INCOME TAX ACT, 1961

Section 250

Appeal CIT(A) - Deduction under section 80P(2) - Assessee, credit co-operative bank, whether can claim deduction under section 80P -

Assessee, a co-operative bank, had claimed deduction under section 80P. AO denied the deduction claimed alleging that assessee was primarily engaged in business of banking and therefore, in view of provisions of section 80P(4) which was inserted with effect from 1-4-2007, assessee was not entitled to deduction under section 80P. Held: CIT(A) had initially allowed the appeals of assessee and granted deduction under section 80P(2). Subsequently, CIT(A) passed order under section 154 wherein the claim of deduction under section 80P was denied, by relying on the judgment of High Court in the case of The Mavilayi Service Co-Operative Bank Ltd. v. CIT [ITA No.97/2016 Order, dated 19-3-2019] : 2019 TaxPub(DT) 4909 (Ker-HC). CIT(A) ought not to have rejected the claim of deduction under section 80P(2) without examining the activities of the assessee-society. AO had to conduct an inquiry into the factual situation as to activities of assessee society to determine the eligibility of deduction under section 80P. Therefore, matter was remanded back to AO who shall examine the activities of the assessee and accordingly grant deduction under section 80P(2).

Followed:DCIT v. Ace Multi Axes Systems Ltd. 2017 TaxPub(DT) 5071 (SC) The Citizen Co-Operative Society Limited v. ACIT (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC) The Mavilayi Service Co-Operative Bank Ltd. v. CIT [ITA No.97/2016 Order, dated 19-3-2019] : 2019 TaxPub(DT) 4909 (Ker-HC) The 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)

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2012-13 to 2017-18

INCOME TAX ACT, 1961

Section 80P(2)

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