ITO-28(3)(1), MUMBAI, MUMBAI vs. M/S SHRI KULSWAMI CO-OP CREDIT SOCIETY LTD, MUMBAI

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ITA 984/MUM/2022Status: DisposedITAT Mumbai25 July 2022AY 2017-183 pages

In favour of the Revenue: the Revenue's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal directed the Assessing Officer to allow the deduction claimed by the assessee under Section 80P(2)(a)(i). The assessee was found to have fulfilled all the conditions of a Primary Co-operative Bank.

What were the facts?

The assessee, a co-operative society providing credit facilities to its members, claimed deduction under Section 80P. The Assessing Officer disallowed this deduction based on the amended Section 80P(4) of the Income Tax Act, 1961.

What were the issues?

Whether a co-operative society providing credit facilities to its members is eligible for deduction under Section 80P, despite the amended provisions of Section 80P(4) which disallow deduction to co-operative banks.

Which sections of the Income-tax Act were involved?

Section 80P,Section 80P(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

Before: SHRI PRAMOD KUMAR & SHRI PAVAN KUMAR GADALE

Hearing: 21.07.2022Pronounced: 25.07.2022

O R D E R PER PAVAN KUMAR GADALE JM: These are the two appeals filed by the revenue against the separate orders of the CIT(A) National Faceless Appeal Centre (NFAC), Delhi passed u/s 143(3) and 250 of the Act.

1.

Since the issues in these two appeals are common and identical, hence are clubbed, heard and consolidated order is passed. For the sake of convenience, we shall & 986/Mum/2022 M/s Shri Kulswami Co-Op credit Society Ltd., Mumbai. - 2 - take up the for the A.Y 2014- 15 as lead case and facts narrated. The revenue has raised the following grounds of appeal:

(1). Whether on the facts and in the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. to allow the deduction claimed by the assessee u/s 80P(2) (a)(i) of the Income Tax Act, 1961 without appreciating the facts that the assessee fulfilled all the conditions of a Primary Co-operative Bank"? (2). "Further, placed in the above factual and legal scenario, the impugned order of the Ld. CIT(A), NFAC is, the appellant prays, patently perverse and contrary to law and consequently merits to be set aside and that of the Assessing Officer be restored" (3). The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary.

2.

The brief facts of the case are that the assessee is a co-operative society and is engaged in providing credit facilities to its members. The assessee has filed the return of income electronically on 30.09.2014 for the A.Y 2014-15 disclosing a total income of Rs. 2,40,010/-. Subsequently the case was selected for scrutiny under the CASS and notice u/s 143(2) and 142(1) of the Act along with questionnaire are issued. In compliance to the notice, the Ld. AR of the assessee appeared from time to time and filed the details and & 986/Mum/2022 M/s Shri Kulswami Co-Op credit Society Ltd., Mumbai. - 3 - the case was discussed. Whereas,the assessee has disclosed the gross total income of RS. 2,67,25,499/- and claimed deduction u/s 80P of the Act of Rs. 2,64,85,491/- and disclosed the total income of Rs. 2,40,008/-. On perusal of Audited financial statements, the A.O observed that the claim of deduction u/s 80P of the Act should not be allowed as per the amended provisions of Sec. 80P(4) of the Act and issued show cause notice. In compliance to the notice, the assessee has filed the detailed reply on 17.11.2016 referred at Para 3.2 of the Assessment Order and the main contention of the assessee that the assessee cooperative society is not carrying on the banking operations and therefore not hit by the newly inserted provisions of Sec. 80P(4) of the Act and the assessee relied on the provisions of Cooperative Societies Act and Banking Regulation Act. Whereas the AO has dealt on the applicable provisions under Sec. 80P(4) of the Act and the various aspects of the banking regulations. Whereas the A.O. was not satisfied with the claim of the assessee and observed that the co-operative banks are categorized as urban commercial banks and does not fall under the purview

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