INCOME TAX ACT, 1961

Section 80P(2)

Deduction under section 80P - Co-operative society - Assessee's claim rejected without examining its activities -

Assessee was a co-operative society registered under the Kerala Co-operative Societies Act, 1969. AO denied assessee's claim of deduction under section 80P(2). However, CIT(A) allowed the assessee's claim and granted deduction under section 80P(2). Subsequently, the CIT(A) passed order under section 154, wherein the claim of deduction under section 80P(2) 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 has 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. Accordingly, in instant case, the CIT (A) ought not to have rejected the claim of deduction under section 80P(2) without examining the activities of the assessee. Therefore, the matter was remanded to the AO for examining 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, consider the allowability of deduction under section 80P(2).

Relied: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 :

FAVOUR : In assessee's favour by way of remand

A.Y. :

SUBSCRIBE FOR FULL CONTENT