TMI Blog2020 (2) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 809(2)(a)(vi) of the Act, then the AO shall allow deduction u/s.80P(2)(a)(vi) of the Act to the assessee society. Accordingly, we restore the matter to the file of AO for consideration of the claim of the assessee as per our above observations and the assessee shall cooperate with the AO for early disposal of the case. - Decided in favour of assessee for statistical purposes - ITA No.377/CTK/2018 And Cross Objection No.08/CTK/2019 - - - Dated:- 29-1-2020 - Shri C.M. Garg, JM And Shri L.P. Sahu, AM For the Assessee : Shri K.K.Bal, Advocate For the Revenue : Shri M.K.Goutam, CIT-DR ORDER PER L.P.SAHU, AM: The Revenue has filed this appeal against the order of CIT(A), Cuttack, dated 30.07.2018 for assessment year 2014-2015 and the assessee has filed cross objection. 2. The Revenue in its appeal has raised the following grounds :- Ground No. 1 : On the facts and in the circumstances of the case, the CIT(Appeals) is not justified in allowing the deduction u/s 80P(2)(a)(vi) of the IT. Act, 1961 ignoring the decision of the jurisdictional High Court rendered in the assessee's own case for the A.Y. 1984-85 reported in (19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after observing as under :- I have perused the facts of the case and the detailed submissions of the assessee. It is seen that for the assessment years 2003-04 to 2008-09 the AO had rejected the claim of decuction u/s. 80P(2)(a)(vf) of the assessee but the 1TAT, Cuttack had decided the issue in the assessee's favour and granted the said deduction. For the assessment years 1989-90 to 1992-93 also, the IT AT had accepted the claim of deduction of the assessee and the department had filed an appeal against the said order in the Odisha High Court. The Hon'ble Odisha High Court vide their order dt.08.12.2008 disposed the appeal by making the following observation. As the matter relates to disputed questions of fact, we remand the matter to the tribunal to record a finding as to whether income had been obtained by self-employment by the members of the society collectively or by employing business through contractors. In case it is done by self-employment, the society' shall be entitled for getting exemption otherwise not. The tribunal called for a remand report from the Assessing Officer based on the direction of the Odisha High Court. In his report, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract work has been upheld. It was also submitted by the ld. DR that when the only work carried out by its members was overall supervision like any other prudent businessmen and the actual supervision at the field was done by the paid employees of the society and outside labourers actually carried out the work, therefore, the assessee cannot be entitled to avail the deduction u/s 80P(2)(a)(vi) of the Act. Accordingly, ld. DR submitted that the order of the AO should be upheld. 7. On the other hand, ld.AR supported the order of CIT(A) and also filed written submission to substantiate his claim as under :- The appellant is the Cooperative Society claiming deduction u/s 80P(2)(a)(vi) of the ITAT. From A.Y. 1972-73, the business income of Labour Cooperative Societies formed by persons of small means for the collective disposal of labour is exempt under this Section. To ensure that this exemption is not exploited by others, the Section requires that the exemption under this provision is available only where the voting rights in such society are confined to the labourers themselves, cooperative societies providing assistance to them and the State Government. If the cooperative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis, since each assessment year is independent as decided by Punjab Haryana High Court in the case of Bandi Cooperative Labour and Construction Society v CIT 300 ITR 107(2008). The appellant's case was subject matter of judicial scrutiny by the jurisdictional High Court which is reported in 208 ITR 326(1994). In the said order, the Hon'ble High Court in clear and unambiguous terms denied the exemption u/s 80P(2)(a)(vi) and confirmed the orders of the lower authorities. The said order has reached finality as the appellant has not filed any SLP before the Supreme Court. In TA No. 67 to 70 of 2000 decided on 08.12.2008, the matter was set aside by the jurisdictional High Court to ITAT to decide the disputed question of fact. During the course of the hearing before the High Court, the counsel of the appellant mislead the Court which is evident from the following observation: Mr. Susant Das, learned counsel appearing for the assessee submits that the ' order passed by the Tribunal allowing exemption to the assessee is in accordance with the law and also as per the decision of this Court in OJC No. 3781 of 1992 This is a clear and absolute wro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years, the appellant has not produced any books of accounts, has not deducted tax at source on any payments to sub-contractors and nor the active members are paying any taxes for executing the work and pocketing the profits from the business. If it is a fact that the contracts are executed by the members of the society, which are in crores, at least the members need to file their returns. But none of the members are filing any returns showing income from the appellant's society. The income of the society is always estimated as no proper books of account are maintained and how statutory audit takes place without proper books of account is anybody's guess. Why no proper cash book is produced for examination? Because whatever cash book maintained depicts huge cash withdrawal and paid to individual members that to only a few and no accounts maintained in this regard and no TDS is ever deducted. c. If the work is executed by collective disposal of its members does that mean no outside labours are employed? As found from the remand report the society employs a large contingent of outside labours too and if it is without the help of contractors then why no labour licence or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls vouchers to substantiate its claim made in the return of income. It was also noted by the AO that as the books of accounts were not produced, therefore, it is not possible to verify the correctness and completeness of the audited statement of account of the assessee. Further the AO noted that although the objectives of the assessee society appear to be in consonance with the provision of 80P(2)(a)(vi) of the Act, in view of the provisions of section 101 of the Indian Evidence Act, 1872 the burden was on the assessee to prove with supporting evidence/fact that during the relevant period the conditions for claiming deduction u/s 80P(2)(a)(vi) of the Act were satisfied. Accordingly, the AO denied the claim of the assessee for deduction u/s 80P(2)(a)(vi) of the Act. However, the CIT(A) has followed the consistency of the decision of the Tribunal in assessee s own and allowed the claim of the assessee for deduction u/s.80P(2)(a)(vi) of the Act. The objection of the ld. DR before us is that when the only work carried out by its members was overall supervision like any other prudent businessmen and the actual supervision at the field was done by the paid employees of the society and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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