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Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE
अपीलधथी की ओर से/ Appellant by : Shri V.Govinda Raju, AR प्रत्यधथी की ओर से / Respondent by : Shri O.N.Hari Prasada Rao, DR सुनवधई की तधरीख / Date of Hearing : 12.07.2023 घोर्णध की तधरीख/Date of Pronouncement : 10.08.2023 आदेश /O R D E R
Per Shri Duvvuru RL Reddy, Judicial Member :
This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi vide DIN & Order No.ITBA/NFAC/S/250/2022-23/1049294835(1) dated 31.01.2023, arising out of assessment order passed u/s 154 of the Income Tax Act,
The Central Goods & Service Tax and Employees Thrift and Co-op Credit Society Ltd., Kakinada 1961 (in short ‘Act’) dated 10.08.2020 for the Assessment Year (A.Y.) 2018-19.
Brief facts of the case are that the assessee is a cooperative society registered under Andhra Pradesh Cooperative Societies Act, 1964, with the main objective of providing credit facilities to it’s members. During the A.Y.2018-19, the assessee society had filed it’s return of income declaring ‘Nil’ income after claiming deduction u/s 80P of the Act. But, the Ld.CPC, Bengaluru without considering the facts and circumstances of the case, disallowed the deduction u/s 80P of the Act and passed the intimation u/s 143(1) of the Act, by raising impugned demand of Rs.1,58,080/-. Subsequently, the assessee had filed rectification request u/s 154 of the Act to the Ld.CPC, Bengaluru. But, the Ld.CPC without giving weightage to the assessee’s contentions passed the Rejection of Rectification Order u/s 154 of the Act dated 10.08.2020 and the same was sent to the assessee on 13.08.2020 through e-mail.
Aggrieved with the order of Rejection of Rectification passed by the Ld.CPC, Bengaluru, the assessee preferred an appeal before the Ld.CIT(A) and the Ld.CIT(A) partly allowed the appeal of the assessee by restricting the deduction claimed u/s 80P(2)(a)(ia) to Rs.1,05,746/-.
The Central Goods & Service Tax and Employees Thrift and Co-op Credit Society Ltd., Kakinada
Aggrieved with the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :
1. That the Impugned Order (Order u/s 250 of the Income Tax Act, 1961 passed by the Ld.First Appellate Authority (i.e. Ld.CIT(Appeals), NFAC, Delhi) in so far as it is prejudicial to the interests of the Appellant is bad and erroneous in law and is against the facts and circumstances of the case.
2. The Ld.First Appellate authority erred in not speaking about the allowability of deduction u/s 80P of the Income Tax Act, 1961 even though the ITR for the A.Y.2018-19 was filed within the due date i.e. prior to 31st October 2018. If deduction u/s 80P is allowed, there is no demand in the instant case. But, surprisingly, without considering the deduction u/s 80P as the Appellant appealed against, the new disallowance was made in the impugned order to the extent of Rs.3,27,037/-, without giving the opportunity of being heard, which is against to the principles of natural justice. 3. The Ld.First Appellate authority erred in making fresh addition of Rs.3,27,037/- added as interest earned, assessed as income from other sources deserves to be deleted on the ground that, there is no interest income earned by the appellant during the A.Y.2018-19. All the income is from business and eligible for deduciton under s.80P(2) of the Act, as per statutory provisions & legislative intentions. 4. The Appellant submits that, the impugned addition of Rs.3,27,037/- added as interest earned wrongly assessed by Ld.First Appellate authority as tabulated below : S.No. Particulars Receipts Payments Difference / profit earned from ivnestmen t in S.BA/c 1. S.B.A/c at Axis Bank, 28,74,370 27,25,930 1,48,440 KKD 2. S.B.A/c at S.B.I.KKD 1,64,20,41 1,62,87,35 1,33,061
The Central Goods & Service Tax and Employees Thrift and Co-op Credit Society Ltd., Kakinada
(Jagannaikpur) 2 1 3. S.B.A/c at S.B.I.KKD 2,31,80,21 2,31,34,68 45,336 7 1 Total 3,27,037 Based on the table, the Ld.First Appellate Authority erred by considering the difference between Receipts and Payments as Profit earned from Investments in SB A/c, as per audited Receipts & Payment A/c. It is factually incorrect. Hence, the impugned addition of Rs.3,27,037/- has to be deleted.
