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TMI Blog2019 (6) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... ey were heard together and are being disposed off by this consolidated order. 2. The solitary issue raised in these appeals is whether the assessee is entitled to deduction u/s 80P of the I.T.Act? 3. Brief facts of the case are as follows: The assessee in these cases is registered as co-operative societies under the Kerala State Co-operative Societies Act, 1969. The assessment was completed in assessee's case by denying deduction claimed u/s 80P of the I.T.Act. The Assessing Officer for denying the claim of deduction u/s 80P of the I.T.Act, treated the assessee as co-operative bank and not co-operative society. 4. Aggrieved by the orders of the assessment, the assessee filed appeals before the first appellate authority. The CIT(A) by fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to a Primary Agricultural Credit Society under the Banking Regulation Act and Income-tax Act, 1961 and thereby allowing deduction under section 80P(2) (a) (i) of the Income-tax Act,1961 without perceiving the difference in definition of a Primary Agricultural Credit Society in the two Acts. 5. The Ld.CIT(A) ought to have considered the decision of the jurisdictional Hon. High Court in the case of M/s.Perinthalmanna Service Co-operative Bank (363 ITR 268) wherein it has been held that with the introduction of section 80P(4) of the Act deduction u/s 80P(2) cannot be allowed merely on the strength of certificate of registration as "Primary Agricultural Credit Society." 6. The learned CIT (Appeals) ought to have seen that the Hon. Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged at the time of hearing, the order of the CIT (A) may be set aside and that of the Assessing Officer be restored. 10. The appellant craves leave to add or amend any ground of appeal before it is finally disposed off." 6. The learned Departmental Representative relied on the grounds raised in the appeals. Further, the learned DR placed reliance on the latest judgment of the Larger Bench of the Hon'ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. V. CIT [ITA No.97/2016 order dated 19th March, 2019]. The learned Counsel for the assessee, on the other hand, supported the orders of the CIT(A). 7. We have heard the rival submissions and perused the material on record. The Larger Bench of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtended or not in the light of the provisions under subsection (4) of Section 80P. 33. In Chirakkal [384 ITR 490] the Division Bench held that the appellant societies having been classified as Primary Agricultural Credit Societies by the competent authority under the KCS Act, it has necessarily to be held that the principal object of such societies is to undertake agricultural credit activities and to provide loans and advances for agricultural purposes, the rate of interest on such loans and advances to be at the rate to be fixed by the Registrar of Co-operative Societies under the KCS Act and having its area of operation confined to a Village, Panchayat or a Municipality and as such, they are entitled for the benefit of sub-section (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture is in no manner defeated by not allowing deduction under Section 80P of the IT Act, by reason of sub-section (4) thereof, if the assessee society ceases to be the specified class of societies for which the deduction is provided, even if it was eligible in the initial years." 7.1 In view of the dictum laid down by the Full Bench of the Hon'ble High Court, the issue of deduction u/s 80P(2)(a)(i) is restored to the Assessing Officer. The Assessing Officer shall examine the activities of the assessee and determine whether their activities are in compliance with the activities of a cooperative society functioning under the Kerala Co-operative Societies Act, 1969 and grant deduction u/s 80P(2) in accordance with law. It is ordered according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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