THE LUDHIANA LIC OF INDIA EMPLOYEES CO-OPERATIVE NON-AGRICULTURAL THRIFT & CREDIT SOCIETY LIMITED,LUDHIANA vs. INCOME TAX OFFICER,, LUDHIANA

Briefly the facts of the case are that the assessee, a registered cooperative society providing credit facilities to its members, had filed its return of income on 13/09/2017 claiming deduction under Section 80P amounting to Rs. 51,92,818/-. The AO after examining the claim of deduction so made by the assessee society disallowed a sum of Rs. 3,64,323/- under section 80P(2)(d) in respect of interest on FDRs placed with Punjab National Bank. As per the AO, the interest has been received from Nationalised Bank where as the provisions of section 80P(2)(d) talks about the interest from investment with any other cooperative society.

Being aggrieved the assessee carried the matter in appeal before the Ld. CIT(A). The Ld. CIT(A) following the decision of Hon’ble Supreme Court in case of Totagars Co-operative Sale Society Ltd. reported in 322 ITR 283 as well as Hon’ble Gujarat High Court in case of State Bank of India reported in 389 ITR 578 has sustained the disallowance so made by the AO.

Similar fact pattern exists for A.Y. 2018-19 wherein the AO has disallowed a sum of Rs. 16,15,470/- on FDRs placed with Punjab National Bank and Ludhiana Central Cooperative Bank, following the same reasoning as given in A.Y. 2017-18. 5. Against the said findings and the direction of the Ld. CIT(A), the assessee is in appeal before us. 6. During the course of hearing, the Ld. AR submitted that the Ld. CIT(A) during the appellate proceedings has issued a show cause notice and before the assessee could respond to the show cause notice, the Ld. CIT(A) has gone ahead and pass the impugned order. It was accordingly submitted that the assessee has not been provided the requisite opportunity to represent its case before the Ld. CIT(A). In this regard, it was submitted that the assessee has filed its submission on 23/11/2022 and the Ld. CIT(A) has passed the order on 24/11/2022 without taking into consideration the submissions so filed by the assessee. 7. It was submitted that similar fact pattern exists for A.Y. 2018-19 wherein the Ld. CIT(A) has gone ahead and passed the impugned order without taking into consideration the submissions so filed by the assessee. 8. The Ld. DR is heard who has taken us through the order of the Ld. CIT(A) and it was submitted that the Ld. CIT(A) has duly considered the submissions so filed by the assessee as can be seen from para 4.1 of the impugned order wherein the submission so field by the assessee were considered by the Ld. CIT(A). 9. In his rejoinder, the Ld. AR submitted that the submission so reproduced were in response to the initial notice. However, the subsequent submission dt.

After hearing both the parties and considering the material available on the record, we find that the assessee’s submissions in response to the show-cause notice have not been considered by the ld CIT(A) and the assessee’s being aggrieved with the same, deserves one more opportunity to represent its case before the ld CIT(A). We deem it appropriate to set aside both these matters to the file of the Ld. CIT(A) to decide the same afresh as per law after taking into consideration the submission so filed by the assessee on 23/11/2022 as well as any further submissions which the assessee may like to file as so advised. In view of the same, the contentions on merits of the case have been left open and have not been adjudicated upon and the assessee is at liberty to raise the same before the Ld. CIT(A) who shall consider the same as per law.

Further, it is noticed, from the order sheet entry dated 27 June 2023, that the Coordinate Bench, before whom the matter was initially listed, has brought to the notice of both the parties two decisions of the Hon’ble Jurisdictional Punjab & Haryana High Court in case of CIT Vs. Punjab State Cooperative Federation of House Building Societies Ltd. [2011] 11 taxmann.com 448 and CIT Vs. Punjab State Cooperative Agricultural Development Bank Ltd. (2016) 389 ITR 607 wherein the decision of the Hon’ble Supreme Court in case of Totagars Co-operative Sale Society Ltd.(supra) have been considered by the Hon’ble Jurisdictional High Court and it was stated by the Coordinate Bench that said decisions have a prima facie direct bearing on the matter under consideration and comments of both the parties were sought.

Since we are setting aside the matter to the file of the ld CIT(A) and the contentions on merits have been left open and not adjudicated upon, the applicability of the aforesaid decisions in the facts and circumstances of the present case have not been gone into, at the same time, we direct the Ld. CIT(A) to take into consideration the aforesaid decisions of Hon’ble Jurisdictional High Court and examine its applicability in the facts of the present case and the assessee would be at liberty to file necessary submissions in this regard and which shall be duly considered by the Ld. CIT(A) before deciding the matter.

In light of aforesaid, both the above appeals are thus set aside to the file of the Ld. CIT(A) to decide the same afresh as per law after providing reasonable opportunity to the assessee.

In the result, both the above appeals of the assessee are allowed for statistical purposes. Order pronounced in the open Court on 24/06/2024 परेश म. जोशी िव"म िसंह यादव (PARESH M. JOSHI) ( VIKRAM SINGH YADAV) "ाियक सद" / JUDICIAL MEMBER लेखा सद"/ ACCOUNTANT MEMBER