2018 (10) TMI 987 - AT - Income Tax

Eligibility for deduction u/s 80P - proof of charitable activities - registration under the Karnataka Society Act 1977 - Held that - Assessee has placed registration certificate dated 28/6/2000 in order to demonstrate that it was registered under the Karnataka Souhardha Sahakari Act 1959 Act as Cooperative Society but side by side AO has categorically observed in its order that assessee has registered under the Karnataka Souhardha Sahakari Act 1977 and in the asst. order assessee itself has admitted that it is covered under Karnataka Souhardha Sahakari Act 1977. The scope of registration under the Karnataka Souhardha Sahakari Act 1977 has been examined by Tribunal in the case of M/s Udaya Souharda Credit Co-operative Society Limited 2018 (8) TMI 1063 - ITAT BANGALORE in which it has been held that a Society has to be registered under the Karnataka Society Act 1977 as Cooperative society for claiming deduction under 80P of the Act. Matter was to be referred to the AO to examine whether the assessee was registered under the Karnataka Cooperative Souhardha Act or Karnataka Cooperative Society Act to make eligible for deduction under sec. 80P of the Act. In the instant case undisputedly there is a reference of registration No. on the 1st page of bye laws. Therefore it becomes necessary to verify that in what connection the registration No. is mentioned on the first page of bye laws. All these issues requires proper adjudication after making necessary verification. Under these circumstance, we are of the view that the matter should be examined by the AO afresh. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Eligibility for deduction under section 80P of the Income Tax Act.
2. Interpretation of registration under the Karnataka Souhardha Sahakari Act 1977.
3. Requirement for proper verification of registration details.
4. Need for re-examination by the Assessing Officer.

Analysis:

Issue 1: Eligibility for deduction under section 80P of the Income Tax Act
The appellant contested the order of the Commissioner of Income Tax (Appeals) regarding the denial of eligible deductions under section 80P of the Act. The appellant argued against the denial of deductions claimed under various provisions of section 80P, emphasizing that the denial was unjustified and contrary to the facts and circumstances of the case. The appellant also raised concerns regarding the violation of bye-laws and the Karnataka Societies Registrations Act, asserting that the denial of deductions was erroneous. Additionally, the appellant highlighted the lack of proper verification of facts by the authorities, leading to the denial of eligible claims under section 80P.

Issue 2: Interpretation of registration under the Karnataka Souhardha Sahakari Act 1977
The dispute arose regarding the registration status of the appellant under the Karnataka Souhardha Sahakari Act 1977. The appellant claimed to be registered as a cooperative society under the Karnataka Co-operative Society Act, while the Assessing Officer contended that the appellant was registered under the Karnataka Souhardha Sahakari Act 1977. The Tribunal noted discrepancies in the registration details provided by both parties and emphasized the need for proper verification to determine the correct registration status. The Tribunal referred to previous judgments and highlighted the importance of being registered under the appropriate act to claim deductions under section 80P of the Act.

Issue 3: Requirement for proper verification of registration details
The Tribunal observed conflicting claims regarding the registration status of the appellant and the act under which it was registered. The Tribunal emphasized the necessity for thorough verification of registration documents and details to ascertain the eligibility of the appellant for deductions under section 80P of the Act. The Tribunal noted discrepancies in the documentation provided by the appellant and directed the Assessing Officer to conduct a detailed examination to determine the accurate registration status of the appellant.

Issue 4: Need for re-examination by the Assessing Officer
After considering the arguments and documents presented by both parties, the Tribunal concluded that the matter required re-examination by the Assessing Officer. The Tribunal set aside the order of the Commissioner of Income Tax (Appeals) and directed the Assessing Officer to re-adjudicate the issue after affording the appellant an opportunity to be heard. The Tribunal emphasized the importance of proper verification and adherence to relevant judgments in determining the eligibility of the appellant for deductions under section 80P of the Act. Ultimately, the appeals of the appellant were allowed for statistical purposes, and the matter was remanded to the Assessing Officer for further examination.