2017 (1) TMI 679 - AT - Income Tax

Exemption u/s 80P(2)(a)(vi) - assessee is Co-operative Society and was Federation of Skilled and Unskilled labourers - Held that - Tribunal for assessment years 2006-07, 2008-09 and 2009-10 held the assessee to be eligible to claim the aforesaid deduction. Assessing Officer also acknowledged that the issue was decided in favour of the assessee by the Tribunal in earlier years. However, since the appeal has been filed before the Hon ble Bombay High Court against the decision of Tribunal, the said decision was not applied by the Assessing Officer. The CIT(A) however, has granted relief to the assessee since the facts and issue were identical to the facts and issue before the Tribunal. Tribunal further allowed the claim of deduction under section 80P(2)(a)(vi) of the Act to the assessee following earlier decision of the Tribunal in assessment years 2006-07, 2008-09 and 2009-10. The learned Departmental Representative for the Revenue has failed to controvert the findings of CIT(A) and in the absence of the same, we find no merit in the grounds of appeal raised by the Revenue. Following the same parity of reasoning and since the issue is settled in favour of the assessee by earlier order of Tribunal, we uphold the order of CIT(A) and dismiss the grounds of appeal raised by the Revenue.

Summary

Issues:
1. Eligibility of a Co-operative Society for deduction under section 80P(2)(a)(vi) of the Income Tax Act.
2. Application of previous Tribunal decisions on similar issues.
3. Dispute regarding the collective disposal of labor by the Co-operative Society.

Analysis:
1. The appeal filed by the Revenue challenges the order of CIT(A)-I, Nashik, concerning the assessment year 2010-11 under section 143(3) of the Income Tax Act, 1961. The primary issue raised is whether the Co-operative Society is entitled to exemption from Income-tax under section 80P(2)(a)(vi) despite being a federation of primary societies that supervise and coordinate members' affairs, not engaged in collective labor disposal. The CIT(A) allowed the deduction based on previous Tribunal decisions and upheld by the Apex Court's ruling in a similar case.

2. The Co-operative Society claimed deduction under section 80P(2)(a)(vi) citing precedents set by the Pune Bench of Tribunal and the Apex Court. The Assessing Officer initially disallowed the deduction due to an ongoing appeal by the Revenue before the Bombay High Court against the Tribunal's decision in the Society's favor. However, the CIT(A) granted relief to the Society, citing identical facts and issues as previous Tribunal decisions, which favored the Society's eligibility for the deduction.

3. The Tribunal, in a subsequent case for the assessment year 2012-13, reaffirmed the Society's entitlement to the deduction under section 80P(2)(a)(vi) based on earlier Tribunal decisions. The Revenue's arguments were deemed insufficient to challenge the CIT(A)'s findings, leading to the dismissal of the Revenue's appeal. The Tribunal upheld the CIT(A)'s decision, emphasizing the settled nature of the issue in favor of the Co-operative Society due to consistent Tribunal rulings.

In conclusion, the Tribunal upheld the CIT(A)'s decision to allow the Co-operative Society's deduction under section 80P(2)(a)(vi) based on established precedents and the absence of compelling arguments from the Revenue. The appeal filed by the Revenue was dismissed, affirming the Society's eligibility for the deduction.