TMI Blog2020 (4) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... of the dictum laid we restore the issue of deduction u/s 80P(2) to the files of the AO to examine the activities of 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) - Appeal filed by the assessee allowed for statistical purposes. - ITA No.90/Coch/2020 - - - Dated:- 20-4-2020 - Shri George George K, Judicial Member For the Appellant : Sri.Santhosh P.Abraham, Advocate For the Respondent : Sri.Mritunjaya Sharma, Sr.DR ORDER This appeal at the instance of the assessee is directed against the order of the CIT(A), dated 03.09.2019 passed u/s. 154 r.w.s. 250 of the I.T.Act. The relevant assessment year is 2011-2012. 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 year under consideration, the return 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal allowed the appeal for statistical purposes on 20.05.2019. C. The appellate authority did not properly considered the issue raised before him regarding the disallowance of the exemption claimed u/s 80P, while passing the order u/s 154. D. The authorities below went wrong in disallowing the certificate issued by the statutory authority under the Kerala Co-operative Societies Act. E. The appellate authority ought to have considered the claim of the appellant u/s 80P and the reasoning given by them, misinterpreting the provisions of Sec. 80P(4) and its explanation is opposed to the facts and law. The restrictive provision under Banking Regulation Act is no way applicable to the facts of the case and the authorities below ought not to have rejected the claim of the appellant on unsustainable grounds. F. The authorities below should have state cogent reasons for discrediting the classification certificate issued by the statutory authority. The classification is issued by the statutory authority on the basis of the principal object provided in the bye-laws. If there is any violation regarding the same classification will be changed. The principle object of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsed, there would be a rectifiable mistake coming within the section 154 of the Income-tax Act. The Larger Bench of the Hon ble Kerala High Court has reversed the dictum laid down by the judgment of the Hon ble Kerala High Court in the case of Chirakkal Service Co-operative Bank Ltd. (supra) by holding that the activities of the assessee has to be examined to determine whether the assessee is Cooperative society or cooperative bank. In the light of the 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 Ker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area of operation confined to a Village, Panchayat or a Municipality and as such, they are entitled for the benefit of sub-section (4) of Section 80P of the IT Act to ease themselves out from the coverage of Section 80P and that, the authorities under the IT Act cannot probe into any issues or such matters relating to such societies and that, Primary Agricultural Credit 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 society and arrive at a conclusion whether benefits can be extended or not in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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