9911796707
TMI Blog2020 (6) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... as follow: The assessee is a co-operative society registered under the Kerala Co-operative Societies Act, 1969. For the assessment year 2014-2015, return was e-filed on 29.03.2016 declaring total income at Rs. 43,790 after claiming deduction u/s 80P of the I.T.Act at Rs. 35,42,882. The assessment order was passed for assessment year 2014-2015, wherein the Assessing Officer disallowed 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)(a)(i) of the I.T.Act was that the assessee was essentially doing the business of banking, and therefore, in view of insertion of section 80P(4) of the I.T.Act with effect from 01.04.2007, the assessee will not be entitled to dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan advanced in agriculture sector in addition to loan advanced under agriculture gold loan. 3. The learned CIT(A) went wrong in approving the denial of deduction u/s 80P in the assessment without appreciating the fact that the appellant is a co-operative society engaged in carrying on the business of providing credit facilities to its members and, as such, the income derived from this activity is eligible for deduction u/s 80P(1) read with sub section (2)(a)(i)." 5.1 The learned AR relied on the grounds raised. The learned Departmental Representative, on the other hand, strongly supported the orders passed by the Income Tax Authorities. 6. I have heard the rival submissions and perused the material on record. The Hon'ble jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -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 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under sub-section (4) of Section 80P of the IT Act. In view of the law laid down by the Apex Court in Citizen Cooperative Society [397 ITR 1] the law laid down by the Division Bench Perinthalmanna [363 ITR 268] has to be affirmed and we do so. 35. In view of the law laid down by the Apex Court in Ace Multi Axes Systems' case (supra), since each assessment year is a separate unit, the intention of the legislature is in no manner defeated by not allowing deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service Cooperative Bank Ltd. (supra) was ruling the roost and the certificate issued by the Registrar of Co-operative Society terming the assessee as a primary agricultural credit society would be sufficient for grant of deduction u/s 80P of the I.T.Act. In the light of the dictum laid down by the Full Bench of the Hon'ble Kerala High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra), I am of the view that there should be fresh examination by the Assessing Officer as regards the nature of each loan disbursement and purpose for which it has been disbursed, i.e., whether it for agricultural purpose or not. The A.O. shall list out the instances where loans have disbursed for non-agricultural purposes etc. and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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