INCOME TAX ACT, 1961

Section 80P

Deduction under section 80P - Co-operative society - Whether a Souharda co-operative registered under the Karnataka Souharda Sahakari Act would be considered as a co-operative society for purpose of deduction -

Assessee was a Souharda co-operative registered under Karnataka Souharda Sahakari Act 1997. It claimed deduction under section 80P. AO took the view that the deduction under section 80P was available only to cooperative societies and not to Souharda co-operative. According to him, the cooperative and the cooperative societies were two different entities. Thus, as the assessee was a cooperative, the AO held that it was not entitled to deduction under section 80P. CIT(A) upheld the order of the AO. Held: In view of High Court decision in the case of Swabhimani Souharda Credit Co-operative Ltd. v. Government of India Ministry of Finance & Ors. 2020 TaxPub(DT) 0504 (Karn-HC), the entities registered under the Karnataka Souharda Sahakari Act, 1997 fit into the definition of “co-operative society” as enacted in section 2(19) and accordingly, they would be entitled to stake their claim for the benefit of section 80P. Therefore, in instant case, the assessee was entitled for deduction under section 80P. However as there was no occasion for the AO to examine the claim of the assessee in terms of provisions of section 80P, the matter was remanded to the AO for examining the same in accordance with the provisions of section 80P.

Followed:Swabhimani Souharda Credit Co-operative Ltd. v. Government of India Ministry of Finance & Ors. 2020 TaxPub(DT) 0504 (Karn-HC)

REFERRED :

FAVOUR : Matter remanded.

A.Y. :

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