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TMI Blog2020 (4) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, the returns of income were filed after claiming deduction u/s 80P of the I.T.Act. The Assessing Officer passed order, 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(2) of the I.T.Act was that the assessee 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 assessee will not be entitled to the deduction u/s 80P(2) of the I.T.Act. 3. Aggrieved by the order of assessment denying the claim of deduction u/s 80P(2) of the I.T.Act, the assessee preferred appeal to the first appellate authority. The CIT(A) allowed the appeal by holding that the assessee was eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which had nothing to do with and which never formed even by implication, the basis of Hon'ble CIT (Appeals) earlier order could not have any effect on previous decision of the CIT (Appeals) and could not be viewed in retrospect to fish out any error in earlier order of the CIT(Appeals) which as it stood, was perfectly justified and in order. The Hon'ble CIT(Appeals) was not justified in passing rectification order for the A.Y.2014-15 u/s 154 r.w.s. 250. 4) Reason of subsequent exposition of law by Apex Court it cannot be said that earlier assessment was wrong or there was mistake apparent on the record, there is no justification to reopen the case u/s 154 r.w.s. 250. 5) The rectification u/s 154 r.w.s. 250 by the Hon'ble CIT (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Larger Bench judgment of the Hon'ble Kerala High Court, the earlier CIT(A) order's granting deduction u/s. 80P(2) of the I.T. Act have been rightly recalled by the CIT(A). Therefore, the grounds raised by the assessee that the CIT(A) has erred in passing order u/s. 154 of the I.T. Act are dismissed. 7.1 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.)] had held that when a certificate has been issued to an assessee by the Registrar of Cooperative Societies characterizing it as primary agricultural credit society, necessarily, the deduction u/s 80P(2) of the I.T.Act has to be granted to the assessee. However, the Full Bench of the Hon'ble Kerala H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 conclusion whether benefits can be extended or not in the light of the provisions under sub-section (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Ace Multi Axes Systems' case (supra), since each assessment year is a separate unit, the intention of the legislature 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." 7.2 The CIT(A) had initially allowed the appeal of the assessee and granted deduction u/s 80P(2) of the I.T.Act. Subsequently, the CIT(A) passed order u/s 154 of the I.T.Act, wherein the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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