Commissioner of Income Tax vs Bhopal Co-operative Central Bank Ltd.

S.S. Sharma, J.—This order shall also govern the disposal of Misc. Civil Cases Nos. 89 of 1986, 90 of 1986, 91 of 1986 and 92 of 1986.

This is a reference application u/s 256(2)of the Income Tax Act, 1961 (hereinafter referred to as the Act).

The question sought to be referred is as under:

"Whether the Appellate Tribunal committed an error in law in treating the income of the assessee from interest on securities, commission, subsidy, donation and locker rent as exempt u/s 80P of the Income Tax Act, 1961 ?"

The Tribunal, while rejecting the application of the Department u/s 256(1) of the Act, had placed reliance on a decision of this court in Commissioner of Income Tax Vs. Dhar Central Co-operative Bank, . With regard to the income from interest, reliance was placed on a decision of the Supreme Court in The Bihar State Co-operative Bank Ltd. Vs. The Commissioner of Income Tax, With regard to the donation, the amount was only Rs. 5,000 in the assessment year 1971-72, which was treated as a gift and thus was not held to be income in the case of bank. It was also observed that it should otherwise have been excluded from the assessee''s income.

In the case of Commissioner of Income Tax Vs. Dhar Central Co-operative Bank, , the question which had been referred were as under :

"(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the income from commission and brokerage, subsidy from Government, admission fee, incidental charges, financial penalties and miscellaneous income is not exempted under the provisions of Section 80P(2)(a)(i) of the Income Tax Act, 1961 ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment in this case for the assessment year 1974-75 was rightly reopened u/s 147(b) of the Income Tax Act, 1961 ?"

and they were answered in the negative and against the Department.

In the case of The Bihar State Co-operative Bank Ltd. Vs. The Commissioner of Income Tax, their Lordships had found that the "High Court was in error in treating interest derived from deposits as not arising from the business of the bank and, therefore, hot falling within the income exempted under the notification." The appeal was thus allowed and the order of the High Court was set aside.

In view of these decisions and Section 80P of the Income Tax Act, no question of law arises as has been contended by learned counsel for the Department for which a direction may be required to be given to the Tribunal for stating the case. In our opinion, even with regard to the donation amount, no question of law arises.

These applications are, therefore, dismissed summarily.