TMI Blog2020 (9) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... c. 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 deduction u/s 80P(2) - the issue raised in these appeals is restored to the files of the Assessing Officer. - Directions to follow case THE MAVILAYI SERVICE CO-OPERATIVE BANK LTD. [ 2019 (3) TMI 1580 - KERALA HIGH COURT] - Appeals filed by the assessee are allowed for statistical purposes - IT Appeal No. 97 to 101 (Coch) of 2020, SA No. 53 to 57 (Coch) of 2020 - - - Dated:- 13-3-2020 - Chandra Poojari, Accountant Member And George George K, Judicial Member For the Appellant : Sivadas Chettoor, CA For the Respondent : Mritunjaya Sharma ORDER GEORGE GEORGE K, JUDICIAL MEMBER 1. These appeals at the instance of the assessee are directed against various orders of the CIT(A), all dated 10-12-2019. The assessee has also preferred stay applications seeking to stay the recovery of outstanding tax arrears. The relevant assessment years are 2010-2011 and 2012-2013 to 2015-2016. 2. Common issue is raised in these appeals, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, facts and circumstances of the case. 2. It is submitted that the appellant is clearly eligible for deduction u/s 80P(2)(a)(i) of the Income-tax Act 1961 and the observation or finding to the contrary by the lower authorities are illegal and unsustainable. It is further submitted that on a harmonious and combined reading of all the applicable provisions of law in this connection along with the scheme of the Act, the appellant is clearly eligible for the deduction. A detailed note in support of this ground shall be filed on or before the hearing of this appeal. 3. It is submitted that the denial of deduction u/s 80P( 4) of the Act by the lower authorities is illegal and unsustainable in law on a harmonious and combined reading of all the applicable provisions of law in this connection. A detailed note in support of this ground shall be filed on or before the hearing of this appeal. 4. The learned CIT(A) had passed the order based on the decisions of Chirakkal and Perinthalmanna case alone and failed to consider the other important grounds raised by the appellant. The CIT(A) is duty bound to decide all the issues/grounds raised in the appeal. Therefore the said order vio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant by quashing or modifying the impugned order of assessment. 6.1 The learned AR relied on the grounds raised. The learned Departmental Representative, on the other hand, strongly supported the orders passed by the Income-tax Authorities. 7. We have heard the rival submissions and perused the material on record. The Hon'ble jurisdictional High Court in the case of Chirakkal Service Co-operative Bank Ltd. v. CIT [2016] 68 taxmann.com 298/239 taxmann.com 417/384 ITR 490 (Ker.) had held that when a certificate has been issued to an assessee by the Registrar of Co-operative 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 High Court in the case of The Poonyar Service Co-operative Bank Ltd. (supra) had reversed the above findings of the Hon'ble Kerala High Court in the case of Chirakkal Service Co-operative Bank Ltd. (supra). The Larger Bench of the Hon'ble Kerala High Court in the case of The Poonyar Service Co-operative Bank Ltd. (supra) held that the Assessing Officer has to conduct an inquiry into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssified 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 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' case (supra), since each assessment year is a separate unit, the intention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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