The Tax PublishersITA Nos. 97 & 135 of 2016, 3, 11, 12, 22, 25, 26, 32, 33, 55, 68, 69 & 72-76 of 2017
2019 TaxPub(DT) 4909 (Ker-HC) : (2019) 414 ITR 0067 : (2019) 309 CTR 0121INCOME TAX ACT, 1961
Section 80P(4)
Where to allow deduction under section 80P(4) to assessee, a primary agricultural credit co-operative bank, the AO has to conduct an enquiry into the factual situation as to the activities of the assessee society and arrive at a conclusion whether benefits can be extended or not in the light of the provisions under sub-section (4) of section 80P.
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Deduction under section 80P(4) - Co-operative society - Banking business -
Assessee was a co-operative society doing banking business and claimed deduction under section 80P(4). Assessee contended that the registration certificate of the assessees issued by the Registrar of Co-operative Societies under sub-section (1) of section 8 of the KCS Act was a conclusive evidence as to the registration of the Society as a Primary Agricultural Credit Society. In such circumstances, if the assessee is having a valid registration under section 8 of the KCS Act, the authorities under the Income Tax Act have to extend the benefit of deduction provided under section 80P, by reason of sub-section (4) thereof, to such societies. Held: As per sub-section (4) of section 80P, the provisions of this section shall not apply in relation to any Co-operative Bank, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. It cannot be contended that, while considering the claim made by an assessee society for deduction under section 80P, after the introduction of sub-section (4) thereof, the AO has to extend the benefits available, merely looking at the class of the society as per the certificate of registration issued under the Central or State Co-operative Societies Act and the rules made thereunder. On such a claim for deduction under section 80P, the AO has to conduct an enquiry into the factual situation as to the activities of the assessee society and arrive at a conclusion whether benefits can be extended or not in the light of the provisions under sub-section (4) of section 80P. Moreover, the law laid down by the Division Bench in Chirakkal 2016 (2) KHC 726 : (2016) 384 ITR 490 (Ker) : 2016 TaxPub(DT) 1770 (Ker-HC) : 2016 (2) KLT 535 : ILR 2016 (2) Ker. 821 is not good law. In view of the law laid down by the Apex Court in Citizen Cooperative Society 2017 KHC 5350 : (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC) : (2017) 9 SCC 364 : AIR 2017 SC 5147 the law laid down by the Division Bench in Perinthalmanna case (2014) 363 ITR 268 (Ker) : 2014 TaxPub(DT) 1572 (Ker-HC) has to be affirmed and this Court does so.
Followed:Citizen Co-operative Society 2017 KHC 5350 : (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC) : (2017) 9 SCC 364 : AIR 2017 SC 5147, Perinthalmanna (2014) 363 ITR 268 (Ker) : 2014 TaxPub(DT) 1572 (Ker-HC)Affirmed:Dy. CIT v. Ace Multi Axes Systems Ltd. 2017 KHC 6827 : (2018) 2 SCC 158 : AIR 2017 SC 5660
REFERRED : Antony Pattukulangara v. E.N. Appukuttan Nair & Ors. 2012 (3) KHC 726 : 2012 (3) KLT SN 129 : 2012 (3) KLJ 727, Thathamangalam Service Co-operative Bank Ltd. & Ors. v. The ITO (TDS) & Ors. (judgment by one among us (PRR, J), dated 14-9-2012 in W.P.(C) No. 14226 of 2012 and connected cases), Shri Chandraprabhu Urban Co-operative Credit Society Ltd. v. ITO, Ward No. 1, Nipani in (Income Tax Appeal Nos. 100043, 100045 of 2014, dt. 21-9-2015) : 2016 TaxPub(DT) 288 (Karn-HC), Gangadharan C.K. & Anr. v. CIT, Cochin 2008 (3) KHC 788 : (2008) 304 ITR 61 (SC) : 2008 TaxPub(DT) 2163 (SC) : 2008 (10) SCALE 426 : 2008 (3) KLT 472 : (2008) 8 SCC 739 : 2008 (228) ELT 497, Aditanar Educational Institution v. Addl. CIT 1997 KHC 772 : (1997) 224 ITR 310 (SC) : 1997 TaxPub(DT) 1051 (SC) : (1997) 3 SCC 346 : AIR 1997 SC 1436 : 1997 (224) ITR 310, Bajaj Tempo Ltd. v. CIT 1992 KHC 859 : (1992) 196 ITR 188 (SC) : 1992 TaxPub(DT) 1271 (SC) : (1992) 3 SCC 78 : AIR 1992 SC 1622, Commissioner of Central Excise, Chandigarh v. Doaba Steel Rolling Mills 2011 KHC 4586 : 2011 (269) ELT 298 : (2010) 14 SCC 751, Antony Pattukulangara 2012 (3) KHC 726 : 2012 (3) KLT SN 129 : 2012 (3) KLJ 727, Shri. Basaveshwar Urban Co-operative Credit Society Ltd. v. Income Tax Officer (judgment of a Division Bench of Karnataka High Court dated 21-9-2015 in I.T.A. No. 100066 of 2014), Karakulam Service Co-operative Bank Ltd., Civil Appeal No. 11288 of 2016 arising out of ITA No. 516 of 2014
FAVOUR : Against the assessee/matter remanded.
A.Y. :
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