUJATHA J., DELIVERED THE FOLLOWING:

JUDGMENT This appeal is filed by the Revenue challenging the order passed by the Income Tax Appellate Tribunal, Bengaluru, (for short ‘ITAT’), in I.T.A.No.1130/Bang/2015, for the assessment year 2012-2013.

2.

The assessee is a Multipurpose Co-operative Society registered under the Karnataka State Co-operative Societies Act. For the assessment year 2012-2013, the return filed by the assessee was processed under Section 143-(1) of the Income Tax Act, 1961 (for short ‘the Act’) and the case was selected for scrutiny and thereafter the assessment was concluded disallowing the deduction under Section 80P(2)(a)(i) of the Act. Being aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) which came to be allowed. Aggrieved by the same, an appeal was preferred by the Revenue before the ITAT. The ITAT dismissed the same.

3 Hence, this appeal is preferred under Section 260-A of the Act, raising the following substantial question of law. i) Whether the Tribunal was right in law and on facts in not appreciating the fact that the assessee being a co-operative society fulfills all the three conditions of being held a Primary Co-operative Bank as given in section 5 (ccv) of the Banking Regulation Act, 1949 and as such section 80P (4) of the Act is applicable to deny the benefit claimed under section 80P(2)(a)(i)?

3.

Learned counsel Shri Sangram S. Kulkarni, appearing for the assessee submitted that in view of the dictum pronounced by the Hon’ble Apex Court in the case of THE CITIZEN CO-OPERATIVE SOCIETY LIMITED, THROUGH ITS MANAGING DIRECTOR, HYDERABAD in Civil Appeal No.10245/2017 (disposed of on 08.08.2017), what is required to be noticed by the Assessing Officer for allowing the deduction under Section 80P(2)(a)(i), is firstly that the activities of the assessee is catering to two

4 distinct categories of people namely resident/ordinary members or the nominal members. Secondly, whether the activities of the assessee comes within the ambit of co- operative society. These are the findings of fact which requires to be adjudicated by the Assessing Officer in terms of the judgment of the Hon’ble Apex Court. Thus, the learned counsel seeks for a remand to the Assessing Officer setting aside the orders impugned herein.

4.

Learned counsel Shri Y.V.Raviraj, appearing for the Revenue do not dispute the same. Learned counsel has no objections to remand the matter to the Assessing Officer to redo the assessment in the light of the judgment of the Hon’ble Apex Court in the case of CITIZEN CO- OPERATIVE SOCIETY’s case supra.

5.

In view of the aforesaid, without answering the question of law raised, the impugned orders are set aside and the matter is remanded to the Assessing Officer to redo the assessment in terms of the law enunciated by the

5 Hon’ble Apex Court in the case of Citizen Co-operative Society’s case supra, as expeditiously as possible. Appeal stands disposed of accordingly.

(Sd/-) JUDGE

(Sd/-) JUDGE

Jm/-

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