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Facts
The assessee, a credit cooperative society, claimed a deduction of Rs. 52,70,558 under Section 80P of the Income Tax Act for AY 2020-21. The Assessing Officer denied this deduction, stating that the assessee failed to provide details of commission earned from members/non-members and supporting evidence. The CIT(A) partly allowed the appeal, leading the assessee to further appeal before the Tribunal.
Held
The Tribunal observed that the assessee failed to produce the required details before the lower authorities. Applying principles of natural justice, the Tribunal remitted the case back to the Assessing Officer to examine the details regarding members and commission income, allowing the assessee another opportunity to furnish the same for a decision on merits.
Key Issues
The key legal issues concern the assessee's eligibility for deduction under Section 80P for banking and agricultural produce marketing activities, specifically regarding commission income from non-members, and the failure to provide supporting evidence during assessment.
Sections Cited
143(3), 80P, 80P(2)(a)(i), 80P(2)(a)(iii), 143(2), 142(1), Chapter VI-A
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Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1075171629(1) dated 28.03.2025 for the A.Y.2020-21 arising out of the order passed under section 143(3) of the Income Tax Act, 1961 (in short ‘Act’) dated 16.09.2022.
Voodimudi Primary Agricultural Cooperative Credit Society Limited 2. Brief facts of the case are that, assessee is a credit co-operative society engaged in the business of providing credit facilitates to its members. Assessee filed its return of income on 14.01.2021 for the A.Y. 2020-21declaring and total income of Rs.Nil after claiming deduction of Rs.52,70,558/- under section 80P of the Act. Assessee claimed duction of Rs.23,81,934/ under section 80P(2)(a)(i) for banking / credit facilities to its members and Rs. 28,88,624/- under section 80P(2)(a)(iii) for marketing of agricultural produce. The case of the assessee selected for limited scrutiny to examine the issues of: a. Deduction from total income under Chapter VI-A b. Low income comparison to high loans / advances/ investment in share appearing in balance sheet and c. High liabilities as compared to low income / receipts.
Subsequently, statutory notices under section 143(2) and 142(1) of the Act were issued and served on the assessee. In response, assessee filed its reply on 27.11.2021 and furnished the information as called for. After considering the submissions of the assessee, Ld. Assessing Officer [hereinafter in short “Ld.AO"] noticed that assessee failed to furnish the details of commission earned by the assessee from members/non- members and has only filed copy of Form 26AS, from which the commission to members / non-members could not be determined. Therefore, he concluded the assessment by observing that assessee failed to produce the relevant documentary evidences to prove that it has expended expenditure with respect to earning of interest income and Page No. 2
4. On being aggrieved by the order of the Ld. AO, assessee preferred an appeal before the Ld. CIT(A) and submitted its submissions. After considering the submissions of the assessee, Ld. CIT(A) partly allowed the appeal of the assessee.
On being aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us by raising following grounds of appeal: - “1. The order of CIT (Appeals) NFAC is arbitrary and unjust.
2. The CIT(A) ought to have allowed deduction US 80P(2)(a)(iii) in respect of commission earned from Andhra Pradesh state Civil supplies corporation limited.
3. The CIT(A) ought to have given some more time for giving the details of member wise commission earned from Andhra Pradesh state Civil supplies corporation limited instead of dismission of the appeal.
The appellant craves leave to add to, amend, alter, delete all or any of the above grounds of appeal.”
6. At the time of hearing, Ld. Authorised Representative [hereinafter “Ld.AR”] of the assessee submitted the details of members of the society, which he could not be able to produce before the Ld. AO as well as Ld. CIT(A). He therefore pleaded that the matter be remitted back to the file of the Ld. AO for examination and deciding the case on merits.
Page No. 3 Voodimudi Primary Agricultural Cooperative Credit Society Limited 7. Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] relied on the orders of lower authorities. However, she has no objection to remit this issue back to the file of the Ld. AO for verification.
We have heard the rival submissions and perused the material available on record including the details of Members produced before us by the Ld.AR. We observe that assessee has failed to produce these details before Ld. AO as well as Ld. CIT(A), we therefore in order to provide one more opportunity to the assessee by following the principles of natural justice, considered it deem fit to remit the matter back to the file of the Ld. AO for adjudicating the case on merits based on the details produced by the assessee. Needless to say, that the assessee should cooperate with the assessment proceedings before the Ld. AO without seeking unnecessary adjournments, failing which the Ld. AO is at liberty to decide the issue on merits in accordance the with the material available on record.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 28th August, 2025.
Sd/- Sd/- (दुव्वूरु आर एल रेड्डी) (एस बालाकृष्णन) (DUVVURU RL REDDY) (S. BALAKRISHNAN) उपाध्यक्ष/ VICE PRESIDENT लेखा सदस्य/ACCOUNTANT MEMBER Dated: 28.08.2025 Giridhar, Sr.PS Page No. 4 Voodimudi Primary Agricultural Cooperative Credit Society Limited आदेशकीप्रतततितिअग्रेतषत/ Copy of the order forwarded to:- 1. तिर्ााररती/ The Assessee : Voodimudi Primary Agricultural Cooperative Credit Society Limited K. Gangavaram, Kotipalli-533306 Andhra Pradesh 2. राजस्व/ The Revenue : Income Tax Officer Rajahmundry 3. The Principal Commissioner of Income Tax 4. तिभागीयप्रतततितर्, आयकरअिीिीयअतर्करण, तिशाखािटणम /DR,ITAT, Visakhapatnam 5. The Commissioner of Income Tax 6. गार्ाफ़ाईि / Guard file आदेशािुसार / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam
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