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Facts
The assessee, a co-operative society providing financial accommodation for agricultural purposes, claimed a deduction of Rs.16,48,770 under Section 80P, resulting in a 'Nil' income return for AY 2017-18. The Assessing Officer denied this deduction by invoking Section 80P(4) and assessed the total income at Rs.16,48,770, an action subsequently confirmed by the CIT(A).
Held
The Income Tax Appellate Tribunal noted that the issue regarding the eligibility for Section 80P deduction by co-operative societies is settled by the Supreme Court's judgment in *Mavilayi Service Co-operative Bank Ltd. v. CIT*. Respectfully following this precedent, the Tribunal directed the Assessing Officer to allow the assessee's claim for deduction under Section 80P.
Key Issues
Whether a co-operative society providing financial accommodation for agricultural purposes is eligible for deduction under Section 80P of the Income-tax Act, 1961, especially in light of the provisions of Section 80P(4).
Sections Cited
80P, 80P(4), 143(3)
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Income Tax Appellate Tribunal, “SMC” BENCH, COCHIN
Before: Shri Inturi Rama Rao
Asst.Year 2017-2018 Kalliad Service Co-operative The Income Tax Officer Bank Limited No.F-1281 v. Ward 3 Kalliad PO Kannur. Kannur – 670 593. PAN : AAAAK5259N. (Appellant) (Respondent) Appellant by : ---- None ---- Respondent by : Smt.Leena Lal, Senior AR Date of Date of Hearing : 03.02.2025 Pronouncement : 10.02.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Assessment Centre / Commissioner of Income- tax (Appeals) [“CIT(A)” for short] dated 07.06.2024 having DIN & Order No.ITBA/NFAC/S/250/2024-25/1065481491(1) for the assessment year 2017-2018.
The brief facts of the case are that the assessee is a co-operative society registered under the Kerala Co-operative Societies Act, formed with the object of providing financial accommodation to its members for agricultural purposes. The return of income for the assessment year 2017-2018 was filed on 18.01.2018 declaring `Nil’ income after claiming deduction u/s.80P of the Income-tax Act, 1961 (“the Act” hereinafter) at Rs.16,48,770. Against the said return of income, . Kalliad SC.B Limited. assessment was completed by the Assessing Officer (“the AO" hereinafter) vide order dated 24th December, 2019 passed u/s.143(3) of the Act at a total income of Rs.16,48,770 by denying the claim of deduction u/s.80P of the Act by placing reliance of provisions of sub- section (4) of sec.80P of the Act.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved by the order of the CIT(A), the assessee is in appeal before us in the present appeal. When the appeal was called for, none appeared on behalf of the assessee despite due service of notice. Therefore, I proceed to dispose of the appeal on merits.
I have heard the rival submissions and perused the material available on record. I find that the issue is now settled by the judgment of the Hon’ble Supreme Court in the case of Mavilayi Service Co- operative Bank Ltd. v. CIT [2021] 431 ITR 1 (SC). Respectfully following the judgment of the Hon’ble Supreme Court, we direct the AO to allow the claim of the assessee. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 10th day of February, 2025.