AA533 UMAREDDIYUR PRIMARY AGRICULTURAL COOPERATIVE CREDIT SOCIETY LIMITED,ERODE vs. INCOME TAX OFFICER, WARD 2(1) ERODE, ERODE
आयकर अपीलȣय अͬधकरण,‘सी’ Ûयायपीठ, चेÛनई
IN THE INCOME TAX APPELLATE TRIBUNAL
‘C’ BENCH, CHENNAI
Įी जॉज[ जॉज[ के, उपाÚय¢ एवं Įी जगदȣश, लेखा सदèय के सम¢
BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT
AND SHRI JAGADISH, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.: 2784/CHNY/2024
िनधाᭅरण वषᭅ/Assessment Year: 2016-17
AA533 Umareddiyur Primary
Agricultural Cooperative Credit
Society Ltd.,
Umareddiyur Post,
Anthiyur Taluk,
Erode – 638 311. PAN: AACAA 2358N
Vs.
The Income Tax Officer,
Ward 2(1),
Erode
(अपीलाथᱮ/Appellant)
(ᮧ᭜यथᱮ/Respondent)
अपीलाथᱮ कᳱ ओर से/Appellant by : Ms. A. Vijayalakshmi, CA
(Through Virtual Mode)
ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Ms. Anitha, Addl.CIT
सुनवाई कᳱ तारीख/Date of Hearing : 07.05.2025
घोषणा कᳱ तारीख/Date of Pronouncement : 19.05.2025
आदेश /O R D E R
PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal at the instance of the assessee is directed against the Commissioner of Income Tax (Appeals) / Addl/JCIT(A)-3, Kolkata order dated 30.07.2024 passed u/s.250 of the Income Tax Act, 1961
(hereinafter called ‘the Act’). The relevant Assessment Year is 2016-17. 2. There is a delay of 32 days in filing this appeal. The assessee has filed a petition for condonation of delay. On perusal of the reasons stated in the condonation application, we are satisfied that there is sufficient cause for delay in filing this appeal and no latches can be attributed to the assessee. Hence, we condone the delay of 32
days in filing the appeal and proceed to dispose off the appeal on merits.
The grounds raised reads as follows:- Ground No.1 The Assessing officer and CIT(A) is contrary to law, facts and circumstances of the case to the extent prejudicial to the interest of the appellant and at any rate is opposed to the principles of equity, natural justice and fair play.
Ground No.2 The Assessing officer and CIT(A) failed to appreciate that when none of the activities of the Appellant are in violation of the Tamilnadu Co- operatives Societies Act 1983 or its Bye-Laws, the benefit under sec. 80P cannot be denied to the Appellant. Sec. 80-P was introduced to encourage the Co- operative movement among the Members.
Ground No.3 The Assessing officer and CIT(A) failed to accept decision of the Honourable High court of Madras in the case PCIT Vs M/s.S-1308 Ammapet
Primary Agricultural Cooperative Bank Ltd Tax Case Appeal Nos.882 and 891
of 2018 has been elaborately discussed about the admission of two class
Members. Hence the Appellant by admission of two classes of Members are eligible for deduction u/s 80P(2)(a)(i) .
Ground No.4 The Assessing officer and CIT(A) followed the principles decided in the Honourable Supreme court case M/s. Citizen Co-operative Society Ltd vs.
ACIT, Which is a multi-state cooperative society. The appellant is Primary
Agricultural cooperative credit society and it’s totally different from object of the appellant. Honourable Apex court in the case The Mavilayi Service
Cooperative Bank Ltd. & Ors confirmed the eligibility of deduction u/s 80P for Primary Agricultural Co-operative Society
Ground No.5: Prayer i. Your appellant pray on considering the above submission, delete the Addition made by Assessing Officer and allow the deduction under Sec. 80P(2)(a)(i) of the Income Tax Act, 1961. ii. Your appellant craves leave to add, amend, alter, vary and/or withdraw any or all the above grounds of appeal at any time before or at the time of hearing.
Brief facts of the case are as follows:- The assessee is a primary agricultural society registered under TamilNadu Co- operative Societies Act, 1983 (hereinafter ‘TNCS Act’). For the assessment year 2016-17, the return of income was filed on 25.03.2018 declaring ‘nil’ income after claiming deduction u/s.80P(2)(a)(i), 80P(2)(d) and 80P(2)(c) of the Act. The assessment was selected for scrutiny under CASS and notice u/s.143(2) of the Act was issued on 10.08.2018. The assessment was completed u/s.143(3) of the Act vide order dated 22.12.2018. In the said assessment order, the claim of deduction u/s.80P(2)(d) and 80P(2)(c) of the Act was allowed. However, the claim of deduction u/s.80P(2)(a)(i) amounting to Rs.6,28,728/- was denied for the reason that assessee was having both members as well as non-members. Thereby violated the principles of mutuality, hence not entitled to deduction u/s.80P(2)(a)(i) of the Act. In this context, the AO relied on the judgment of the Hon’ble Apex Court in the case of Citizen Co-operative Society Ltd., vs. ACIT reported in 397 ITR 1 (SC).
Aggrieved by the assessment order, the assessee filed appeal before the First Appellate Authority. The CIT(A) confirmed the order of the AO. The relevant finding of the CIT(A) reads as follows:- The assessee was given fresh opportunity of being heard vide letter dated 21.06.2024 and 25.07.2024. The submission of the assessee has been considered and the appeal is decided as below:
Ground no. 01 to 03: All the grounds 01 to 03 are related to the same issue all are taken together for adjudication.
The fact of the case is assessee is a credit co-operative society, the assessee filed return of income for the A.Y.2016-17 on 25.03.2018 admitting NIL income after claiming deduction U/s. 80P(2)(a)(i) & (ii), 80P(2)(d) and 80P(2)(C) of the income Tax Act, 1961. The assessee claimed deduction under section 80P(2)(a)(i) at Rs. 6,28,728/.
As per assessee, this deduction was claimed u/s. 80P(2)(a)(i) being income from providing credit facilities to its members.
The A.O. held that the assessee's Authorized Representative stated that in the case of M/s. Citizen Co-operative Society Ltd vs. ACIT, that assessee was a multi-state operator having its operations spread over many states and registered by the Central