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Facts
The assessee, a cooperative society, filed its return of income claiming deduction under section 80P. The Assessing Officer denied this deduction. The CIT(A) also dismissed the appeal, relying on sub-section (4) of section 80P.
Held
The Tribunal held that since the appellant is a cooperative society registered under the Kerala Cooperative Societies Act, 1969, and does not hold a banking license, sub-section (4) of section 80P is not applicable. The Supreme Court's ruling in Mavilayi Service Co-Operative Bank Ltd. v. CIT is applicable.
Key Issues
Whether the cooperative society is eligible for deduction under section 80P of the Income Tax Act, 1961.
Sections Cited
80P, 250, 143(3), 143(3A), 143(3B)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH :: COCHIN
Before: SHRI INTURI RAMA RAO, AM& SHRI RAHUL CHAUDHARY
Assessment Year: 2018-19 The Mundur Service Co-op. Bank Ltd., .......... Appellant Mundur, Palakkad, Kerala-678592 [PAN: AABAT 2987 M] vs. Income Tax Officer .......... Respondent Ward-2, Plakkad. Appellant by: None Respondent by: Smt. Leena Lal, Sr. DR Date of Hearing: 22.08.2025 Date of Pronouncement: 28.08.2025 O R D E R
Per Inturi Rama Rao, AM:
This is an appeal filed by the Assessee-Cooperative Societydirected against the order passed by the learned Commissioner of Income Tax (Appeals)/ NFAC, Delhi [for short, ‘Ld. CIT(A)] dated 16.06.2025 u/s.250 of the Income Tax Act, 1961 (for short, 'the Act') for Assessment Year (AY) 2018-19.
Brief facts of the case are that appellant is a cooperative society registered under the Kerala Co-operative Societies Act, 1969. It is classified as primary agricultural credit cooperative society. It is engaged in the business of accepting deposits from The Mundur Service Co-op. Bank Ltd. member and providing credit facilities to its member. The return of income for the A.Y. 2018-19 was filed on 11/10/2018 disclosing income of Rs. 1,650/- after claiming deduction under section 80P of the Act. Against the said return of income, the assessment was completed by the Assessing Officer (for short, ‘AO’) vide order dated 26/02/2021 passed under section 143(3)r.w.s. 143(3A) & 143(3B) of the Act at a total income of Rs. 2,33,78,613/-. While doing so, the AO denied the deduction claimed under section 80P of the Act following the Full Court judgment of the Hon'ble Kerala High Court in the case of The Chirakkal Service Cooperative Bank Ltd. & Others in dt.15/02/2016.
Being aggrieved by the above assessment order, an appeal was filed by the appellant before the Ld. CIT(A), who vide impugned order dismissed the appeal placing reliance on the provisions of sub- section (4) of section 80P of the Act.
Being aggrieved by the order of CIT(A), the appellant is in appeal before this Tribunal. When appeal was called on for hearing, none appeared on behalf of the appellant despite due service of notice of hearing. After hearing ld.Sr.DR, we proceed to dispose of the appeal on merits based on material on record.
We heard the ld.Sr.DR and perused the material on record. The solitary issue that arises for our consideration is that whether the appellant society is eligible for deduction under section 80P of the Act or not. Admittedly, the appellant is a cooperative society, duly The Mundur Service Co-op. Bank Ltd. registered under the Kerala Cooperative Society Act, 1969. It is classified as Primary Agricultural Credit Cooperative Society and it does not enjoy any banking licence. Therefore, the provisions of sub-section (4) of section 80P have no application to the appellant society. The ratio laid down by the Hon'ble Supreme Court in the case of Mavilayi Service Co-Operative Bank Ltd. v. CIT[(2021) 431 ITR 01] is squarely applicable to the facts of the present case. The ratio of the decisions relied upon by the lower authorities, had been overruled by the Hon’ble Supreme Court in the case of Mavilayi Service Co-Operative Bank Ltd (supra).Therefore, we direct the AO to allow deduction claimed by the Assessee under section 80P of the Act. Thus, the grounds raised by the appellant stand allowed.
In the result, appeal filed by the assessee stands allowed. Order pronounced in open Court on 28th August, 2025.