TMI Blog2020 (10) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) - AO shall examine the activities of the assessees-society by following the dictum laid down in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT [ 2019 (3) TMI 1580 - KERALA HIGH COURT] and shall take a decision in accordance with law. Appeals filed by the assessees are allowed for statistical purposes - ITA No.214 to 225/2016/Coch/2020 And SA No. 120 to 131/Coch/2020 - - - Dated:- 6-10-2020 - Shri Chandra Poojari, AM And Shri George Mathan, JM For the Appellants : Sri.Jojo C.A., Advocate For the Respondent : Sri.Shanthom Bose, CIT-DR ORDER PER BENCH : These appeals at the instance of the assessees are directed against various orders of the CIT(A). The assessees have also preferred stay applications seeking to stay the recovery of outstanding tax arrears. 2. Common issue is raised in these appeals, hence, they were heard together and are being disposed of by this consolidated order. 3. The solitary issue that is raised is whether the CIT(A) is justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019) filed by the Co-operative Societies in Kerala, against the reference order dated 19-03- 2019 of the full bench of Hon'ble High Court of Kerala in the case Mavilayi Service Co-operative Bank Ltd., vs Income Tax Officer, Kannur and that the Apex court has issued notice on the prayer for stay of the order of High Court. B. The Commissioner (Appeals) Kottayam as well as the assessing Officer ought to have appreciated that even if the appellant is not a Primary Agricultural Credit Co-operative Society the appellant is not a Co-operative Bank and hence eligible for deduction u/s 80P of the Income Tax Act 1961 in the light of the clarification No.133/06/2006-07 dated 19-05-2007 issued by CBDT, New Delhi, which is binding on the Assessing Officer. C. The view of the Commissioner (Appeals) Kottayam as well as the assessing Officer that Primary Agricultural Credit Co-operative Societies only are eligible for deduction u/s Section 80(P) is diametrically opposite to the viewpoints expressed by various appellate authorities all over the country in the decisions mentioned below, to name a few. (a) High Court of Karnataka in Bangalore Commercial Transport Credit Society L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration while disposing this appeal petition. F. The Appellant prays that the disallowance of claim for deduction u/s 80(P) made in respect of income from banking and credit business with members may be deleted. 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, the Full Bench of the Hon ble Kerala High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra) had reversed the above findings of the Hon ble Kerala High Court in the case of Chirakkal Service Co-operative Co-operative Bank Ltd. v. CIT (supra) . The Larger Bench of the Hon ble K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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