INCOME TAX ACT, 1961

Sedction 80P(2)(a)(i)

Deduction under section 80P(2)(a)(i) - Allowability - Souharda Sahakari C-operative v. Co-operative society -

Assessee a Souharda Credit Co-operative Limited reistered with Registrar of Co-operative Societies, under Karnataka Souharda Sahakari Act of 1997 claimed deduction under section 80P(2)(a)(i). AO denied deduction on the ground that section 80P did not apply in relation to co-operative incorporated under Karnataka Souharda Sahakari Act, 1997 but only to Co-operative society registered under Karnataka Co-operative Societies Act, 1959.Held: Souharda co-operatives are also one form of co-operative societies registered under law in force in the State of Karnataka for registration of co-operative societies. Therefore, conclusion of AO that co-operative societies and co-operatives are different and that cooperative registered as Souharda Sahakari could not be regarded as co-operative society was unsustainable. Therefore, deduction under section 80P(2)(a)(i) could not be rejected on this basis that assessee was a Siouharda Sahakari and not a co-operative society. But matter was referred back to AO for fresh decision after examining other conditions for allowing such deduction because those conditions were not examined by AO.

Followed:Sindhu Credit Souharda Sahakari Niyamita v. ITO [ITA No. 2144/Bang/2019-Order, dated 4-12-2019].

REFERRED :

FAVOUR : In assessee's favour (by way of remand).

A.Y. : 2016-2017

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