INCOME TAX ACT, 1961

Section 80P(2)

Deduction under section 80P - Co-operative society - AO failed to examine activities of assessee -

Assessee was a co-operative societies registered under the Kerala Co-operative Societies Act, 1969. AO disallowed the assessee's claim of deduction under section 80P(2) on the ground that the assessee was doing business of banking, therefore, in view of insertion of section 80P(4) with effect from 01-04-2007, the assessee would not be entitled to the deduction under section 80P(2). Held: In view of decision of High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT [ITA No.97/2016, Order, dated 19-3-2019], 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. Accordingly, the instant issue with regard to deduction under section 80P(2) was remanded to AO for fresh consideration, wherein the AO would 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. v. CIT [ITA No.97/2016, Order, dated 19-3-2019]

REFERRED :

FAVOUR : Matter remanded

A.Y. :

INCOME TAX ACT, 1961

Section 80P(2)

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