The Tax Publishers2019 TaxPub(DT) 8145 (Coch-Trib)

INCOME TAX ACT, 1961

Section 80P

Where the AO had to conduct an inquiry into factual situation as to activities of assessee-society to determine eligibility of deduction under section 80P, the instant issue with regard to deduction under section 80P(2) was remanded to AO to examine the activities of assessee-society and determine whether such 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).

Deduction under section 80P - Co-operative society - Allowability -

Assessee-co-operative society registered under the Kerala Co-operative Societies Act, 1969 claimed deduction under section 80P. AO disallowed assessee's claim of deduction under section 80P(2) on the ground that the assessee was doing banking business. Further, AO also disallowed the claim of deduction with regard to interest income received by assessee on investments made with District Co-operative Banks. Held: In view of the decision of the High Court in Mavilayi Service Co-Operative Bank Ltd. v. CIT [ITA No.97/2016, Order, dated 19-3-2019] : 2019 TaxPub(DT) 4909 (Ker-HC), issue pertaining to the deduction under section 80P(2) was restored to the AO. The AO shall examine the activities of the assessee and determine whether its 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). Furthermore, as regards deduction under section 80P with regard to interest income received by assessee on investments made with District Co-operative Banks also, AO shall examine the activities of the assessee-society before granting deduction under section 80P on such interest income.

Relied:Mavilayi Service Co-operative Bank Ltd. v. CIT [ITA No.97/2016, Order, dated 19-3-2019] : 2019 TaxPub(DT) 4909 (Ker-HC)

REFERRED : Citizen Co-operative Society Ltd v. ACIT (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC),Chirakkal Service Co-operative Bank Ltd. v. CIT (2016) 384 ITR 490 (Ker.) : 2016 TaxPub(DT) 1770 (Ker-HC),Perinthalmanna Service Co-Operative Bank Limited v. ITO (2014) 363 ITR 268 (Ker) : 2014 TaxPub(DT) 1572 (Ker-HC),Antony Pattukulangara v. E.N. Appukuttan Nair & Ors. [2012 (3) KHC 726], and The Kizhathadiyoor Service Co-op. Bank Ltd. v. ITO ITA No. 525/Coch/2014 (Order dated 20-7-2016)

FAVOUR : In assessee's favour by way of remand

A.Y. : 2015-16



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