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TMI Blog2020 (7) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... e recovery of outstanding tax arrears. 2. Since common issues are raised in these appeals, they were heard together and are being disposed of by this consolidated order. 3. The solitary issue that is raised in these appeals is whether the CIT(A) is justified in confirming the Assessing Officer's order in denying the claim of deduction u/s 80P(2)(a)(i) of the I.T.Act. 4. The brief facts of the case are as follow: The assessees are co-operative societies registered under the Kerala Co-operative Societies Act, 1969. For the assessment years under consideration, returns were filed after claiming deduction u/s 80P of the I.T.Act. The assessment orders were passed for the relevant assessment years, wherein the Assessing Officer disallowed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax (Appeals)-II Kochi confirming the order dated 19-12-2016 of the Assessing officer disallowing the deduction claimed under section 80 P of the Act for the AY 2011-12 by the appellant who is a Primary Agricultural Credit Society is illegal, arbitrary and unjustified. 2. The CIT (Appeals) ought not to have confirmed the disallowance of deduction under section 80 P of the Act made by the assessing officer. 3. The ,CIT (Appeals) ought to have remanded the matter back to the assessing officer for fresh consideration in view of "the judgment dated 19-3-2019 of the Full Bench of the Honourable High Court in the case of Mavilayi Service Cooperative Bank Ltd V s CIT. 4. The CIT (Appeals) failed to consider that the Full Bench of the Keral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant is a co-operative Bank. The lower authorities failed to note that banking business is different from providing credit facility to members and the appellant is not doing banking business. The CIT (Appeals) failed to consider the matter in the right perspective. For these and other grounds that may be urged at the time of hearing it is most respectfully prayed that this Honourable Tribunal may be pleased to set aside the order dated 10-12-2019 passed by the CIT (Appeals)- II, Kochi and the order dated 19-12-2016 passed by the ITO, on- Corporate Ward-1, Thodupuzha for the AY 2011-12 and to allow the appeal." 6.1 The learned AR relied on the grounds raised. The learned Departmental Representative, on the other hand, strongly supporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears. 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 ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 Cooperative 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 Ace Multi Axes Systems' c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been conducted by the A.O's. In the light of the dictum laid down by the Full Bench of the Hon'ble Kerala High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra), we are of the view that there should be fresh examination by the Assessing Officer as regards the nature of each loan disbursement and purpose for which it has been disbursed, i.e., whether it for agricultural purpose or not. The A.O. shall list out the instances where loans have disbursed for non-agricultural purposes and accordingly conclude that the assessee's activities are not in compliance with the activities of primary agricultural credit society functioning under the Kerala Co-operative Societies Act, 1969, before denying the claim of deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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