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TMI Blog2019 (12) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... 019. The assessee has also preferred a stay applications seeking to stay the recovery of outstanding tax arrears. The relevant assessment years are 2010-2011 to 2014-2015. 2. The brief facts of the case are as follow: The assessee is a co-operative society registered under the Kerala Co-operative Societies Act, 1969. For the assessment years under consideration, the returns of income were filed declaring income of Rs.Nil, after claiming deduction u/s 80P of the I.T.Act. The Assessing Officer passed orders u/s 143(3) r.w.s. 147 of the I.T.Act, in all the assessment years, vide orders dated 28.12.2017 disallowing 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( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the I.T.Act, disallowing the claim of the assessee u/s 80P(2) of the I.T.Act. 5. Aggrieved by the orders of the CIT(A), the assessee has filed these appeals before the Tribunal raising the following identical grounds:- "A. The Assessment Order and the Modified Appellate Order are highly illegal, arbitrary and against all principles of law and natural justice. B. The Appellant Society is a Primary Agricultural Credit Society, with an object to provide financial accommodation to members, for agricultural purposes. C. Section 154(3) of the Income Tax Act says: Rectification of mistake. (3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of [the assessee or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the statues only, being a Primary Cooperative Society. I. Being a Primary Co-operative Society, the Appellant is entitled to get exemption, from paying tax for the entire amount of income of the Appellant, under Section 80P of the Income Tax Act, 1961. J. The impugned Orders will definitely shatter the very foundation of the Society, and thousands of members would be put to unending misery and deep financial loss. K. By issuance of the Modified Appellate Order, the First Appellate Authority has simply upheld the Assessment Order, without applying mind. Hence, this Hon'ble Tribunal may be pleased to set aside the impugned Orders." 6. The learned AR relied on the grounds raised. The learned Departmental Representative, on the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 490] is not good law, since, in view of the law laid down by the Apex Court in Citizen Co-operative Society [397 ITR 1], on a claim for deduction under Section 80P of the 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 Co-operative 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 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and determine whether the activities are in compliance with the activities of a co-operative society functioning under the Kerala Co-operative Societies Act, 1969 and accordingly grant deduction u/s 80P(2) of the I.T.Act. 7.2 As regards the interest on the investments with Cooperative Banks and other Banks, the co-ordinate Bench order of the Tribunal in the case of Kizhathadiyoor Service Co-operative Bank Limited in ITA No.525/Coch/2014 (order dated 20.07.2016), had held that interest income earned from investments with treasuries and banks is part of banking activity of the assessee, and therefore, the said interest income was eligible to be assessed as `income from business' instead of `income from other sources'. However, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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