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TMI Blog2020 (2) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... per the certificate of registration issued by the Registrar of Co-operative Societies, and accordingly, consider the allowabillity of deduction u/s 80P(2) of the I.T.Act. - Decided in favour of assessee for statistical purposes. - ITA No.58/Coch/2020 - - - Dated:- 12-2-2020 - Shri Chandra Poojari Accountant Member For the Appellant : Shri Sivadas Chettoor, CA For the Respondent : Sri.Mritunjaya Sharma, Sr.DR ORDER This appeal at the instance of the assessee is directed against the order of the CIT(A), Thrissur dated 13/11/2019 passed u/s. 154 r.w.s. 250 of the I.T. Act. The relevant assessment year is 2012-13. 2. The brief facts of the case are as follow: The assessee is a co-operative society registered under the Kerala Co-operative Societies Act, 1969. For the assessment year 2012-13, the return of income was filed after claiming deduction u/s 80P of the I.T.Act. The Assessing Officer passed an order u/s 143(3) of the I.T.Act, disallowing the claim of deduction u/s 80P of the I.T.Act. The reasoning of the Assessing Officer to disallow the claim of deduction u/s 80P(2) of the I.T.Act was that the assessee was doing the business of banking, and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reading of all the applicable provisions of law in this connection. A detailed note in support of this ground shall be filed on or before the hearing of this appeal. 5. The learned CIT(A) had passed the order based on the decisions of Chirakkal and Perinthalmanna case alone and failed to consider the other important grounds raised by the appellant. The CIT(A) is duty bound to decide all the issues/grounds raised in the appeal. Therefore the said order violates the natural justice principles besides being illegal. 6. In the facts and circumstances of the case, the appellant is clearly eligible for deduction of the whole profit attributable to the activities of giving credit facilities to its members under section 80P. The denial of the said deduction by the CIT(A) is illegal, unwarranted and unreasonable.. 7. The order suffers from serious legal infirmities in so far as the learned officer failed to deal with many important objections raised against the denial of deduction u/s 80P(4) of the Act. The predisposition and the lack of application of mind are plain and glaring. There is a clear violation of natural justice in this case. 8. The learned Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities are in compliance with the activities of a co-op society functioning under the Kerala Co-op Societies Act, 1969 and accordingly grant deduction u/s. 80P(2). (Ref: ITA No.637-641/coch/2019 AYs 2010-11 to 2014-15 dated 11-12-2019 in the case of Umayanalloor SCB Ltd., Kollam). The Ld. DR submitted that the Assessing Officers would be in a dilemma whether they have to follow the direction of the High Court or the direction of the Tribunal as whether the Department has to consider the PACS certificate issued by the co-op Dept also/alone. The Ld. DR prayed that the Tribunal may bring clarity in this regard. 7. I have heard the rival submissions and perused the material on record. The Ld. AR submitted that the issue in this appeal dealt by the CIT(A) in his order is debatable. As such, the judgment of the Larger Bench of the Jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra) does not cover his decision so as to rectify the earlier order of the CIT(A) u/s. 154 of the I.T. Act. In our opinion, this argument of the Ld. AR is misconceived and the subsequent judgment of the Jurisdictional High Court could be the reason to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y shall be verified by the Assessing Officer for each of the assessment years. The finding of the Larger Bench of the Hon ble High Court reads as follows:- 33. In view of the law laid down by the Apex Court in Citizen Co-operative Society [397 ITR 1] it cannot be contended that, while considering the claim made by an assessee society for deduction under Section 80P of the IT Act, after the introduction of sub-section (4) thereof, the Assessing Officer has to extend the benefits available, merely looking at the class of the society as per the certificate of registration issued under the Central or State Co-operative Societies Act and the Rules made thereunder. On such a claim for deduction under Section 80P of the IT Act, the Assessing Officer has to conduct an enquiry into the factual situation as to the activities of the assessee society and arrive at a conclusion whether benefits can be extended or not in the light of the provisions under sub-section (4) of Section 80P. 33. In Chirakkal [384 ITR 490] the Division Bench held that the appellant societies having been classified as Primary Agricultural Credit Societies by the competent authority under the KCS Act, it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) passed order u/s 154 of the I.T.Act, wherein the claim of deduction u/s 80P of the I.T.Act was denied, by relying on the judgment of the Larger Bench of the Hon ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra). The CIT(A) ought not to have rejected the claim of deduction u/s 80P(2) of the I.T.Act without examining the activities of the assessee society. The Full Bench of the Hon ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. V. CIT (supra) had held that the A.O. has to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction u/s 80P of the I.T.Act. In view of the dictum laid down by the Full Bench of the Hon ble jurisdictional High Court (supra), I restore the issue of deduction u/s 80P(2) to the files of the Assessing Officer. The Assessing Officer shall examine the activities of the assessee and determine whether the activities are in compliance with the activities of a co-operative society functioning under the Kerala Co-operative Societies Act, 1969, subject to jurisdiction granted to the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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