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TMI Blog2020 (2) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer to disallow the claim of deduction u/s 80P(2) of the I.T.Act was that the assessees was 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 the deduction u/s 80P(2) of the I.T.Act. 3. Aggrieved by the orders of assessment denying the claim of deduction u/s 80P(2) of the I.T.Act, the assessees preferred appeals to the first appellate authority. The CIT(A) allowed the appeals by holding that the assessees were eligible for deduction u/s 80P of the I.T.Act. In allowing the appeals of the assessees, the CIT(A) followed the judgment of the Hon'ble jurisdictional High Court in the case of Chirakkal Service Co-operative Co-operative Bank Ltd. v. CIT [(2016) 384 ITR 490 (Ker.). 4. Subsequently, the CIT(A) issued notices u/s 154 of the I.T.Act proposing to rectify his orders passed, in view of the subsequent 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 [ITA No.97/2016 order dated 19th March, 2019]. The assessees objected to the issuance of notices. However, the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s therefore to be cancelled, or b. To allow the deduction claimed u/s 80P(2)(d) of the Act which was rejected by the first Appellate Authority during the proceedings u/s 154 of the Act, and c. To pass such other consequential order as the Hon. Income Tax Appellate Tribunal may deem fit to render justice. 6. The learned AR filed detailed written submission challenging the order of the CIT(A) passed u/s. 154 of the I.T. Act. 6.1 The learned Departmental Representative strongly supported the orders of the Income-tax authorities. The Ld. DR also submitted that the Assessing Officers would be in a dilemma whether they have to follow the direction of the Larger Bench of the Kerala High Court in the case of Mavilayi Service Co-op Bank Ltd. vs. CIT supra or the direction of the Tribunal as whether the Department has to consider the PACS certificate issued by the co-op Dept also/alone. The Ld. DR prayed that the Tribunal may bring clarity in this regard. 7. I have heard the rival submissions and perused the material on record. The Ld. AR submitted that the issue in these appeals dealt by the CIT(A) in his orders is debatable. As such, the judgment of the Larger Bench of the Jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 80P of the I.T.Act. It was held by the Hon'ble High Court that the Assessing Officer is not bound by the registration 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (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." 7.2 The CIT(A) had initially allowed the appeals of the assessee and granted deduction u/s 80P of the I.T.Act. Subsequently, the CIT(A) passed orders u/s 154 of the I.T.Act, wherein the claim of deduction u/s 80P of the I.T.Act was denied, by relying on the 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 (supra). The CIT(A) ought not to have rejected the claim of deduction u/s 80P(2) of the I.T.Act without examining the activities of the assesseesociety. The Full Bench of the Hon'ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. V. CIT (supra) had held that the A.O. has to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction u/s 80P of the I.T.Act. In view of the dictum laid down by the Full Bench of the Hon'ble jurisdictional High Court (supra), I restore the issue of deduction u/s 80P to the files of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im before the CIT(A) that the assessees are entitled to deduction u/s. 80P(2)(d) of the I.T. Act of interest on investments. According to the Ld. DR, this claim of the assessees was first time made before the CIT(A) while adjudicating the issue by him u/s. 154 of the I.T. Act. The Ld. DR submitted that this relief was not claimed before the assessment proceedings by the assessees. As such, it cannot be granted by rectification since there was no material on record to support this claim. 7.6 I have heard the rival submissions and perused the record. It is pertinent to note that in Anchor Pressings (P) Ltd. vs. CIT (1975) 100 ITR 347 (All), the assessee had failed to claim a rebate which was allowable under section 84 of the Act to a newly established undertaking, in its return and also in assessment proceeding and in appeal against the assessment order. Subsequently, it claimed said rebate by making application under s. 154 of the Act and pleaded that there was mistake apparent from the record on account of the fact that the assessment order did not grant said relief. It was held by the High Court that the ITO was justified in refusing to grant the relief in rectification proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al and clear data should be contained in the record which should be sufficient to enable the Assessing Officer to consider whether relief should be granted and that in the absence of such material no fault could be found with the Assessing Officer for not making an order u/s. 84 favouring the assessee. In such a situation, powers u/s. 154 of the Act, though wider than those provided in O.XLVII, R.1, of CPC, could not be exercised because there were no materials on record to support the claim of relief. (See also Indian Aluminium Co. Ltd. vs. CIT (1983) 141 ITR 258 (Cal.) and paramount Trading corporation vs. ITO (1980) 124 ITR 55 (All.). 7.9 In the present case, the question is not making any claim by the assessee in his return of income or before the Assessing Officer during the assessment proceedings or before the CIT(A) in the proceedings u/s. 143(3) r.w.s 147 and 250 of the I.T. Act. When the CIT(A) proceeded to rectify his earlier order by placing reliance on the judgment of the Jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra), the assessee made this claim before the CIT(A) on which facts relating to the mistake is not appare ..... X X X X Extracts X X X X X X X X Extracts X X X X
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