2019 (3) TMI 285 - AT - Income Tax

Deduction u/s. 80P(2)(a)(i) - assessee is primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969 - HELD THAT - Admittedly, the assessee is primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969. In the case of Chirakkal Service Co-op Bank Ltd. (2016 (4) TMI 826 - KERALA HIGH COURT) had held that a primary agricultural credit society, registered under the Kerala Cooperative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2). - Decided in favour of assessee

Summary

Issues:
1. Entitlement to deduction u/s. 80P(2)(a)(i) of the Income Tax Act.

Detailed Analysis:
The appeals before the Appellate Tribunal ITAT Cochin involved the issue of whether the assessee, a primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969, was entitled to deduction u/s. 80P(2)(a)(i) of the Income Tax Act for the assessment years 2013-2014, 2014-2015, and 2015-2016. The Assessing Officer had denied the deduction, citing that the assessee was primarily engaged in banking activities, thus not qualifying for the deduction as per section 80P(4) of the IT Act inserted from 01.04.2007.

The CIT(A), relying on the judgment of the Jurisdictional High Court in a specific case, held that the assessee was indeed entitled to the deduction u/s. 80P(2) of the IT Act. The CIT(A) distinguished the case of M/s. Citizen Co-operative Society Ltd. v. ACIT, Hyderabad, stating it was not applicable to primary agricultural credit societies, as per the order of the Cochin Bench of the Tribunal in another case.

The Revenue, aggrieved by the CIT(A)'s orders, filed appeals before the ITAT Cochin. The Departmental Representative and the learned AR presented their arguments, with the AR emphasizing that the issue was favorably covered by the High Court judgment in a specific case. After hearing the submissions and examining the records, the ITAT Cochin observed that the assessee, being a primary agricultural credit society under the Kerala Cooperative Societies Act, was entitled to the deduction u/s. 80P(2) based on the High Court's judgment.

The ITAT Cochin further clarified that the decision of the Apex Court, as relied upon by the Revenue, was not applicable to Co-operative Societies registered as primary agricultural credit societies in Kerala, citing a previous order of the ITAT Cochin Bench. Consequently, the appeals filed by the Revenue were dismissed, affirming the entitlement of the assessee-societies to the benefit of deduction u/s. 80P of the Income Tax Act.