BALA SAMABAY KRISHI UNNAYAN SAMITY LTD.,WEST MIDNAPUR vs. A.C.I.T., CIRCLE - 38, WEST MIDNAPUR

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ITA 1378/KOL/2024Status: DisposedITAT Kolkata19 November 2024AY 2018-2019Bench: SHRI ANIKESH BANERJEE (Judicial Member), SHRI RAKESH MISHRA (Accountant Member)8 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee, being a co-operative society engaged in providing credit facilities to its members, is eligible for deduction under Section 80P(2). The disallowance of provisions for NPAs was also found to be unjustified.

What were the facts?

The assessee, a primary agricultural co-operative credit society, appealed against the CIT(A)'s order confirming additions made by the AO. The additions related to the denial of deduction under Section 80P and disallowance of provisions for NPAs.

What were the issues?

Whether the assessee cooperative society is eligible for deduction under Section 80P, and whether provisions for NPAs are allowable expenses.

Which sections of the Income-tax Act were involved?

Section 80P,Section 144,Section 147,Section 144B,Section 250,Section 271B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH KOLKATA

Before: SHRI ANIKESH BANERJEE & SHRI RAKESH MISHRA

For Appellant: Shri Saumitra Choudhury, AR
For Respondent: Shri Anindya Kumar Bandopadhyay, DR
Hearing: 07.11.2024Pronounced: 19.11.2024

Bala Samabay Krishi Unnayan ACIT, Circle 38, Samity Ld. Vs Raja N.L. Khan Road, Vill. & P.O. Bala, Ghatal, West Paschim Medinipur, West Midnapur, West Bengal-721201 Bengal- 721101 (Appellant) (Respondent) PAN: AAABB0497N Present for: Appellant by : Shri Saumitra Choudhury, AR Respondent by : Shri Anindya Kumar Bandopadhyay, DR Date of Hearing : 07.11.2024 Date of Pronouncement : 19.11.2024 O R D E R PER ANIKESH BANERJEE, JUDICIAL MEMBER:

A bunch of appeal was filed by the assessee against the order of the National Faceless Appeal Centre, Delhi [in brevity ‘the learned CIT (A)’], order passed under Section 250 of the Income-tax Act, 1961 (in brevity, ‘the Act’) for A.Ys. 2017-18 & 2018-19 vide order dated 24.04.2024 and 03.05.2024 respectively. The impugned orders are emanated from the order of the learned ACIT, Circle 38, Midnapur (in brevity, ‘the learned AO’), date of order 28.12.2019, order passed u/s 144 of the Act for AY 2017-18 and the assessment unit Income tax department order passed u/s 147 read with section 144B of the Act date of order 27.03.2023 for 2018-19 and order passed u/s 271B of the Act date of order 14.09.2023 for A.Y. 2018-19. to 1378/KOL/2024 Bala Samabay Krishi Unnayan Samity ltd.; A.Y. 2017-18 & 2018-19 2. Two appeals are same nature of fact and having common issue related to ITA No.1376 and 1377/KOL/2024. ITA No. 1376/KOL/2024 for A.Y. 2017-18, is taken as lead case and proceed for adjudication. The appeal, ITA No. 1378/Kol/@024 is related to penalty and adjudicated separately.

3.

The grounds in raised by the assessee are reproduced below:-

“1. For that on the facts of the case, the order passed by the Ld. CIT(A) on 24.04.2024 which is completely arbitrary, unjustified and illegal.

2.

For that on the facts of the case, the impugned order is at best capable of being classified as a case of mere change of opinion, hence, the assessment is bad in law should be quashed.

3. For that on the facts of the case, the Ld. CIT(A) was wrong in dittoing the order of the A.O. and not justified in confirming the addition of Rs. 4,73,145/- as profit as per profit & loss account of the society chargeable to tax denying deduction u/s. 80P of the I.T. Act which is completely arbitrary, unjustified and illegal.

4.

For that on the facts of the case, A.O. was wrong in not considering the fact that the assessee being a registered co-operative society is carrying on business and providing credit facilities to its members and the assessee is eligible for deduction u/s. 80P(2) of the Income Tax Act under chapter VIA, as such the action of the Ld. CIT(A) is baseless and should be quashed.

5.

For that on the facts of the case, the Ld. CIT(A) was wrong in dittoing the order of the A.O. and not justified in confirming the disallowance of Provision for NPA- Unsecured Loan Rs. 15,31,490/- and Provision for NPA- OD Interest on Loan Rs. 4,50,048/- aggregating Rs. 19,81,538/- debited in the P&L Account which is completely arbitrary, unjustified and illegal.

6.

For that the appellant. A primary agricultural co-operative credit society registered under the West Bengal Co-operative Societies Act, and its accounts is statutorily audited by Government co-operative auditor appointed by the

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