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Facts
The assessee, a primary agricultural credit cooperative society, did not file its income return for Assessment Year 2009-10. An assessment was initiated under Section 148, during which the assessee claimed deduction under Section 80P. The Assessing Officer disallowed this deduction, which was confirmed by the CIT(A).
Held
The Tribunal held that the assessee, being a registered primary agricultural credit cooperative society without a banking license, is entitled to the deduction under Section 80P(2)(a)(i). It ruled that the provisions of Section 80P(4) do not apply to such a society and directed the Assessing Officer to allow the deduction.
Key Issues
Whether a primary agricultural credit cooperative society, not having a banking license, is entitled to deduction under Section 80P(2)(a)(i) and if the provisions of Section 80P(4) are applicable to it.
Sections Cited
139(1), 148, 80P, 80P(2)(a)(i), 80P(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
This appeal filed by the assessee is directed against the order of the ADDL/JCIT(A)-2, Gurugram [CIT(A)] dated 31.03.2025 for Assessment Year (AY) 2009-10.
Brief facts of the case are that assessee is a cooperative society registered under Kerala Co-operative Societies Act, 1969. It is classified as primary agricultural credit cooperative society. The assessee had not filed its return of income for the A.Y. 2009-10 under the provisions of section 139(1) of the Act. Therefore, the AO issued notice u/s. 148 of the Act on 24/03/2016. In response to Elankur Service Co-op. Bank Ltd. the notice issued, the assessee filed return of income on 27/04/2016 declaring nil income after claiming deduction u/s. 80P of Rs. 4,84,968/-. Against the said return of income, the assessment was completed by the ACIT, Circle-1, Tirur Income Tax Act, 1961 (for short, 'the Act') at a total income of Rs. 4,84,968/-. While doing so, the AO disallowed deduction claimed u/s. 80P of the Act.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.
It is submitted that the assessee is a cooperative society classified as primary agricultural credit cooperative society and it is a cooperative bank and, therefore, is entitled for deduction u/s. 80P of the Act.
On the other hand, ld. Sr.DR has no serious objection in allowing deduction u/s. 80P of the Act.
The issue that arises for my determination that whether assessee is entitled for deduction u/s. 80P(2)(a)(i). The assessee is a registered society under the Kerala Credit Cooperative Societies Act, 1969, classified as primary agricultural credit cooperative society and it is not enjoying licence of banking, therefore, the provisions of section 80P(4) have no application to the assessee Elankur Service Co-op. Bank Ltd. society. Once the assessee-society is granted registration as a cooperative society, the AO cannot go beyond the certification of registration granted by the Registrar of Cooperative Societies and, therefore, I direct the AO to allow 80P deduction to the assessee.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 31st July, 2025.