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2019 (12) TMI 1 - ITAT BANGALOREDeduction u/s. 80P - HELD THAT:- The Citizen Co-operative Society Ltd. Vs. ACIT [2017 (8) TMI 536 - SUPREME COURT] is not applicable in Assessment Year 2016-17 in the present case. In reply, the ld. AR of assessee made various submissions such as no power to remove any existing associated member and no/negligible transaction with good no. of associated members but find no merit in these contentions because I find that till Assessment Year 2015-16, the number of associated members was well within the limit prescribed as per the provisions of section 18 of the Karnataka Cooperative Societies Act, 1959 amended w.e.f. 06.09.2014 and thereafter, the assessee has admitted 233 new associated members in violation of the provisions of the Karnataka Cooperative Societies Act, 1959 and hence, it is seen that in the present case in Assessment Year 2016-17, the assessee society has intentionally violated the provisions of the Karnataka Cooperative Societies Act, 1959 and hence, this judgment of the Hon’ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT (supra) is squarely applicable in this year and respectfully following the same, I hold that the present assessee is not eligible for deduction u/s. 80P in Assessment Year 2016-17. In the result, the appeal filed by the assessee for Assessment Year 2016-17 is dismissed. Number of associated members is well within the prescribed percentage of 15% of regular members and hence, on this aspect, there is no violation of the provisions of the Karnataka Cooperative Societies Act, 1959 in Assessment Year 2015-16. In Assessment Year 2015-16 also, the AO and ld. CIT(A) has followed the same judgment of the Hon’ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT (supra) without any specific finding as to which provisions of the Karnataka Cooperative Societies Act, 1959 is being violated by assessee society in Assessment Year 2015-16. Hence, I feel it proper to restore the matter back to the file of ld. CIT(A) for fresh decision in Assessment Year 2015-16. Hence set aside the order of ld. CIT(A) in Assessment Year 2015-16 and restore the matter back to his file for fresh decision.
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