SHREE VEERABHADRESHWAR CREDIT SOUHARDA SAHAKARI SANGH NIYAMIT,VIJAYAPUR vs. INCOME TAX OFFICER WARD 1 BIJAPUR, VIJAYAPUR
Income Tax Appellate Tribunal, “SMC” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHIAssessment year : 2017-18
This appeal is filed by Shree Veerabhadreshwara Credit Souharda Sahakari Sangh Niyamit (the assessee/appellant) for the assessment year 2017-18 against the appellate order passed by the CIT(Appeals)-2, Pune [ld. CIT(A)] dated 18.12.2024 wherein the appeal filed by the assessee against the assessment order dated 02.11.2019 passed by the ITO, Ward 1, Bijapur, was dismissed. Page 2 of 4
The ld. CIT(A) has dismissed the appeal of the assessee primarily for non-prosecution and further decided on the merits of the case that assessee is not entitled to deduction u/s. 80P of the Act of Rs.12,56,381. Thus, assessee is aggrieved. In substance, the only ground raised is that assessee is entitled to deduction u/s. 80P of the Act. 3. Briefly stated the facts show that assessee is a co-operative society doing the business of banking and providing credit facilities to its members, filed its return of income on 31.10.2017 declaring total income at NIL after claiming deduction u/s. 80P of the Act at Rs.13,06,381. The case of assessee was selected for limited scrutiny to examine the deduction and necessary notices were issued and served upon the assessee. Assessee was specifically asked that it is not eligible for deduction u/s. 80P(2)(a)(i) of the Act because of the reason that assessee is registered under the Karnataka Souharda Sahakari Act, 1997, hence net profit of Rs.13,06,381 declared by the assessee is not eligible for deduction u/s. 80P(2)(a)(i) of the Act. Accordingly assessment order was passed assessing total income of assessee at Rs.12,56,381 by assessment order dated 12.11.2019. 4. The assessee challenged the same before the ld. CIT(A) who dismissed the appeal of assessee, as assessee was given 5 opportunities for hearing but did not avail any of them. Therefore on the merits also, the ld. CIT(A) confirmed the action of the ld. AO. The ld. CIT(A) also stated that assessee is not interested in prosecuting the appeal. Page 3 of 4
After hearing both the sides, I find that the solitary issue in this appeal is that when assessee registered under the Karnataka Souharda
Sahakari Act, 1997 is not co-operative society and therefore it is not eligible for deduction u/s. 80P of the Act for the reason that the definition of Co-operative Society provided u/s. 2(19) of the I.T. Act does not cover it.
6. I find that this issue is covered in favour of the assessee by the decision of Hon’ble Karnataka High Court in the case of Government of India
Ministry of Finance v. Karnataka State Souharda Federal Co-operative
Ltd. 138 taxmann.com 170 wherein considering the provisions section 2(19) r.w.s. 80P of the Act, it was held that once the entities are once the entities are governed by the Co-operative Principles under the law in force and registered under the State enactment, which by implication or otherwise shall only have a same meaning of co-operative society, they are entitled to deduction u/s. 80P of the At. The Hon’ble High
Court further held that The Souharda Act and the Co-operative
Societies Act, 1959 are both in force in the State of Karnataka and are regulated by the State