Ita/86/2015 Of M/S.india Coffee Board Workers Co-Operative Society v. The Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS TUESDAY, THE 10 DAY OF AUGUST 2021 / 19TH SRAVANA, 1943 ITA NO. 86 OF 2015 AGAINST THE COMMON ORDER OF THE INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH, DATED 12.04.2013 IN ITA.NO.590/COCH/2011 (D) ANDC.O.NO.01/COCH/2012(A) FOR THE ASSESSMENT YEAR 2008-09 APPELLANT/ RESPONDENT/ ASSESSEE : M/S.INDIA COFFEE BOARD WORKERS CO-OPERATIVE SOCIETY LTD., MACHINGAL LANE, THRISSUR - 680 001, REPRESENTED BY ITS SECRETARY, SRI.V.T.VARGHESE. BY ADVS.SRI.T.M.SREEDHARAN (SR.)SMT.DIVYA RAVINDRANSRI.V.P.NARAYANAN RESPONDENT/ APPELLANT/ REVENUE : THE COMMISSIONER OF INCOME TAX,TRICHUR - 680 001. AAYAKAR BHAVAN, SHAKTHAN THAMPURAN NAGAR, BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON10.08.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Dated this the 10[th] day of August, 2021 Bechu Kurian Thomas, J. Appellant is a co-operative society. The questions raised forconsideration in this appeal arise from the assessment year 2008-09 andare as follows :- “(a). TDS was not applied on rent payments made totallingRs.1,81,247/- and the latter amount had not been disallowedand assessed under Section 40(a)(ia) r.w.s.194J; (b) Interest incomes received from the assessee's memberstotalling Rs.16,93,3334/- was omitted to be taxed”. 2. Appellant had filed a return of income for the year in questiondeclaring a loss of Rs.2,97,446/-. The assessment was completed by theassessing officer demanding a total income of Rs.35,65,424/-. In thecomputation of income, a deduction of Rs.50,000/- only was allowedunder Section 80P of the Income Tax Act (for short, 'the Act) anddemanded an amount of Rs.10,60,290/- as income tax and interest. Theassessee preferred an appeal contending that the entire income of thesociety is exempted from assessment as per Section 80P(2)(a)(6) of theAct. The CIT (Appeal) by its order dated 28.06.2011 allowed the appealafter finding that the assessee was a society engaged in the collectivedisposal of labour of its members, thereby satisfying Section 80P(2)(a)(vi) of the Act. Dissatisfied with the order of the First Appellate Authority, the department preferred a 2[nd] appeal before the Income TaxAppellate Tribunal, Cochin. After considering the contentions raised, theTribunal held that the issue relating to eligibility of the assessee fordeduction under Section 80P(2)(a)(vi) of the Act required a detailedexamination of the bye law and other relevant materials from the side ofthe assessing officer and accordingly remanded the matter for freshconsideration. The assessee has preferred this appeal under Section260A of the Act which was admitted on two questions of law. 3. However, during the course of the hearing, it was felt that thequestions of law are required to be re-framed. The questions of lawarising in this appeal are therefore re-framed as follows :- 1. Whether the Income Tax Appellate Tribunal was justifiedin remanding the claim for exemption under Section80P(2)(a)(vi) to the assessing officer for freshadjudication.in remanding the claim for exemption under Section80P(2)(a)(vi) to the assessing officer for freshadjudication. 2. Is the appellant eligible for deduction of its income asincome exempt from income tax under Section 80P(2)(a)(vi) of the Act.income exempt from income tax under Section 80P(2)(a)(vi) of the Act. 4. As per Section 80P(2)(a)(vi) of the Act, if the gross totalincome of a co-operative society engaged in the collective disposal of thelabour of its members, includes any income from such collective disposalof the labour of its members, then, while computing the total income of 1. Whether the Income Tax Appellate Tribunal was justifiedin remanding the claim for exemption under Section80P(2)(a)(vi) to the assessing officer for freshadjudication.in remanding the claim for exemption under Section80P(2)(a)(vi) to the assessing officer for freshadjudication. 2. Is the appellant eligible for deduction of its income asincome exempt from income tax under Section 80P(2)(a)(vi) of the Act.income exempt from income tax under Section 80P(2)(a)(vi) of the Act. 4. As per Section 80P(2)(a)(vi) of the Act, if the gross totalincome of a co-operative society engaged in the collective disposal of thelabour of its members, includes any income from such collective disposalof the labour of its members, then, while computing the total income of the assessee, the whole of the amount of profits and gains of business,attributable to such activity of the society shall be deducted. Thequestion for consideration before the Tribunal was whether the assesseewas engaged in the collective disposal labour of its members. Society’sfunctions are based upon its bye laws. The bye laws itself would havethrown light upon the question that arises for consideration in the instantcase. On an examination of the bye laws, the Tribunal could have easilycome to a conclusion whether the income derived by the society wasthrough collective disposal of the labour of its members. Materials likethe bye laws were already on record for the Tribunal to appreciate theclaim of the assessee. We find on a consideration of the order of theTribunal that the remand to the assessing officer was not necessary inthe peculiar facts of the case and on the other hand, as a final factfinding authority Tribunal itself could have appreciated the facts by itself.The assessment relates to the assessment year 2008-09 and at thisdistance of time, it is not in the interests of all to remand it to theassessing officer. In view of the above, we set aside the order of the Tribunal inITA.No.590/Coch./2011 dated 12.04.2013 and remand the same forfresh consideration by the Tribunal itself. The Tribunal shall examine theissue arising under Section 80P(2)(6)(a) of the Act, as expeditiously aspossible, preferably within six months. The assessee is given liberty to place additional materials if so advised, in support of the claim underSection 80P(2)(a)(6) of the Act, in accordance with law. This appeal is therefore allowed. Sd/-S.V.BHATTI, JUDGE Sd/-BECHU KURIAN THOMAS, JUDGE RKM APPENDIX OF ITA 86/2015 PETITIONER'S ANNEXURES : ANNEXURE ATRUE COPY OF THE ASSESSMENT ORDER DATED 17.12.2010 PASSED BY THE INCOME TAX OFFICER,WARD - 2(2), THRISSUR ANNEXURE BTRUE COPY OF THE ORDER DATED 28.06.2011 IN I.T.A. NO.40/R-II/TCR/CIT(A)-V/2010-11 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS-V), COCHIN ANNEXURE CTRUE COPY OF THE INCOME TAX APPELLATE TRIBUNAL'S ORDER IN I.T.A.NO.590/COCH/2011(D) AND C.O.NO.01/COCH/2012(A) DATED 12.04.2013