| The Tax Publishers2020 TaxPub(DT) 1043 (Coch-Trib) INCOME TAX ACT, 1961
Section 80P(2)
Where claim of deduction under section 80P(2) was rejected without examining the activities of assessee-society, the issue of deduction under section 80P(2) was remanded to AO to examine the activities of the assessee and determine whether the activities were in compliance with the activities of a co-operative society functioning under the Kerala Co-operative Societies Act, 1969 and accordingly grant deduction under section 80P(2).
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Deduction under section 80P - Co-operative society - Claim rejected without examining the activities of assessee-society - Remand
Assessee-co-operative society was registered under the Kerala Co-operative Societies Act, 1969. AO disallowed assessee's claim of deduction under section 80P(2) on the ground that the assessee was doing business of banking, and therefore, in view of insertion of section 80P(4) with effect from 1-4-2007, it would not be entitled to the deduction under section 80P(2). Further, CIT (A) initially granted deduction under section 80P(2) to the assessee but subsequently, he passed order under section 154, wherein the said claim was denied, by relying on the judgment of the High Court in the case of The Mavilayi Service Co-operative Bank Ltd. &Ors. v. CIT [ITA No. 97/2016 Order, dt. 19-3-2019): 2019 TaxPub(DT) 4909 (Ker-HC). Held: The High Court in the case of The Mavilayi Service Co-operative Bank Ltd. &Ors. v. CIT [ITA No. 97/2016 Order, dt. 19-3-2019): 2019 TaxPub(DT) 4909 (Ker-HC) held that AO had to conduct an inquiry into factual situation as to the activities of assessee-society to determine the eligibility of deduction under section 80P. Thus, CIT (A) ought not to have rejected the claim of deduction under section 80P(2) without examining the activities of the assessee-society. Hence, the issue of deduction under section 80P(2) was remanded to AO to examine the activities of the assessee and determine whether the activities were in compliance with the activities of a co-operative society functioning under the Kerala Co-operative Societies Act, 1969 and accordingly, grant deduction under section 80P(2).
Followed:The Mavilayi Service Co-operative Bank Ltd. &Ors. v. CIT [ITA No. 97/2016 Order, dt. 19-3-2019): 2019 TaxPub(DT) 4909 (Ker-HC)
REFERRED : KilKotagiri Tea &Coffee Estates Co. Ltd. v. ITAT & Ors. (1988) 174 ITR 579 (Ker) : 1988 TaxPub(DT) 1273 (Ker-HC)
FAVOUR : Matter remanded
A.Y. : 2012-13 & 2013-14
INCOME TAX ACT, 1961
Section 80P(2)
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