INCOME TAX ACT, 1961

Section 80P(2)

Deduction under section 80P(2)(a) - Co-operative society - Whether assessee being co-operative bank -

Assessee in this case was a registered as co-operative societies under the Kerala State Co-operative Societies Act, 1969. The assessment was completed in the assessee's case by denying deduction claimed under section 80P. AO for denying the claim of deduction under section 80P, treated the assessee as a co-operative bank and not a co-operative society. CIT(A) by following the judgment of the jurisdictional High Court in the case of Chirakkal Service Co-operative Bank Ltd. (2016) 384 ITR 490 (Ker) : 2016 TaxPub(DT) 1770 (Ker-HC) allowed the claim of deduction under section 80P. Held: The Larger Bench of the jurisdictional High Court in the case of the Mavilayi Service Cooperative Bank Ltd. held that AO had to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction under section 80P. It was held by the High Court that the AO was not bound by the registration certificate issued by the Registrar of Kerala Cooperative Society classifying the assessee-society as a cooperative society. The High Court held that each assessment year is separate and eligibility shall be verified by the AO for each of the assessment years.

Followed:Mavilayi Service Co-operative Bank Ltd. v. CIT, ITA No. 97/2016 order dt. 19-3-2019.

REFERRED : Citizens Co-Operative Society Ltd. v. Asstt. CIT, Circle- 9(1), Hyderabad dt. 8-8-2017, High Court of Kerala vide order in ITA No. 4 of 2014 dt. 31-1-2014 in the case of M/s Perinthalmanna Service Co-Operative Bank Ltd., order ITA No. 212 of 2013 & Ors., the High Court in the case of M/s Chirakkal Service Co-Operative Bank Ltd. CIT v. Bandipur Club Ltd. (1997) 226 ITR 97 (SC) : 1997 TaxPub(DT) 1250 (SC) and Wankaner Jain Social Welfare Society v. CIT (2003) 260 ITR 241 (Mad.) : 2003 TaxPub(DT) 479 (Mad-HC).

FAVOUR : Matter remanded.

A.Y. : 2015-16

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