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2015 (2) TMI 1311 - AT - Income TaxDisallowance of deduction u/s. 80P by invoking the provisions of sec. 80P(5) - assessee neither complied with this notice u/s. 142(1) nor filed return of income in terms of section 139 or in terms of notice u/s. 142(1) and hence, the AO proceeded to initiate best judgment assessment u/s. 144 of the Act as per the notice issued u/s. 142(1) - HELD THAT:- As decided in KADACHIRA SERVICE CO-OP. BANK LTD. VERSUS INCOME-TAX OFFICER, WARD-1, KANNUR THE MAVILAYI SERVICE CO-OP BANK LTD VS ITO [2013 (2) TMI 208 - ITAT COCHIN] Under section 80A(5), the legislature made it mandatory that the claim under Chapter VIA under the heading "C.- Deductions in respect of certain income" has to be made in the return. If the contention of the assessee is accepted, then the person, who files the return of income and fails to make a claim of deduction in the return of income either by ignorance or otherwise may not get the benefit, but a person who has not filed the return of income may be in a better position to claim the benefit. It is settled principles of law that in order to avail benefits under the beneficial provision, the conditions provided by the legislature has to be complied with. Therefore,the mandatory provisions contained in section 139(1) r.w.s. 80A(5) it is mandatory for every cooperative society for claiming deduction u/s 80P to file the return of income and to make a claim of deduction in the return itself - Decided against assessee. Exemption u/s 80P - HELD THAT:- It is not a dispute that the assessees are accepting deposits from general public, maintaining savings account, providing cheque facilities, etc. as a banking business. The question arises for our consideration whether the assessees providing banking services to the general public and their members are eligible for exemption u/s. 80P of the Act. This Tribunal has discussed this issue elaborately in Kunnamangalam Co-operative Bank Ltd. [2014 (10) TMI 350 - ITAT COCHIN] and Pinarayi Services Cooprative Bank Ltd. [2014 (7) TMI 1176 - ITAT COCHIN] and also followed by the CIT(A) wherein it was held that the assessee are not eligible for exemption u/s. 80P of the Act. Therefore, we do not find any infirmity in the order of the CIT(A). Accordingly, the same is confirmed. Disallowance u/s. 40(a)(ia) - contention of the assessee before the lower authorities was that section 40(a)(i) is applicable only for the amount remaining to be paid as at the accounting year end and it is not applicable to the amounts already paid - HELD THAT:- CIT(A) followed the order of this Tribunal in the case of Karivelloor Service Cooperative Bank Ltd. vs. ITO [2013 (3) TMI 673 - ITAT COCHIN] and Smt. Prasanna Radhakrishnan Dawson vs. ITO [2015 (10) TMI 802 - ITAT COCHIN] and found that the decision of the Special Bench of the Visakhapatnam Bench of this Tribunal in Merilyn Shipping & Transports [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] is not applicable in these cases. In fact, this Tribunal in the case of Orchid Marine Vs. ITO [2014 (9) TMI 1020 - ITAT COCHIN] by following the judgment of CIT vs. Sikandarkhan N Tunvar [2013 (5) TMI 457 - GUJARAT HIGH COURT] found that the provisions of section 40(a)(ia) are applicable not only in respect of the amount paid but also the amounts remain to be paid as on the last day of the financial year. The CIT(A) has followed the order of this Tribunal. Therefore, we do not find any infirmity in the order of the lower authorities. Accordingly, the same is confirmed. Disallowance u/s 36(1)(viia) - HELD THAT:- As AR submitted that even though the judgment of the Jurisdictional High Court in Lord Krishna Bank Ltd. vs. CIT [2010 (10) TMI 860 - KERALA HIGH COURT] is against the assessee, the assessee is eligible for exemption. The CIT(A) has followed the binding decision of the Jurisdictional High Court in Lord Krishna Bank (supra). We are of the opinion that the judgment of the Kerala High Court is binding on all authorities including this Tribunal. We find that similar issue came up for consideration in the case of Kannur Co-operative Bank Ltd. [2014 (6) TMI 930 - ITAT COCHIN] wherein the Tribunal decided the issue against the assessee.
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