INCOME TAX ACT, 1961

Section 80P(2)

Deduction under section 80P(2) - Interest income received on investments - Allowability -

AO completed assessment in the assessee's case by denying deduction claimed under section 80P. AO denied the claim of deduction under section 80P by treating the assessee as a co-operative bank and not a co-operative society. Further interest received from the investments were denied deduction under section 80P by treating the same as income from 'other sources'. Held: High Court in case of Mavilayi Service Co-operative Bank Ltd. [[ITA No. 97/2016 Order, dated 19th March, 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 and is not bound by the registration certificate issued by Registrar of Cooperative Society classifying the assessee-society as a cooperative society. Thus the issue of deduction under section 80P(2)(a)(i) was restored to AO who should examine the activities of assessee and determine whether their activities were in compliance with the activities of a cooperative society.

REFERRED : Dy. CIT v. M/s. Ace Multi Axes Systems Ltd. (2018) 400 ITR 0141 (SC) : 2017 TaxPub(DT) 5071 (SC) The Citizen Co-Operative Society Ltd. v. Asstt. CIT (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC) M/s. The Totgars´ Cooperative Sale Society Ltd. v. ITO (2010) 322 ITR 283 (SC) : 2010 TaxPub(DT) 1466 (SC) Sabarkantha Zilla Kharid Vechan Sangh Limited v. CIT (1993) 203 ITR 1027 (SC) : 1993 TaxPub(DT) 1481 (SC)

FAVOUR : In assessee's favour by way of remand

A.Y. :

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