Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 129 - AT - Income TaxDeduction U/s 80P - breach of principles of mutuality as identity between contributor and participant was lost - Held that:- The assessee society has carved out two classes of members namely ‘Active Members’ and ‘Nominal Members’. The Active Members as per bye laws are those who have attended General Meeting of the society once in last five years and they have given deposits to assessee society or availed loan from assessee society atleast once in five year but there is another class namely ‘Nominal Members’ are those society members who as per bye laws are given membership after retirement. These members do not avail loan nor give deposits. While as per audited financial statements which are placed on record, these nominal members are allowed to keep their post–retirement benefits savings with the assessee society. These nominal members are not allowed to borrow from assessee society based on material on record which is before the tribunal. This aspect whether there is any breach of principles of mutuality on account of loss of complete identity between contributors and participants of surplus requires to be verified from records of the assessee society in context of recent decision of Hon’ble Supreme Court in the case of The Citizen Co-operative Socierty Limited (2018 (1) TMI 290 - SUPREME COURT OF INDIA) so far as these ‘Nominal Members’ are concerned and to determine whether the assessee society gets disentitled to deduction u/s 80P based on breach of principles of mutuality as identity between contributor and participant was lost which the AO shall determine in set aside proceedings. The Constitution of India vide Article 265 provides that taxes not to be imposed save by authority of law . No tax shall be levied or collected except by authority of law. The mandate being to levy and collect correct taxes on correct income computed under authority of law. The tribunal has wide powers to pass such orders as it deems fit which is the mandate of Section 254(1) of the 1961 Act . Thus in our considered view under these circumstances, in the interest of justice and fairness to both the parties, the matter need to be restored to the file of the AO for limited purposes of verifying as to the rights, roles , entitlements , duties and responsibilities of these ‘Nominal Members’ in context of the decision of the Hon’ble Supreme Court in the case of ‘The Citizen Co-operative Society Limited(supra) as per our elaborate discussions above. Appeal of the Revenue is allowed partly for statistical purposes
|