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TMI Blog2020 (3) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... applications seeking to stay the recovery of outstanding tax arrears. 2. There is a delay of 06 days and 14 days, respectively, in filing these appeals. The assessees have filed petitions for condonation of delay. We have perused the reasons stated for filing the appeals belatedly. We find that there is sufficient cause for the delayed filing of these appeals and no latches can be attributed to the assessee. Hence, we condone the delay and proceed to dispose of the same on merits. 3. The brief facts of the case are as follow: The assessees are a co-operative societies 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, af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of The Mavilayi Service Co-operative Bank Ltd. v. CIT [ITA No.97/2016 order dated 19th March, 2019]. The assessee objected to the issuance of notices. However, the CIT(A) rejected the objections raised by the assessees and passed orders u/s 154 of the I.T.Act, disallowing the claim of the assessees u/s 80P(2) of the I.T.Act. 6. Aggrieved by the orders of the CIT(A), the assessees have filed these appeals before the Tribunal raising the following identical grounds:- 1. The order dated 3-9-2019 passed under section 154 r.w.s 250 of the Income Tax Act modifying the order dated 5- 3-2019 and thereby dismissing the appeal filed by the appellant confirming the order passed by the Income Tax Officer, Ward- 2 (4), Trivandrum is highly il ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in holding that the interest income of the appellant received from M/ s Trivandrum District Co-operative Bank Ltd and M/ s Kerala State Co-operative Bank Ltd totaling to the tune of Rs. 47,61,854/- is to be treated 'as income under the head 'Other Sources' which is to be taxed under section 56 of the Act. The CIT (Appeals) failed to consider the matter in the right perspective. 7. The CIT(Appeals) failed to note that interest earned from the deposit made in M/s.Trivandrum District Co-operative Bank Ltd and M/s.Kerala State Co-operative Bank Ltd are eligible for claiming deduction under section 80P(2) of the Act. For these and other grounds that may be urged at the time of hearing it is most respectfully prayed that this Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the eligibility of deduction 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit Societies registered as such under the KCS Act and classified so, under the Act, including the appellants are entitled to such exemption. 34. In Chirakkal [384 ITR 490] the Division Bench expressed a divergent opinion, without noticing the law laid down in Antony Pattukulangara [2012 (3) KHC 726] and Perinthalmanna [363 ITR 268]. Moreover, the law laid down by the Division Bench in Chirakkal [384 ITR 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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), we restore the issue of deduction u/s 80P(2) to the files of the Assessing Officer. The Assessing Officer shall examine the activities of the assessees 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. 8.2 As regards the interest on the investments with Co-operative Banks and other Banks, the co-ordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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