TaxTMI 
TaxTMI 
2022 (4) TMI 394
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....l filed by the assessee in ITA No. 122/Nag/2018 for assessment year 2013-14, wherein the impugned order has been assailed before us on the following grounds of appeal: "1. That the notice and the order of the learned Pr. Commissioner of income tax, Nagpur-1, Nagpur passed u/s.263 is bad in law and wrong on facts. On the facts and circumstances of the case, the assessment order passed by the AO u/s.143(3) was neither erroneous nor prejudicial to the interest of the revenue and the notice u/s.263 and the proceedings thereafter, are illegal and liable to be quashed. 2. The learned Pr. Commissioner of income tax erred in law and on facts in directing the AO to recompute the business profits by verification and re-computation of deduction allowable u/s.80P(2)(a)(i) of the Act. On the facts and circumstances of the case, the deduction claimed u/s.80P was correct and justified. 3. The learned Pr. Commissioner of income tax erred in law and on facts in directing the AO to make disallowance of contribution to Provident Fund of Rs. 3,38,064/- u/s.36(i)(va) being paid late. On the facts and circumstances of the case, the AO had duly verified the details of payments ....
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....e for deduction u/s.80P(2)(d) of the Act; and (iv). that the Assessing Officer had lost-sight of the fact that the delayed deposits of the employees contribution towards PF was not eligible for deduction in the hands of the assessee u/s. 36(1)(va) of the Act. On the basis of the aforesaid observations the Pr. CIT called upon the assessee to explain as to why the order passed by the Assessing Officer u/s.143(3) of the Act, dated 09.02.2016 may not be revised by him u/s.263 of the Act. 4. As the explanation of the assessee did not find favour with the Pr. CIT, therefore, he vide his order passed u/s.263 of the Act, dated 20.03.2018 set-aside the order passed by the Assessing Officer u/s.143(3) dated 09.02.2016 and directed him to recompute the business profits of the assessee by making necessary disallowance u/s.36(1)(va) of the Act a/w. modification of its claim for deduction u/s.80P(2)(a)(i) of the Act. 5. The assessee being aggrieved with the order of the Pr. CIT has carried the matter in appeal before us. 6. We have heard the Ld. Authorized Representative of both the parties, perused the orders of the lower authorities and the material available on record, as well as con....
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....s had carried out transactions with its nominal members, therefore, for the said reason it was to the said extent not eligible for deduction u/s.80P of the Act. It was submitted by the Ld. AR that involving identical facts the ITAT, Nagpur in the assessee's own case for the assessment year 2010-11 i.e. ITA No.49/NAG/2014, dated 26.06.2015 had allowed its claim for deduction u/s.80P of the Act. It was submitted by the Ld. AR that pursuant to the order of the Tribunal in its own case for the assessment year 2010-11, the Assessing Officer had thereafter, while giving appeal effect allowed its claim for deduction u/s.80P and determined its income at Rs. Nil. On a similar footing, it was submitted by the Ld. AR that the Assessing Officer while framing assessment u/s.143(3) of the Act in the case of the assessee for the assessment year 2007-08 had after accepting the nominal members as members of the assessee society allowed its claim for deduction u/s.80P of the Act. It was submitted by the Ld. AR that now when during the year under consideration there was no change in the activities of the assessee society with its members, therefore, the inconsistent approach adopted by the department....
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.... to be set-aside. 9. Per contra, the Ld. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. 10. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. Adverting to the view taken by the Pr. CIT that as the assessee society was as per its bye-laws permitted to admit nominal members in addition to its regular members, the failure on the part of the Assessing Officer in not bringing on record the transactions entered into by the assessee society with its nominal members i.e. total deposits received, loans given to the nominal members etc. had rendered his order erroneous in so far as it was prejudicial to the interest of the revenue, for the reason, that pursuant to the judgment of the Hon'ble Supreme Court in the case of Citizen Co-operative Society Ltd. Vs. ACIT (supra), as nominal members are not akin to members in real sense, therefore, deduction u/s.80P of the Act would not be available to the assessee ....
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.... assessee society is registered includes within the definition of "Member" a "Nominal Member", there can be no question of denial of benefit u/s. 80P(2)(a)(i) of the Act qua the interest income pertaining to the transactions entered into by the assessee society with its Nominal Members. Our aforesaid view is supported by the orders of the coordinate bench of the Tribunal in the case of Vainganga Nagari Sahakari Pat Sanstha Ltd. Vs. ITO, Ward-2, Bhandara, ITA No.49/NAG/2020, dated 21.06.2021 and that in the case of M.S.E.B Employees Co-operative Credit Society Ltd. Vs,, ITO, Ward-3, Nagpur, ITA No.369/NAG/2019, dated 19.02.2020. We, thus, in terms of our aforesaid observations are unable to persuade ourselves to subscribe the view taken by the Pr. CIT as regards the aforesaid issue in hand on the basis of which he had held the order passed by the Assessing Officer as erroneous in so far it was prejudicial to the interest of the revenue u/s.263 of the Act. 11. Adverting to the view taken by the Pr. CIT that the interest income earned by the assessee society on its deposits with scheduled banks would not be eligible for deduction u/s.80P(2)(a)(i) of the Act, we are unable to persua....
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....12. Adverting to the view taken by the Pr. CIT that the Assessing Officer had failed to disallow the assessee's claim for deduction of delayed deposit of employees share of contribution towards PF of Rs. 3,38,064/- u/s.36 (i)(va) of the Act, therefore, the same has rendered his order as erroneous in so far it was prejudicial to the interest of the revenue u/s.263 of the Act, we are afraid that the same does not find favor with us. As stated by the Ld. AR, and rightly so, the Hon'ble Supreme Court in the case of CIT Vs. Alom Extrusions Ltd. (2009) 319 ITR 0306 (SC), had held, that the omission of the "second proviso" to section 43B and the amendment of the "first proviso" by the Finance Act, 2003, had brought uniformity in payment of tax, duty, cess and fee on the one hand and contributions to employees welfare funds on the other hand, which being curative in nature would be effective retrospectively w.e.f. 01.04.1988 i.e. the date of insertion of the "first proviso". At this stage, we may herein observe, that the Hon'ble Apex Court in its aforesaid judgment had set-aside the order of the Hon'ble High Court of Bombay in the case of CIT Vs. Pamwi Tissues Ltd. (2009) 313 ITR 0137(Bom)....