2023 (9) TMI 592

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....idering the facts of the case. 3. That the appellant craves to leave add alter or a mend any of the ground at or before hearing." 2. The assessee is a credit co-operative society engaged in providing credit facilities to its members. The assessee filed its return of income for the year under consideration on 15.09.2020 declaring total income at nil after claiming deduction u/s 80P of the Act of Rs. 1,59,22,236/-. During the scrutiny assessment the AO disallowed the claim of deduction u/s 80P of the Act for want of any explanation on behalf of the assessee to the show cause notices issued u/s 142(1) of the Act. On appeal the Ld. CIT(A) confirmed the disallowance made by the AO by following the judgment of Hon'ble Supreme Court in case of Totgars Co-operative Sale Society Ltd. vs. ITO 188 taxmann.com 282. 3. Before us ld. Counsel for the assessee has submitted that the assessee society is established under Society Act and its members are the employees of the telephone and postal departments. The assessee society is accepting the deposits from its members and providing loans and advances to them. During the year, the assessee society has an interest income of Rs. 8,63,0....

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....ative societies advances to its members. The interest earned form the schedule banks are only amounting to Rs. 3,94,245/- from savings accounts and most importantly assessee have no fixed deposits with any scheduled banks and the surplus is just lying with co-operative societies(Indore Premier Co-operatives Societies) whose income is also attributable to Business of Assessee Society as the object of Co-op Society providing credit is the only sole objective and not engaged in any other work. Therefore, Ld. AR submitted that the ultimate net profit of the co- operative society is within the ambit of Act us 80P(2)(a)(i) being primary object of the assessee society to carry on business of banking or providing credit facilities to its members 6. He has relied upon the decision of Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-operative Society Ltd. (230 Taxman 309) and submitted that the Hon'ble High Court has held Cooperative Society which is carrying on the business of providing credit facilities to its members, earns profits and gains of business by providing credit facilities to its members. The interest income so derived or the capital, if not immediatel....

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.... 3. Deduction from Total Income under Chapter VI-A 11. Thus, it is clear that after filing the return of income the assessee did not respond to the various notices issued by the AO and finally the AO had no option but to pass best assessment order. On appeal the Ld. CIT(A) has confirmed the disallowance made by the AO simply by following the judgment of Hon'ble Supreme Court in case of Totagars Co-operative Society vs. ITO (supra) without even considering the fact that whether entire interest income earned by the assessee from other than the members of the assessee society. As per the provisions of section 80P the business income of the Co-operative Society is eligible for deduction u/s 80P of the Act. In case of credit Cooperative Society engaged in providing credit facilities to its members the interest income from the credit facility provided to the members would be a regular business income of the society eligible for deduction u/s 80P. Further as per the section 80P(2)(d) the interest received on the deposit with other cooperative society is also eligible for deduction u/s 80P of the Act. If the deposit is made with a Cooperative Bank then the said bank would be co....

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....ow-Cause 01.08.2002 Not NA No 3. Cases where variation is proposed Update the table of opportunities given to include the details of SCN or additional SCN issued and further notices including personal hearing through VC given - Table updated. 3.1 Use the text of SCN issued to reproduce: - Мо अध्यक्ष आर. एस. होरा इ. मं. डाक-तार कर्म. स. संस्था म. इन्दौर (म. प्र. ) Page 2 of 9 through Verkation Unit This 1421) through Verification Livit Document 2 AAAJIC 1590- INDORE MANDAL DAK TAR KARAMCHAR SAHAKARI SANSTHA MARYADIT A.Y. 2020-21 TRAVAST/S/1433/2022-23/1044879438(1) . Complete description of issues involved (issue wise) The assessee filed its return of income for the A.Y. - 2020-21 on 15.09.2020 vide e- filing acknowledgement no. 552994571150920 by showing total income of Nil. The case was selected for limited scrutiny assessment under the E-assessment Sc....

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....ically served to the assessee by the Verification Unit. Therefore, penalty proceeding u/s 272A(1)(d) of the Act is proposed to be initiated separately for non-compliance to notice u/s 142(1) of the Act. 3. From the above, it is seen that despite adequate opportunities given to the assessee, the assessee has not submitted any reply or response to any of the said notices. 4. As per provisions of Section 144 of Income Tax Act, 1961, if the assessee fails to comply with terms of a notice issued u/s 143(2) or 142(1), the Assessing Officer is to gather relevant material and to make the assessment of the total income to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment. Relevant provision is reproduced hereunder:- "Best Judgment assessment: Section 144(1): If any person- कोष Ten TMENT 1. Fails to make the return required under sub section (1) of Section 139 and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or 2. Fails to comply with all the terms of a notice issued under sub-section (1) of Section 142 (or fa....