TMI Blog2020 (9) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... kal Service Cooperative Bank Ltd. [ 2016 (4) TMI 826 - KERALA HIGH COURT] was ruling the roost and the certificate issued by the Registrar of Co-operative Society terming the assessee as a primary agricultural credit society would be sufficient for grant of deduction u/s 80P of the I.T.Act. 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 [ 2019 (3) TMI 1580 - KERALA HIGH COURT] we are of the view that there should be fresh examination by the AO 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. A.O. shall list out the instances where loans have disbursed for non-agricultural purposes etc. 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). Appeals filed by the assessee are allowed for statistical purposes - ITA No. 237 to 240/Coch/2020, ITA No.247/Coch/2020 And SA No. 143 to 146 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals filed by the assessee were rejected by the CIT(A) for assessment years under consideration. 6. Aggrieved by the orders passed by the CIT(A), the assessee has preferred these appeals before the Tribunal. Identical grounds have been raised and they read as follow:- 1. The order of the Learned Commissioner of Income Tax(Appeals), Thrissur in so far as it is prejudicial to the interests of the appellant is opposed to 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 applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It is submitted with utmost respect to the Hon Court that the decision to the contrary in Mavilayil case is to be reconsidered as one rendered per incurium. 13. The appellant is eligible for deduction of ₹ 50,000/- u/s 80P(2)(c) of the Act in case all the above grounds are found rejected. For these amongst other grounds that may permitted to be raised and evidences adduced at the time of hearing it is prayed that the justice be done to the 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 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 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the KCS Act and having its 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 benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 etc. 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) of the I.T.Act. For the above said purpose, the issue raised in these appeals is restored to the files of the Assessing Officer. The Assessing Officer shall examine the activities of the assessee-society by following the dictum laid down by the Full Bench of the Hon ble jurisdictional High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra) and shall take a decision in accordance with law. It is ordered accordingly. 8. Since we have disposed of the appeals, the stay applications filed by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
