| The Tax Publishers2021 TaxPub(DT) 1387 (Bang-Trib) INCOME TAX ACT, 1961
Section 80P(2)
Where AO clearly held that assessee was providing credit facilities to its members and interest paid to members on their deposits and entire interest income received was out of operational income of the assessee and solitary reason for denying the claim of deduction under section 80P(2) was that assessee cannot be termed as a cooperative society coming within the definition of section 2(19) since it was registered under the Karnataka Souharda Sahakari Act, 1997, then this contention was tenable because the entities registered under the Karnataka Souharda Sahakari Act, 1997, fit into the definite term “Co-operative Societyâ€.
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Deduction under section 80P(2) - Allowability - Assessee registered under Karnataka Souharda Sahakari Act, 1997 - Within a co-operative society
The assessee was a Society registered under the provisions of Karnataka Souharda Sahakari Act, 1997. It was engaged in the business of providing credit facilities to its members. The assessment was completed vide Order, dt. 28-12-2018 under section 143(3) of the Income Tax Act. In the assessment order completed, the assessing officer denied the claim of deduction under section 80P(2)(a)(i) of the Income Tax Act. The first appellate authority was of the view that since the assessee was registered under the Karnataka Souharda Sahakari Act, 1997, the same cannot be termed as a Co-operative Society coming within the definition of section 2(19) of the Income Tax Act, and hence, deduction under section 80P(2) cannot be granted. Held: The AO in the impugned assessment order had clearly held that the assessee was providing credit facilities to its members and interest paid to members on their deposits. It was further stated by the assessing officer. that the entire interest income received is out of operational income of the assessee. As mentioned earlier, the solitary reason for denying the claim of deduction under section 80P(2) was that the assessee cannot be termed as a co-operative society coming within the definition of section 2(19) of the Income Tax Act since it was registered under the Karnataka Souharda Sahakari Act, 1997. Since that the assessee was a co-operative society though it was registered under the Karnataka Souharda Sahakari Act, 1997 hence deduction under section 80P was allowable.
Followed: Vitthalray Souharda Pattin Sahakari Niyamit v. UOI 2020 426 ITR 457 (Kar) : 2020 TaxPub(DT) 2633 (Karn-HC), Swabhimani Souharda Credit Co.-operative Ltd. v. Government of India, Ministry of Finance, Department of Revnue (2020) 421 ITR 670 (Karn) : 2020 TaxPub(DT) 504 (Karn-HC) and Siddartha Pattina Souharda Sahakari Niyamitha v. ITO ITA No.1234/Nang/2019, order dt. 26-7-2019/i>.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2016-17
IN THE ITAT, BANGALORE BENCH
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