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TMI Blog2020 (2) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue under section 154 r.w.s. 250 of the I.T. Act. Hence, no infirmity in the order of the CIT(A) on this issue in rejecting the claim of the assessee u/s. 80P(2)(d) of the I.T. Act. Reliance placed by the Ld. AR on the judgments of the Supreme Court in the case of National Thermal Power Corporation Ltd. vs. CIT [ 1996 (12) TMI 7 - SUPREME COURT] and Goetze (India) Ltd. vs. CIT [ 2006 (3) TMI 75 - SUPREME COURT] have no application to the facts of the present case since they were delivered on different set of facts. No merit in the claim of the assessee u/s. 80P(2)(d) of the I.T. Act made during the proceedings u/s. 154 of the I.T. Act before the CIT(A). Thus, this ground of appeals of the assesses is rejected. - ITA No.16/Coch/2020, ITA Nos.17&18/Coch/2020, ITA Nos.09 to 12/Coch/2020 - - - Dated:- 13-2-2020 - Shri Chandra Poojari, Accountant Member For the Appellant : Shri M. Ramdas, FCA For the Respondent : Sri.Mritunjaya Sharma, Sr.DR ORDER These appeals at the instance of the assessees are directed against the different orders of the CIT(A), Thrissur passed u/s. 154 r.w.s. 250 of the I.T. Act. The relevant assessment year is 2010-11, 2013-14, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Mavilayi Service Co-operative Bank Ltd vs. Commissioner of Income Tax. ITA No. 97 of 2016 and in 17 other cases on 19.03.2019, has proposed to rectify the appellate order passed by him dated 24.01.2019. b. The Commissioner of lncome Tax(Appeals) has concluded that the appellant is a Primary Agricultural Credit Society and that the appellant is entitled to deduction u/s 80P(2)(a)((i) as mentioned in his order dated 24.01.2019. c. The Commissioner of Income Tax (Appeals) has failed to appreciate that the Supreme Court has taken on record an SLP filed before it against the decision of Kerala High Court in the larger Bench dated 19.03.2019. d. The first Appellate Authority has also erred in law and in fact is not allowing the claim of the appellant in section 80P(2)(d) of the Act while disposing of the proceedings u/s 154 of the Act dated 14.11.2019. 3. While filing the return of income for the assessment year, the appellant has claimed deduction u/s 80P(2)(a)(i) of the Act only on the whole income, instead of putting up the claim u/s 80P(2)(d) of the Act on the interest on investment. During the financial year relevant to assessment year 2010-11 your appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stake coming within the section 154 of the Income-tax Act. The Larger Bench of the Hon ble Kerala High Court has reversed the dictum laid down by the judgment of the Hon ble Kerala High Court in the case of Chirakkal Service Co-operative Bank Ltd. (supra) by holding that the activities of the assessee has to be examined to determine whether the assessee is Co-operative society or Co-operative bank. In the light of the Larger Bench judgment of the Hon ble Kerala High Court, the earlier CIT(A) order s granting deduction u/s. 80P(2) of the I.T. Act have been rightly recalled by the CIT(A). Therefore the grounds raised by the assessees that the CIT(A) has erred in passing orders u/s. 154 of the I.T. Act are dismissed 7.1 The Hon ble jurisdictional High Court in the case of Chirakkal Service Co-operative Co-operative Bank Ltd. v. CIT [(2016) 384 ITR 490 (Ker.)] had held that when a certificate has been issued to an assessee by the Registrar of Co-operative Societies characterizing it as primary agricultural credit society, necessarily, the deduction u/s 80P(2) of the I.T.Act has to be granted to the assessee. However, the Full Bench of the Hon ble Kerala High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a Village, Panchayat or a Municipality and as such, they are entitled for the benefit of sub-section (4) of Section 80P of the IT Act to ease themselves out from the coverage of Section 80P and that, the authorities under the IT Act cannot probe into any issues or such matters relating to such societies and that, Primary Agricultural Credit Societies registered as such under the KCS Act and classified so, under the Act, including the appellants are entitled to such exemption. 34. In Chirakkal [384 ITR 490] the Division Bench expressed a divergent opinion, without noticing the law laid down in Antony Pattukulangara [2012 (3) KHC 726] and Perinthalmanna [363 ITR 268]. Moreover, the law laid down by the Division Bench in Chirakkal [384 ITR 490] is not good law, since, in view of the law laid down by the Apex Court in Citizen Co-operative Society [397 ITR 1], on a claim for deduction under Section 80P of the Income Tax Act, by reason of sub-section (4) thereof, 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk Limited in ITA No.525/Coch/2014 (order dated 20.07.2016), had held that interest income earned from investments with treasuries and banks is part of banking activity of the assessee, and therefore, the said interest income was eligible to be assessed as `income from business instead of `income from other sources . However, as regards the grant of deduction u/s 80P of the I.T.Act on such interest income, the Assessing Officer shall follow the law laid down by the Larger Bench of the Hon ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. V. CIT (supra) and examine the activities of the assessee-society before granting deduction u/s 80P of the I.T.Act on such interest income. The assessees for the relevant assessment years have also claimed that it is entitled for deduction u/s. 80P(2)(d) of the I.T. Act before the CIT(A), stating that interest income is received from investment made with other Co-operative societies. 7.4 The Ld. AR submitted that it is pertinent to consider the order of the co-ordinate Bench in the case of ITO vs. Ananthapuram Co-operative Society in ITA No. 111 112/Coch/2019 dated 02/05/2019 wherein it was held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h also rectification proceeding was held to be not maintainable for obtaining relief under Section 84 of the Act were dissented from by Gujarat High Court in Choksi Metal Refinery vs. CIT (1977) 107 ITR 63 (Guj) in which facts were identical. The Gujarat High Court mainly relied on circular of the [Board No. 14 (XL-35) of 1955 dt. 11th April, 1955 in which the Board had declared that the officers of the Department should not take advantage of ignorance of an assessee as to his rights and it was one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the officers should take the initiative in guiding a taxpayer where the proceedings or other particulars before them indicated that some refund or relief was due to the taxpayer and that although the responsibility for claiming refunds and reliefs rested with the assessees on whom it is imposed by law, the officers should draw their attention to any reliefs to which they appeared to be clearly entitled but which they omitted to claim for some reason or other [See also CIT vs. K.N. Oil Industries (1982) 30 CTR (MP) 137 : (1983) 142 ITR 13 (MP). 7. ..... 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