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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Sanjay Arora & Ms. Kavitha Rajagopal
Appellant by: Shri Suresh Kumar C., CA Respondent by: Smt. J.M. Jamuna Devi, Sr. D.R. Date of Hearing: 12.02.2024 Date of Pronouncement: 03.05.2024 O R D E R Per: Sanjay Arora, AM This Appeal by the Assessee is directed against the Order dated 30.8.2022 by the Commissioner of Income Tax (Appeals), Income Tax Department [CIT(A)], dismissing the assessee’s appeal contesting it’s assessment under section 143(3) of the Income Tax Act, 1961 (the Act), dated 06.4.2021 for assessment year2018-19.
The brief facts of the case are that the assessee, a Primary Agricultural Credit Society (PACS), registered under the Kerala Co-operative Societies Act, 1969 (the Kerala Act) returned it’s income for the relevant year on 01.12.2018, which we presume to be by the due date specified u/s. 139(1) of the Act, claiming deduction u/s. 80P at Rs.52,18,779. The same was subject to the verification procedure under the Act, with the AO seeking details vide notices u/s. 142(1) of the Act dated 25.2.2020, 20.7.2020, 24.8.2020, and 04/2/2021. The assessee, vide it’s reply dated (AY : 2018-19) SA No. 72/Coch/2022 Payyavoor Service Co-op. Bank Ltd. v. ITO 12/2/2021, furnished the copy of it’s bye-laws, as also provided some of the details called for, even as it explained the difficulty in uploading certain details, viz. loans to members; services provided to different persons; bank statements, etc. The loans and services, it though clarified are being provided, in accordance with the byelaws, only to the members, furnishing a Certificate from it’s Secretary (copy not on record) in substantiation. The AO regarded it as insufficient. Further, the assessee’s P&L A/c for the relevant year bore the following incomes, eligibility of which u/s. 80P had not been exhibited, as indeed details of investment for Rs.73.97 lakhs: Sr. No. Description Amount (Rs.) 1. Sales 25,73,782.50 2. Trade Income 53,192.60 3. Manure 6,80,008.50 4. Neethi Medicine 6,41,260.00 5. Misc. Income 85,26,365.05 He, therefore, completed the assessment disallowing the entire claim u/s. 80P. In appeal, the ld. CIT(A) found no improvement in it’s case being made by the assessee, even as it relied on the decision in Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 431 ITR 1 (SC). He, accordingly, confirmed the assessment, holding as under: ‘6.6 So far claim of deduction u/s 80P is concerned it is found that the AO has asked the assessee to provide the various details as mentioned above to support the claim of deduction u/s 80P and mainly to prove that the activities of the assessee are only limited to members. The basic details for claiming deduction under various sub-sections of 80P was not filed before the AO. The certificate from the secretary of the society that all the activities were with members only cannot be treated as sufficient evidence when the AO has asked the assessee to furnish the complete list of persons to whom loans were given so that he can examine the claim that the credit facilities are only provided to members. The onus was on the assessee to file required details to prove that the activities of loan financing is only with the members. However, the assessee did not file required details. Details of several other activities and their eligibility of the deduction u/s 80P was not filed by the assessee. The legality of claim of deduction u/s 80P only arises if the facts relevant to the claim are furnished before the AO for examination. None of the case laws relied upon by the assessee support allowing deduction u/s 80P without examining the basic facts. The AO has the authority to ask various details and the onus is on the assessee to furnish factual details related to deductions claimed. 2 | P a g e (AY : 2018-19) SA No. 72/Coch/2022 Payyavoor Service Co-op. Bank Ltd. v. ITO 6.7 In the instant case, it is found that the assessee has failed to provide basic factual details before the AO in support of claim of deduction and therefore the denial of deduction u/s 80P by the AO is found to be justified and hence upheld. All the grounds of appeal
are dismissed.’ (emphasis, other than by bold letters, ours) Aggrieved, assessee is in second appeal.
3. Before us, the emphasis of Shri Suresh, the ld. counsel for the assessee, was to bring home the assessee’s difficulty in furnishing the relevant details. The assessee had as many as 14693 members. It was accordingly an extremely challenging task in uploading the relevant details. The assessment was completed on 06.04.2021, even as the final show cause notice was issued only on 26.03.2021. The ld. CIT(A) has also been specifically prayed for being allowed virtual hearing to explain the difficulty in providing the relevant information, as indeed to plead the case. He would conclude with a prayer for admission of additional evidence and remittance back to the AO. Smt. Devi, the ld. Sr. DR, on the other hand, submitted that the assessee had been allowed adequate opportunity, with the last notice u/s. 142(1), again un-complied with in full, being dated 04.02.2021.
4. We have heard the parties, and perused the material on record. 4.1 The assessee, it appears, made the following claims per it’s return of income: Basic Exemption Rs. 50,000/- (s. 80P(2)(c)) Income from Credit to members Rs. 6,02,29,722/- (s. 80P(2)(a)(i)) Income from investment in other Cooperative Societies Rs. 61,53,399/- (s. 80P(2)(d)) Total Rs. 6,64,33,121/- Does it, therefore, mean that no claim u/s. 80P was made qua incomes listed at para 2 of this order, even as we observe the assessee to, in assessment, advert to s. 80P(2)(a)(iv) of the Act. If so, there is again no material in it’s respect on record. 4.2 The burden to prove it’s return of income, and the claims preferred thereby, it is trite law, is only on the assesssee, and toward which the AO has referred to the (AY : 2018-19) SA No. 72/Coch/2022 Payyavoor Service Co-op. Bank Ltd. v. ITO decisions in Mavilayi Service Co-operative Bank Ltd. (supra) and Udaipur Sahkari Upbhokta Thok Bhander Ltd. v. CIT [2009] 315 ITR 21 (SC). We are not impressed by Sh. Suresh’s attempts to make out a case of lack of adequate opportunity in assessment. The show cause notice dated 26/3/2021 was in fact preceded by four notices spreading over a period of a year and, as we see it, was a final opportunity to the assessee to show why it’s claim u/s. 80P be, in view of non-furnishing the details, disallowed. Any verification by the AO, it may be appreciated, could only be upon furnishing the requisite details, so that it in fact forms the starting point of the verification process, which may be done on a sample basis. Admittedly, it maintains physical records and it’s accounts, duly audited. Rather, the same would have formed the basis of it’s claims per it’s return and, further, of the information provided during assessment proceedings, collating there-from. On what basis, one may ask, did it, then, file it’s return claiming deduction u/s. 80-P and, further, under different sub- sections thereof, as the ld. CIT(A) notes and, besides, it’s Secretary issue a certificate, which necessarily implies that the information returned and/or certified is borne out of the record. It is in fact difficult to believe that the assessee’s accounts are not computerised, nor is there any claim to that effect. We could further understand the assessee seeking some time, say a month, for collating the details, while the proceedings extended to over a year. Why, the aggregate details furnished, viz. loan profile, would only be on the basis of records maintained by the assessee, being even otherwise obliged to under it’s governing Act, i.e., the Kerala Act. That the assessee does not have, on tap, the information on lending to, as indeed acceptance of deposits from, members and non-members, being a basic information, is incomprehensible. The claim of ‘challenge’ in uploading the details is not understood and, in fact, not explained at any stage. This aspect is normally dealt with by the representing counsels, while we find none such by the assessee’s counsel. To be though fair to the assessee, it does not claim non-extension of proper opportunity by the AO, before