SRI GURUDEVA VIVIDHODESHA CO-OPERATIVE SOCIETY LIMITED,BELTHANGADY vs. INCOME TAX OFFICER, WARD-1, PUTTUR

ITA 361/BANG/2025Status: DisposedITAT Bangalore02 July 2025AY 2017-18Bench: SHRI WASEEM AHMED (Accountant Member), SHRI KESHAV DUBEY (Judicial Member)6 pages
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What did the Tribunal hold?

The Tribunal noted that the eligibility for deduction under section 80P(2)(a)(i) depends on various facts, including the type of members, their rights, and whether the society operates on mutuality principles. Citing previous Tribunal orders and Supreme Court judgments, the Tribunal restored the issue to the Assessing Officer for fresh examination.

What were the facts?

The assessee, a co-operative society, claimed deduction under section 80P(2)(a)(i) of the Income Tax Act. The Assessing Officer disallowed the deduction citing that a large number of members were nominal or associate members who did not have voting rights or participate in management, violating the principle of mutuality and the Karnataka Co-operative Societies Act's limits on associated members. This was upheld by the CIT(A).

What were the issues?

Whether the co-operative society is eligible for deduction under section 80P(2)(a)(i) when a significant portion of its members are nominal or associate members, potentially violating the principle of mutuality.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 57

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Income Tax Appellate Tribunal, ‘B’ BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY

For Appellant: Shri Sandeep Chalapathy, CA
For Respondent: Shri Subramanian S, JCIT
Hearing: 19.06.2025Pronounced: 02.07.2025

PER WASEEM AHMED, ACCOUNTANT MEMBER:

This is an appeal filed by the assessee against the order passed by the NFAC, Delhi dated 26/12/2024 in DIN No. ITBA/NFAC/S/ 250/2024-25/1071568785(1) for the assessment year 2017-18. 2. The issue raised by the assessee is that the learned CIT(A) was wrong in denying deduction under section 80P(2)(a)(i) of the Income Tax Act. The deduction was denied because of the presence of associate and nominal members who do not have voting rights and do not take part in the management of the society.

3.

Briefly stated facts are that the assessee is a co-operative society registered under the Karnataka Co-op

The order continues below.

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