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2023 (8) TMI 34 - AT - Income TaxDeduction u/s 80P(2) - AO denied the deduction applying the provisions of section 80P(4) since the assessee is providing credit facilities to its members - HELD THAT - As hon‟ble Supreme Court in a recent decision in PCIT v/s Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd. 2023 (5) TMI 372 - SC ORDER held that a taxpayer who is merely giving credit to its members cannot be said to be the Co-operative Banks/Banks under the Banking Regulation Act and the banking activities under the Banking Regulation Act are altogether different. Therefore, the Hon‟ble Supreme Court held that the assessee, a co-operative credit society, could not be termed a Bank/Co-operative Bank and that being a credit society, it was entitled to exemption under section 80(P)(2) of the Act. We find that the issue arising in the present appeal is recurring in nature and has been decided in favour of the assessee in the preceding assessment years. The Revenue could not show us any reason to deviate from the aforesaid decision rendered in assessee s own case and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following the orders passed by the Co ordinate Bench of the Tribunal in assessee s own case 2023 (5) TMI 1238 - ITAT MUMBAI we are of the considered view that the assessee is entitled to claim deduction under section 80P(2) of the Act. Accordingly, the grounds no. 2-6 raised in assessee s appeal are allowed.
Issues Involved:
1. Disallowance of deduction claimed under section 80P(2) of the Income Tax Act, 1961. 2. Applicability of section 80P(4) to co-operative credit societies. 3. Levy of interest under sections 234B and 234C of the Act. Summary: Issue 1: Disallowance of deduction claimed under section 80P(2) of the Act The assessee, a co-operative credit society, filed appeals against the orders of the learned Commissioner of Income Tax (Appeals) [CIT(A)], which disallowed deductions claimed under section 80P(2) of the Income Tax Act. The main activity of the society is to provide credit facilities to its members, who are employees of a specific company. The assessee argued that it was not a co-operative bank but a credit co-operative society, and thus section 80P(4) did not apply. The Assessing Officer (AO) and CIT(A) disagreed, leading to the disallowance of the deductions. Issue 2: Applicability of section 80P(4) to co-operative credit societies The Tribunal noted that the issue had been previously decided in favor of the assessee in earlier years by the Co-ordinate Bench of the Tribunal and the Hon'ble Supreme Court. The Tribunal reiterated that the assessee, being a co-operative credit society providing credit only to its members, could not be considered a co-operative bank under the Banking Regulation Act. Therefore, section 80P(4) was not applicable, and the assessee was entitled to deductions under section 80P(2). Issue 3: Levy of interest under sections 234B and 234C of the Act The Tribunal found that the issue of interest under sections 234B and 234C was consequential to the main issue. Since the disallowance of deductions was overturned, the interest levied under these sections also needed to be recalculated accordingly. Conclusion: The Tribunal allowed the appeals for both assessment years 2013-14 and 2014-15, granting the deductions claimed under section 80P(2) and directing the AO to grant the deductions and adjust the interest calculations as per the Tribunal's findings. The Tribunal emphasized the binding nature of judicial precedents in the assessee's own case and the necessity for quasi-judicial authorities to consider such precedents.
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