2012 (8) TMI 1059 - AT - Income Tax

Deduction under section 80P(2)(a)(i) - Held that - The Tribunal in assessee s own case while deciding the issue gave a finding that the assessee has to be treated as a co-operative society in view of the provisions contained in Regional Rural Banks Act, 1976. If so, it would be eligible for deduction u/s 80P(2)(a)(i) of the Act. In view of the specific finding given by the Tribunal in the assessee s own case, respectfully following the decision of the co-ordinate Bench of this Tribunal, the ground of appeal raised by the assessee is allowed.

Summary

Issues:
- Eligibility for deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 for assessment years 2007-08, 2008-09, and 2009-10.

Analysis:
1. ITA No. 1088/Mds/2012:
- The assessee, a bank, filed a return showing income before deduction under section 80P(2)(a)(i) at Rs. 7,03,54,000. The Assessing Officer initially assessed the income at nil, treating the assessee as an 'Association of Persons.' Subsequently, the Commissioner of Income Tax set aside the assessment under section 263, and the Assessing Officer then assessed the income at Rs. 7,03,53,650, denying the deduction under section 80P due to an amendment.
- The CIT(Appeals) upheld the Assessing Officer's order based on a circular stating that Regional Rural Banks (RRBs) are not eligible for the deduction under section 80P from 2007-08 onwards. The Tribunal, in a previous case, held that the assessee, being an RRB, should be treated as a co-operative society under the RRB Act, making it eligible for the deduction. Consequently, the Tribunal allowed the appeal.

2. ITA Nos. 1091 & 1092/Mds/2012:
- The facts and issues in these appeals were similar to ITA No. 1088/Mds/2012. Following the decision in the previous appeal, these two appeals were also allowed.

In conclusion, the Tribunal ruled in favor of the assessee, allowing all three appeals and holding that the assessee, as a Regional Rural Bank, should be treated as a co-operative society under the RRB Act, making it eligible for the deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961. The decision was based on the specific finding in a previous case and the interpretation of relevant legal provisions.