Mallikarjun Credit Souharda Sahakari Ltd. v. The Income-tax Officer, Ward 1(1), Belagavi (Formerly Income-tax Officer, Ward-1, Nipani) - 2017-LL-1121-22

Citation	2017-LL-1121-22
Appellant Name	Mallikarjun Credit Souharda Sahakari Ltd.
Respondent Name	The Income-tax Officer, Ward 1(1), Belagavi (Formerly Income-tax Officer, Ward-1, Nipani)
Court	HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD
Relevant Act	Income-tax
Date of Order	21/11/2017
Judgment	View Judgment
Keyword Tags	banking regulation act • co-operative society • managing director • co-operative bank • admissibility of deduction
Bot Summary:	The assessee is a Multipurpose Co-operative Society registered under the Karnataka State Co-operative Societies Act. For the assessment year 2010-2011, the return filed by the assessee was processed under Section 143-(1) of the Income Tax Act, 1961 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. I) Whether the benefit of deduction u/s.80P(2)(a)(i) of the Act could be denied to the appellant on the footing that, though the appellant was said to be a co- operative society, it was in fact a co- operative bank, within the meaning as assigned to such bank under Part V of the Banking Regulation Act, 1949 ii) Whether the authorities under the Income Tax Act, 1961, were competent and possessed the jurisdiction to resolve the controversy as to whether the appellant was a co-operative society or co-operative bank, as defined under the provisions of the Banking Regulation Act, 1949 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 4 of THE CITIZEN CO-OPERATIVE SOCIETY LIMITED, THROUGH ITS MANAGING DIRECTOR, HYDERABAD in Civil Appeal No.10245/2017, 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 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. 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 5 Hon ble Apex Court in the case of Citizen Co-Operative Society s case supra. In view of the aforesaid, without answering the questions 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 Hon ble Apex Court in the case of Citizen Co-operative Society s case supra, as expeditiously as possible.

IN HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS 21ST DAY OF NOVEMBER, 2017 PRESENT HON BLE MRS. JUSTICE S.SUJATHA AND HON BLE Dr. JUSTICE H. B. PRABHAKARA SASTRY I.T.A.No.100063/2016 BETWEEN: M/S MALLIKARJUN CREDIT SOUHARDA SAHAKARI LTD., REPRESENTED BY ITS SECRETARY, SRI.ANNASAB BABU SOUDE, AGED ABOUT 48 YEARS, SON OF SRI.BABU RATNAPPA SOUDE, OPP: POST OFFICE, BENADI, TAL: CHIKODI, DIST: BELAGAVI. PINCODE:591215. APPELLANT (BY SRI.H.R.KAMBIYAVAR, FOR SRI S.PARTHASARATHI, ADV.) AND: INCOME-TAX OFFICER, WARD 1(1), ASHOK NAGAR, NIPANI, DIST: BELAGAVI, FORMERLY INCOME-TAX OFFICER, WARD-1, NIPANI. PINCODE:591237. RESPONDENT (BY SRI.Y.V.RAVIRAJ, ADV.) THIS APPEAL IS FILED UNDER SECTION 260A OF INCOME TAX ACT, 1961, PRAYING TO ALLOW APPEALS AND SET ASIDE ORDERS OF INCOME TAX APPELLATE TRIBUNAL, DATED 20.03.2015 IN ITA NO.314/PNJ/2013 2 (ANNEXURE-A) AND DATED 29.07.2016 IN MA NO.33/PAN/2015 (ANNEXURE-A1) AND ORDERS OF LOWER AUTHORITIES FOR ASSESSMENT YEAR 2010-2011 AND ETC., THIS APPEAL COMING ON FOR HEARING, THIS DAY, S.SUJATHA J., DELIVERED FOLLOWING: JUDGMENT This appeal is filed by assessee challenging order passed by Income Tax Appellate Tribunal, Panaji, (for short ITAT ), in I.T.A.No.314/PNJ/2013, for assessment year 2010-2011. 2. assessee is Multipurpose Co-operative Society registered under Karnataka State Co-operative Societies Act. For assessment year 2010-2011, return filed by assessee was processed under Section 143-(1) of Income Tax Act, 1961 (for short Act ) and case was selected for scrutiny and thereafter assessment was concluded disallowing deduction under Section 80P(2)(a)(i) of Act. Being aggrieved, assessee preferred appeal before Commissioner of Income Tax (Appeals) which came to be rejected. 3 Aggrieved by same, appeal was preferred before ITAT. ITAT dismissed same. Hence, this appeal is preferred under Section 260-A of Act, raising following substantial questions of law. i) Whether benefit of deduction u/s.80P(2)(a)(i) of Act could be denied to appellant on footing that, though appellant was said to be co- operative society, it was in fact co- operative bank, within meaning as assigned to such bank under Part V of Banking Regulation Act, 1949? ii) Whether authorities under Income Tax Act, 1961, were competent and possessed jurisdiction to resolve controversy as to whether appellant was co-operative society or co-operative bank, as defined under provisions of Banking Regulation Act, 1949? 3. Learned counsel Shri Sangram S. Kulkarni, appearing for assessee submitted that in view of dictum pronounced by Hon ble Apex Court in case 4 of 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 Assessing Officer for allowing deduction under Section 80P(2)(a)(i), is firstly that activities of assessee is catering to two distinct categories of people namely resident/ordinary members or nominal members. Secondly, whether activities of assessee comes within ambit of co- operative society. These are findings of fact which requires to be adjudicated by Assessing Officer in terms of judgment of Hon ble Apex Court. Thus, learned counsel seeks for remand to Assessing Officer setting aside orders impugned herein. 4. Learned counsel Shri Y.V.Raviraj, appearing for revenue do not dispute same. Learned counsel has no objections to remand matter to Assessing Officer to redo assessment in light of judgment of 5 Hon ble Apex Court in case of Citizen Co-Operative Society s case supra. 5. In view of aforesaid, without answering questions of law raised, impugned orders are set aside and matter is remanded to Assessing Officer to redo assessment in terms of law enunciated by Hon ble Apex Court in case of Citizen Co-operative Society s case supra, as expeditiously as possible. Appeal stands disposed of accordingly. (Sd/-) JUDGE (Sd/-) JUDGE Jm/- Mallikarjun Credit Souharda Sahakari Ltd. v. Income-tax Officer, Ward 1(1), Belagavi (Formerly Income-tax Officer, Ward-1, Nipani)

Metadata

Judgment