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2020 (2) TMI 1095 - HC - Income TaxDeduction u/s 80P - whether the petitioner-Society registered under the 1997 Act is to be treated on par with Co-operative Society registered under the 1959 Act and whether the petitioner would be entitled for the benefit of Section 80P? - HELD THAT - As in terms of the order in M/S. SWABHIMANI SOUHARDA CREDIT CO. OPERATIVE LTD 2020 (1) TMI 831 - KARNATAKA HIGH COURT and connected writ petition, the present writ petition is disposed of. Annexure-A, assessment order is quashed. The respondents to pass fresh assessment order treating the petitioner as Co-operative Society, extending the benefit under Section 80P of the 1961 Act with all other exceptions
Issues:
1. Interpretation of the term "Co-operative" in Section 2(19) of the Income Tax Act, 1961. 2. Applicability of Section 80P of the 1961 Act to entities registered under the Karnataka Souharda Sahakari Act, 1997. 3. Comparison between entities registered under the 1997 Act and the Karnataka Cooperative Societies Act, 1959 for the purpose of Section 80P benefits. Issue 1: Interpretation of the term "Co-operative" in Section 2(19) of the Income Tax Act, 1961 The petitioner, a society registered under the Karnataka Souharda Sahakari Act, 1997, sought a declaration that the term "Co-operative" in Section 2(19) of the 1961 Act includes entities defined under the 1997 Act. The Principal Bench had previously held that entities under the 1997 Act do fit the definition of "co-operative society" under the 1961 Act for the purpose of Section 80P benefits. The present judgment reaffirms this interpretation, granting the petitioner the status of a Co-operative Society under the 1961 Act. Issue 2: Applicability of Section 80P of the 1961 Act to entities registered under the Karnataka Souharda Sahakari Act, 1997 The primary contention was whether the petitioner, registered under the 1997 Act, could avail the benefits of Section 80P of the 1961 Act similar to Co-operative Societies registered under the 1959 Act. The Court, in line with the earlier ruling, directed that the petitioner be treated as a Co-operative Society under the 1961 Act. Consequently, the assessment order dated 11.12.2019 was quashed, and the respondents were instructed to issue a fresh assessment order recognizing the petitioner as a Co-operative Society and extending the benefits under Section 80P of the 1961 Act. Issue 3: Comparison between entities registered under the 1997 Act and the Karnataka Cooperative Societies Act, 1959 for Section 80P benefits The judgment draws a parallel between entities registered under the 1997 Act and those under the 1959 Act concerning eligibility for Section 80P benefits. By aligning the petitioner's status with that of Co-operative Societies under the 1959 Act, the Court ensured that the petitioner could claim the benefits under Section 80P of the 1961 Act. The decision in this case is consistent with the ruling in the earlier writ petitions, providing clarity on the eligibility criteria for availing Section 80P benefits under the Income Tax Act. In conclusion, the Karnataka High Court's judgment clarifies the interpretation of the term "Co-operative" in the Income Tax Act, 1961, and establishes the eligibility of entities registered under the Karnataka Souharda Sahakari Act, 1997, for the benefits under Section 80P of the Act. The decision aligns the petitioner's status with Co-operative Societies registered under the Karnataka Cooperative Societies Act, 1959, ensuring equal treatment and access to tax benefits.
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