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TMI Blog2018 (8) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of hearing before us and according to us all these points goes to the root of the case, we are of the view that proper adjudication of the issues is required by the AO - Matter remanded back. - ITA No.2831/Bang/2017 - - - Dated:- 17-8-2018 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER For The Assessee : Shri. S. V. Ravishankar, Advocate For The Revenue : Dr. P. V. Pradeep Kumar, Addl. CIT ORDER Per Sunil Kumar Yadav, Judicial Member This appeal is preferred by the assessee against the order of the CIT(A), inter alia, on following grounds: 1. The order of the learned Commissioner of Income-tax [Appeals] - 5, in so far it is against the appellant is opposed to law, weight of evidence, facts and circumstances of the Appellant's case. 2. The appellant denies itself liable to be assessed on total income of ₹ 2,85,81,740/-, as against the returned income by the appellant of Rs.NIL/- after claiming eligible deduction under section 80 P [2] of the Act, on the facts and circumstances of the case. 3. The learned Commissioner of Income-tax [Appeals] is not justified in law i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, on the facts and circumstances of the case. 10. Without prejudice the learned authorities below did not give the appellant a reasonable opportunity of hearing and produce the documents in support of the case of the appellant which is against the principles of natural justice and consequently the impugned orders passed requires to be cancelled on the facts and circumstances of the case. 11. Without prejudice to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies itself liable to be charged to interest under section 234 A 234 B of the Income Tax Act under the facts and circumstances of the case. Further the levy of interest under section 234 A Et 234 B of the Act is also bad in law as the period, rate, quantum and method of calculation adopted on which interest is levied are all not discernible and are wrong on the facts of the case. 12. The appellant craves leave to add, alter, substitute and delete any or all of the grounds of appeal urged above. 13. For the above and other grounds to be urged during the hearing of the appeal the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Registered under the Karnataka Souharda Sahakari Act. The learned DR further contended that Co-operative and Co-operative Societies are 2 different entities. If the co-operative wants to convert itself into a co-operative society, it has to be converted as per the Amending Act 13/2004 which provides conversion of cooperative under the Karnataka Souharda Act, 1997 into Co-operative Society. In the Co-operative Society Act, the Co-operative has also been defined according to which the co-operative means a co-operative registered under the Karnataka Souharda Sahakari Act, 1997 (Karnataka Act 17 of 2000) and includes union co-operative and the federal co-operatives. The learned DR further invited our attention to the Karnataka Souharda Sahakari Act also in which the co-operative word has been defined in clause 2(e) according to which co-operative means a Co-operative including a co-operative bank doing the business of banking registered or deemed to be registered under section 5 and which has the word Souharda Sahakari in its name. In Souharda Sahakari Act, the word co-operative society has also been defined in clause 2(g), according to which the co-operative society means a co-opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction under section 80P(2) of the Act, the AO confined himself to the claim of entitlement and has denied the same having observed that the assessee was engaged in transacting in banking business and thus it is a primary co-operative bank and does not form the second category of co-operative credit societies. When the matter travelled to CIT(A), the CIT(A) has also examined the claim of the assessee in the light of judgment of the Apex Court in the case of Citizen Co-operative Society Ltd., Vs. ACIT (supra), wherein it was held that where the assessee being a co-operative society advances loan to members of general public without any approval from the Registrar of Societies, the activity of the Co-operative Society is in violation of co-operative societies Act and the co-operative credit society was not entitled to deduction under section 80P(2)(i)(a) of the Act. 8. Now, during the course of hearing of the appeals, the learned DR has raised a few valid points which cannot be outrightly ignored. The learned DR has specifically raised an issue that assessee is only a co-operative registered under the Karnataka State Souharda Sahakari Act. Since the assessee is not a co-operativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f registration given under Souharda Act. Relevant provisions of section 6 of Souharda Act is extracted hereunder for the sake of reference: 6. Certificate of registration.- ( 1) Where a Co-operative is registered or deemed to be registered, the certificate of registration duly signed and sealed by the Registrar shall be conclusive evidence that the Co-operative mentioned therein, is a Co-operative registered or deemed to be registered under this Act. ( 2) Notwithstanding anything contained in the Karnataka Co-operative Societies Act, 1959, when a certificate of registration is issued to a Co-operative after conversion of a Co-operative society into a Co-operative, the registration of such Co-operative society under the Karnataka Co-operative Societies Act, 1959, shall be cancelled by the Registrar with effect from the date of issue of certificate of registration under this Act. 11. Similarly, if the co-operatives intend to convert into co-operative societies, conversion is also possible as per Amending Act 13/2004. In the co-operative societies Act, the word co-operative societies and the Co-operatives has also been defined under section 2(c) and 2 (d)(2), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion can only be allowed to the co-operative societies registered under the co-operative societies Act. Without a proper registration under co-operative societies Act, nobody can claim it to be co-operative society as the activities of the co-operative societies are to be controlled under the co-operative societies Act through Registrar of the Cooperative Societies. Since all these new points have been raised during the course of hearing before us and according to us all these points goes to the root of the case, we are of the view that proper adjudication of the issues is required by the AO. We accordingly set aside the order of the CIT(A) and restore the matter to the AO to reexamine all these aspects by making necessary enquiry and investigation and also by passing a reasoned order in this regard. Since we have restored the matter to the AO, we find no justification to adjudicate the issue raised on merit. Accordingly, order of the CIT(A) is set aside and matter is restored to the AO for adjudication of the impugned issue in terms indicated above. 14. In the result, appeal of the assessee stands allowed for statistical purposes. Pronounced in the open court on 17th August, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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