By TIOL News Service

BANGALORE, NOV 05, 2018: THE ISSUE BEFORE THE DIVISION BENCH IS - Whether certain matters calls for remand & fresh enquiry rather than rendering any finding on the merits of case, if dictum laid down by Apex Court under identical circumstances is available on record. YES IS THE VERDICT.

Facts of the case:

The assessee had filed its return for the relevant A.Y declaring NIL income after claiming exemption u/s 80P at Rs.87,10,540/-. Against the said return, assessment was framed u/s 143(3) denying the exemption u/s 80P on the ground that the Assessee Society was a Bank and was hit by the provisions of Section 80P(4).

On appeal, the CIT(A) held that Assessee was not a Co-Operative Bank, therefore not hit by provisions of Section 80P(4). On further appeal, the ITAT remanded the matter to the AO for reconsideration afresh, in the light of the dictum of the Supreme Court in the case of the Citizen Co-Operative Society Ltd. V.s ACIT - 2017-TIOL-287-SC-IT.

High Court held that,

++ the Tribunal considering the entire material on record in proper perspective, recorded a finding that in view of the dictum of Supreme Court in an identical circumstances in the case of Citizen Co-Operative Society Ltd. Vs. ACIT - 2017-TIOL-287-SC-IT, wherein it was held that, business of the Society does not amount to that of Co-Operative Bank, so as to come within the mischief of Section 80P(4). Since the Assessee was catering to the needs of non-members also, the principle of mutuality is tainted and therefore the benefit of Section 80P was denied. Whether the assessee accepting the deposits even from non-members, has to be held enquiry afresh by the AO. Therefore, the Tribunal has remanded the matter to the AO for fresh enquiry and the same is in accordance with law.

(See 2018-TIOL-2337-HC-KAR-IT)