KOROM SERVICE CO-OPERATIVE BANK LIMITED,PAYYANNUR vs. INCOME TAX OFFICER, WARD 4, KANNUR

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ITA 752/COCH/2025Status: DisposedITAT Cochin20 November 2025AY 2010-11Bench: SHRI INTURI RAMA RAO (Accountant Member)3 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the appellant is a primary agricultural society, not a co-operative bank, and therefore its claim for deduction is not hit by Section 80P(4). Citing the precedent of Mavilayi Service Co-operative Bank Ltd., the Tribunal directed the AO to allow the deduction under Section 80P.

What were the facts?

The appellant, a co-operative society, failed to file its income return for AY 2010-11, leading to a Section 148 notice. It subsequently filed a return claiming deduction under Section 80P, which the Assessing Officer denied, and this denial was confirmed by the CIT(A).

What were the issues?

Whether a co-operative society classified as a primary agricultural society, without a banking license, is eligible for deduction under Section 80P of the Income Tax Act, 1961, and if its claim is hit by Section 80P(4).

Which sections of the Income-tax Act were involved?

Section 139,Section 148,Section 143(3),Section 147,Section 80P,Section 80P(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI INTURI RAMA RAO, AM

For Appellant: Shri P.J. Jacob, CA
For Respondent: Smt. Leena Lal, Sr. D.R
Hearing: 06.11.2025Pronounced: 20.11.2025

Assessment Year: 2010-11 Korom Service Co-op. Bank Ltd. .......... Appellant Kanayi P.O., Payyannur, Kannur 670611 [PAN: AAAAK6741R] vs. The Income Tax Officer, Ward-4, Kannur .......... Respondent Assessee by: Shri P.J. Jacob, CA Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 06.11.2025 Date of Pronouncement: 20.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 20.08.2025 for Assessment Year (AY) 2010-11.

2.

Brief facts of the case are that the appellant is a co-operative society registered under the Kerala State Co-operative Societies Act, 1969. It is engaged in the business of accepting deposits from members and providing credit facilities to members. The appellant had not filed the return of income for AY 2010-11 under the provisions of section 139 of the Income Tax Act, 1961 (the Act). Therefore, the AO issued a notice u/s. 148 of the Act on 30.03.2015.

Korom Service Co-op. Bank Ltd. In response to the notice u/s. 148, the appellant filed the return of income on 19.05.2015 declaring Nil income after claiming deduction u/s. 80P of the Act of Rs. 4,878,360/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward 4, Kannur vide order dated 15.02.2016 passed u/s. 143(3) r.w.s. 147 of the Act at total income of Rs. 4,87,260/-. While doing so, the AO denied the claim of deduction u/s. 80P of Rs. 4,878,360/-.

3.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.

4.

Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.

5.

I heard the rival contentions and perused the material available on record. The issue that arises for my consideration is whether the appellant co-operative society is eligible to claim deduction u/s. 80P of the Act or not. The undisputed facts of the case are that the appellant is a co-operative society formed with the object of accepting deposits from members and providing credit facilities to the members. It is classified as a primary agricultural society. It does not enjoy any banking licence to carry on the business of banking from Reserve Bank of India. Therefore, in the given circumstances it cannot be classified as a co-operative bank and not hit by provisions of subsection (4) of section 80P of the Act. The ratio of the decision Korom Service Co-op. Bank Ltd. of the Hon'ble Apex Court in the case of Mavilayi Service Co- operative Bank Ltd. (supra) is clearly applicable to the facts of the case. In the circumstances, I direct the AO to allow the claim for deduction u/s. 80P of the Act.

6.

In the result, the appeal filed by the assessee stands allowed.

Order pronounced in the open court on 20th November, 2025.

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