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TMI Blog2020 (10) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... years under consideration, returns were filed after claiming deduction u/s 80P of the I.T.Act. The assessment orders were passed for assessment years under consideration, 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 assessees were 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 assessees will not be entitled to deduction u/s 80P of the I.T.Act. 5. Aggrieved by the orders passed by the Assessing Officer disallowing the claim of deduction u/s 80P(2) of the I.T.Act, the assessees preferred appeals before the first appellate authority for all the assessment years under consideration. The CIT(A) placing reliance on the judgment of the Full Bench of the Hon'ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT [(2019) 414 ITR 67 (Ker.) (FB) (HC)] held that the Assessing Officer had made elaborate findings and has come to a factual finding that agricultural credit provided by the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on 5th Feb 2014 (d) High Court of Bombay at Goa - Quepem Urban Co-operative Credit Society Ltd. vs Assistant Commissioner of Income-tax on 17-04-2015 (e) Madras High Court - The Commissioner of Income Tax vs NIc Employees Co-Operative Society on 10 August, 2016 (f) ITAT, Panaji - Athani Taluka primary teachers Cooperative credit society Ltd. ITA NO. 06/PNJ/2014 on 04-07-2014 (g) ITAT, Poona - Jankalyan Nagri Sahakari Pat Sanstha Ltd. reported in 24 Taxmann.com (Pune Tribunal) 127 (h) ITAT, Ahamadabad - Jafari Momin Vikas Co-Op. Credit society on 31 October, 2012 (i) ITAT, Indore - Bhee Thrift & Credit Co- operative society on 6 August, 2012 (j) ITAT, Bangalore - Yeshwantpur Credit cooperative Society on 11 April, 2012 (k) ITAT, Ahmedabad-Sarvoday Credit cum Consumers Co-operative Society on 3 May, 2013 (l) ITAT, Pune - Jain Nagri Sahkari Pat Sanstha Department Of Income Tax on 14 September, 2012 (m) ITAT, Pune - Dharasur Mardini Nagar Sahakari on 20 November, 2012 (n) ITAT, Pune - Vardhman Nagari Sahakari Path Sansta on 22 November, 2012 (o) ITAT, Delhi- Palhawas Primary Agriculture Co-op. Society Ltd. Palhawas Distt., I.T.A.No.2368/Del/2011 (p) ITAT, De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration certificate issued by the Registrar of Kerala Co-operative Society classifying the assessee-society as a co-operative society. The Hon'ble High Court held that each assessment year is separate and eligibility 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 Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided, even if it was eligible in the initial years." 7.1 In the instant cases, the Assessing Officer had denied the claim of deduction u/s 80P of the I.T.Act for the reason that assessees were essentially doing the business of banking and disbursement of agricultural loans by the assessees were only minuscule. Therefore, the Assessing Officer concluded that the assessees cannot be treated as co-operative society. The Assessing Officer after perusing the narration of the loan extracts in the statutory audit report for assessment years under consideration, came to the conclusion that out of the total loan disbursement, only a minuscule portion has been advanced for agricultural purposes. We are of the view that the narration in loan extracts in the audit reports by itself may not conclusive to prove whether loan is a agricultural loan or a non-agricultural loan. The gold loans may or may not be disbursed for the purpose of agricultural purposes. Necessarily, the A.O. had to examine the details of each loan disbursement and determine the purpose for which the loans were disbursed, i.e., whether it is for agricultural purpose or non-agricultural purpose. In these cases, such a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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