TaxTMI 
TaxTMI 
2026 (9) TMI 327
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....ncept of mutuality" exists in the society. 2. Whether on the facts and in the circumstances of the case CIT(A), was right in observing that the decision of Hon'ble Supreme Court in the case of Citizen Cooperative Society was distinguishable. 3. Whether on the facts and in the circumstances of the case CIT(A) was right in holding that the assessee Co-operative Society is eligible to claim deduction u/s 80P despite the assessee society violating the principle of mutuality by diverting its funds for the benefit of selected members associated with the management of society in the form of huge salaries, incentives, commission etc. 4. Whether on the facts and in the circumstances of the case, the CIT(A) was right in allowing the claim of deduction u/s 80P to the assessee society despite disallowing a sum of Rs. 20 lakhs on account of income related to the Nominal members thereby himself holding rupture in mutuality The Appellant crave, leave or reserving the right to amend modify, alter add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. Facts of the case 3. The assessee is a co-operative society. It fil....
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....ee was providing credit facilities to its members in accordance with its objects and registered bye-laws. 8. The assessee further submitted that it was not a cooperative bank and was not carrying on banking business with the public. It had no banking licence from the Reserve Bank of India. Therefore, section 80P(4) was not applicable. It was also contended that the Assessing Officer had not identified any non-member, nominal member or fictitious member pertaining to the assessment year under consideration and had not quantified any income arising from transactions with such persons. 9. During the appellate proceedings, the Assessing Officer was afforded an opportunity of hearing. The learned CIT(A) recorded that, after certain adjournments, the Assessing Officer personally appeared on 12.02.2018 and filed written submissions vide letter No. Dy. CIT/Cent. Circle-1/Jodhpur/2017-18/1502 dated 09.02.2018. The assessee filed a rejoinder on 28.02.2018. 10. The learned CIT(A), while considering the findings recorded in the assessee's case for A.Y. 2010-11 and applying the same to the assessment year under consideration, reproduced and adopted, inter alia, the following findings: ....
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....sion as there is no change in the facts and circumstances of the case as compared to earlier. Notably, no case specific case or quantum of deduction if any relevant to any alleged non-member has been led before me by the AO through in the impugned assessment order as well as in the remand report there is just a passing reference. Similarly, the issue of receipt of share application money/deposits from some members which were treated as unexplained in earlier years stands decided in favour of the Appellant in ITA No. 939/11-12, 938/11-12 & Others for earlier years, therefore, I find no valid reasons to interfere with findings made in earlier years. As no specific case of nominal members has been pointed out which was the case in Citizen Cooperative Society (supra), therefore, I am of the considered view of the A/R that facts of this case are distinguished from the facts of the case of Citizen Cooperative Society (supra) which was before the Hon'ble Apex Court. Notably, Hon'ble Apex Court has allowed deduction to cooperative society u/s 80P even after insertion of sub-section (4) to 80P, which applies to cooperative bank only. Therefore, in view of the decision made earlier by the un....
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....asis, the learned DR submitted that the learned CIT(A) ought to have called for a comprehensive remand report and undertaken further factual verification. He contended that the Tribunal, being the final fact-finding authority, should restore the matter to the AO for bringing the complete facts on record. In support thereof, he relied upon Vijay Kumar Talwar v. CIT (2011) 330 ITR 1 (SC), Kanubhai N. Amin v. Asstt. CIT (1989) 35 TTJ (Ahd.) 306 and Anusayaben A. Doshi v. Joint Commissioner of Income-tax. 16. Per contra, the learned Authorised Representative (AR) relied upon the order of the learned CIT(A). He submitted that the Assessing Officer had been afforded sufficient opportunity during the assessment as well as the appellate proceedings, but had failed to identify any specific nominal member, non-member or fictitious member or to quantify the income arising from any such transaction. The learned AR accordingly submitted that no further opportunity could be granted to the Revenue to improve upon the assessment order and that the appeal deserved to be dismissed. 17. We have considered the rival submissions and perused the material available on record. The principal controve....
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.... any alleged failure of mutuality would automatically disentitle the assessee to the entire deduction under section 80P. We are unable to subscribe to such a broad proposition. The claim under section 80P is a statutory deduction and its admissibility must be examined with reference to the ingredients of the relevant clause. The general doctrine of mutuality cannot be substituted for the specific statutory conditions enacted in section 80P(2)(a)(i). 24. The AO referred to non-members, nominal members, dummy members and eight allegedly fictitious persons. However, despite a detailed scrutiny assessment, he did not identify any such person in the assessment order. He did not set out the relevant membership application, nature of membership, deposit, loan, transaction or the income attributable thereto. The allegations were substantially drawn from enquiries or findings relating to earlier years. No year-specific material was incorporated in the assessment order to establish that the assessee, during A.Y. 2014-15, was carrying on the business of providing credit facilities to the general public. 25. The distinction drawn by the learned CIT(A) between the present case and Citizen....
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....sessee had furnished voluminous material during the assessment proceedings. The AO had issued detailed questionnaires and was afforded full opportunity to examine the material. During the appellate proceedings also, the AO personally appeared before the learned CIT(A) and filed a written submission dated 09.02.2018. The assessee's rejoinder was thereafter obtained. Thus, irrespective of whether the communication filed by the AO was formally described as a remand report, the AO had an effective opportunity to place his factual objections before the learned CIT(A). 29. The decisions cited by the learned DR concerning the Tribunal's position as the final fact-finding authority do not lay down that the Tribunal must invariably restore a matter whenever the assessment order lacks particulars. The Tribunal's duty to appreciate the facts cannot be converted into a duty to enable the AO to make a fresh or roving enquiry to discover the factual foundation of an addition already made. No specific document, member, transaction or material has been produced before us to demonstrate an error in the factual findings recorded by the learned CIT(A). We, therefore, decline the request for remand....