2012 (3) TMI 559 - AT - Income Tax

Entitled to exemption under section 80P(2)(a)(i) - Held that - We find that the Hon ble Supreme Court, in the case of CIT vs Ponni Sugars and Chemicals Ltd. reported in 2008 (9) TMI 14 - SUPREME COURT , has remitted the matter back to the file of the Tribunal for examining the Memorandum of Association, Articles of Association, return of income and status of business indicated in the return of income of the Co-operative society to prove that the respective societies have engaged themselves in carrying on any of the several businesses referred to in sub-section (2) of section 80P of the Act. In the above facts and circumstances, in our considered opinion, it shall be fair and in the interest of justice to restore the issue back to the file of the Assessing Officer for adjudication afresh after examining the Memorandum of Association, Articles of Association and other relevant documents

Summary

Issues involved:
- Interpretation of section 80P(2)(a)(i) of the Income-tax Act, 1961 regarding deduction for interest received by the assessee from its members.
- Verification of Memorandum of Association, Articles of Association, return of income, and status of business for eligibility under section 80P(2)(a)(i).

Detailed analysis:
1. Interpretation of section 80P(2)(a)(i):
The appeals were filed by the Revenue against the orders of the ld.CIT(A) directing the Assessing Officer to grant deduction u/s 80P(2)(a)(i) of the Act for interest received by the assessee from its members. The issue was previously decided by the Tribunal in a consolidated order, and the matter was remanded back by the Hon'ble Supreme Court for examination of the Memorandum of Association, Articles of Association, and the status of business indicated in the return. The Apex Court emphasized that the eligibility conditions in the schemes must be considered. The ld. DR argued that similar cases had been decided in favor of the Revenue, and requested the appeals to be allowed based on those decisions.

2. Verification of documents for eligibility under section 80P(2)(a)(i):
The ld. A.R of the assessee contended that the matter was remanded back by the Supreme Court for verification of the Memorandum of Association, Articles of Association, return of income, and status of business. The Hon'ble Supreme Court had directed the Tribunal to examine whether the societies had engaged in businesses specified in section 80P(2). The Tribunal noted that the necessary documents were not on record, and both parties agreed to restore the issue to the Assessing Officer for proper verification. The Tribunal decided to allow the appeals for statistical purposes and instructed the Assessing Officer to adjudicate the issue afresh after considering the Supreme Court's directions and relevant Tribunal decisions.

In conclusion, the Tribunal allowed the appeals of the Revenue for statistical purposes and ordered the issue to be restored to the Assessing Officer for fresh adjudication after verification of the necessary documents in line with the Supreme Court's directions. The decision highlights the importance of examining the Memorandum of Association, Articles of Association, and other relevant documents to determine the eligibility of the assessee under section 80P(2)(a)(i) of the Income-tax Act, 1961.