The Ld.First Appellate authority erred in confirming the levy of interest u/s 234A, 234B & 234F of the Income Tax Act, 1961.
The Appellant craves leave to add, amend or alter, vary and / or withdraw any of the above grounds of appeal at the time of hearing of the Appeal. The Appellant wish to be personally heard before any decision is taken in this matter. The Appellant prayed this Hon’ble ITAT, Visakhapatnam Bench to Pass Orders as may be deemed firt and rpoper in the facts and circumstances of the case.
5. All the grounds of appeal relate to disallowance of deduction claimed u/s 80P of the Act. The only contention of the Ld.AR is that the return of income was filed, after claiming deduction u/s 80P of the Act on 28.10.2018, well before the due date of filing of the return of income, i.e.31.10.2018. The Ld.AR further contended that the Ld.CIT(A) erred by considering the difference between receipts and payments as profit earned from investments in SB A/c as per audited Receipts & Payments A/c, made new disallowance of Rs.3,27,037/- and confimred the levy of interest u/s 234A, 234B and 234F of the Act. The Ld.AR submitted that The Central Goods & Service Tax and Employees Thrift and Co-op Credit Society Ltd., Kakinada the assessee was not given an opportunity of being heard to subtantiate it’s claim, which is against to the principles of natural justice. The Ld.AR, therefore, pleaded to set aside the order passed by the Ld.CIT(A) and give one more opportunity of being heard to the assessee.
6. Per contra, the Ld.DR submitted that the Ld.CIT(A) was correct in partly allowing the appeal of the assessee. He, therefore, pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee.
7. I have heard both the parties and perused the material available on record. It is an undisputed fact that the assessee is a cooperative society, registered under Andhra Pradesh Cooperative Societies Act, 1964 with the main object of providing credit facilities to it’s members. The assessee claimed deduction u/s 80P of the Act. But the Ld.CPC, Bengaluru raised demand of Rs.1,58,080/-, though the return of income was filed on 28.10.2018 before the due date i.e.31.10.2018. The assesse’s rectification request u/s 154 of the Act was not considered by the Ld.CPC Bengaluru and Rejection of Rectification Order u/s 154 was passed. Even the plea of the assessee before the CIT(A) was not entertained as the Ld.CIT(A) passed order considering the difference between receipts and payments
The Central Goods & Service Tax and Employees Thrift and Co-op Credit Society Ltd., Kakinada as profit earned from investments in SB A/c as per audited Receipts & Payment A/c and made impugned additon of Rs.3,27,037/-. The Ld.AR contended that the Ld.CIT(A) erred in making fresh additon of Rs.3,27,037/- which is not correct and deserve to be deleted. The Ld.AR submitted a copy of audit report for the Finanical Year 2017-18 before the Tribunal and filed statements of receipts and payments, income and expenditure, Balance Sheet, Profit and Loss Statement etc. and contended that the assessee was not given oportunity before the Ld.CIT(A) to substanstiate it’s case and therefore, pleaded for one more opportunity of being heard before the Ld.CIT(A). The Ld.DR has not raised any objection for the same. In view of the foregoing facts and circumstances of the case and keeping in view the principles of natural justice, I am inclined to direct the Ld.CIT(A) to afford one more opportunity of being heard before the Ld.CIT(A). The assessee is also directed to adhere to the notices issued by the department and submit relevant documents before the revenue authorities for adjudication of the case.
In the result, appeal of the assessee is allowed for satistical purpose.
The Central Goods & Service Tax and Employees Thrift and Co-op Credit Society Ltd., Kakinada
Order pronounced in the open court on 10th August, 2023.
Sd/- (दुव्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 10.08.2023 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– The Central Goods & Service Tax and Employees Thrift and Co-op Credit Society Limited, Ground Floor, O/o The Deputy Commissioner of Customs, Port Area, Kakinada 2. रधजस्व/The Revenue – The Income Tax Officer, Ward-1, Kakinada 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam