2016 (2) TMI 601 - AT - Income Tax

Eligibility for deduction u/s. 80P(2)(a)(i) - Held that - Section 80P(4) is applicable only to cooperative banks and not to credit cooperative societies. The intention of the legislature of bringing in cooperative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a cooperative society and not a cooperative bank the provisions of section 80P(4) will not have application in the assessee s case and therefore it is entitled to deduction u/s 80P(2)(a)(i) of the Act. In coming to the aforesaid conclusion the Tribunal also followed the decision of the Hon ble jurisdictional High Court in CIT Vs. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot, (2015 (1) TMI 821 - KARNATAKA HIGH COURT ) and other decisions. Following the aforesaid decision of the Tribunal it is held that the assessee society is eligible to deduction u/s. 80(P)(2)(a)(i) of the Act - Decided in favour of assessee

Summary

Issues:
Delay in filing the appeal for condonation, eligibility of deduction u/s. 80P(2)(a)(i) of the Act.

Delay in Filing Appeal for Condonation:
The appeal by the assessee was directed against an order relating to the assessment year 2007-08, with a delay of about 578 days in filing the appeal. The delay was attributed to the assessee's bonafide belief that there was no scope for further appeal initially. However, upon receiving a second opinion, the appeal was filed. The Tribunal considered a similar case where delay of 980 days was condoned due to a similar bonafide belief. In this case, the delay of 578 days was also condoned as the Tribunal found it to be due to a reasonable cause.

Eligibility of Deduction u/s. 80P(2)(a)(i) of the Act:
The dispute centered around the eligibility of the assessee society for deduction u/s. 80P(2)(a)(i) of the Act. The CIT(A) had rejected the claim initially, stating that the issue was debatable and not subject to rectification u/s. 154. The assessee argued that the CIT(A) erred in not considering favorable judicial decisions and that the claim should have been allowed under rectification. The Tribunal referred to a similar case where rectification was allowed for a similar claim. The Tribunal held that the assessee society was indeed eligible for the deduction u/s. 80P(2)(a)(i) of the Act, based on the nature of its operations and relevant legal precedents. Consequently, the appeal of the assessee was allowed based on this finding.

In conclusion, the Tribunal condoned the delay in filing the appeal and allowed the appeal of the assessee based on the eligibility for deduction u/s. 80P(2)(a)(i) of the Act. The decision was pronounced in the open court on January 14, 2016.