M/S GRADUATES CO-OPERATIVE CREDIT SOCIETY LTD,BANGALORE vs. INCOME TAX OFFICER WARD-6(2)(1), BANGALORE
What did the Tribunal hold?
The Tribunal found that the CIT(A)'s order did not consider the latest judgment of the Hon'ble Apex Court in The Citizen Co-operative Society Ltd. vs. ACIT. Therefore, the matter was restored to the CIT(A) for a fresh decision after considering this judgment and comparing the facts.
What were the facts?
The assessee, a co-operative credit society, claimed deduction under Section 80P(2)(a)(i) of the Income Tax Act. The CIT(A) disallowed this claim, considering the society to be a co-operative bank and differentiating the applicability of Section 80P(2)(a)(i) and 80P(4).
What were the issues?
Whether the assessee co-operative credit society is eligible for deduction under Section 80P(2)(a)(i) and whether the CIT(A) erred in disallowing the claim without considering the latest Supreme Court ruling.
Which sections of the Income-tax Act were involved?
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- Citizen Co-operative Society Ltd. v. ACIT499 citing397 ITR 1 · 2017 · SC
Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI N.V. VASUDEVAN & SHRI ARUN KUMAR GARODIA
O R D E R Per Shri A.K. Garodia, Accountant Member Both these appeals are filed by the assessee and these are directed against two separate orders of CIT(A)-1, Bangalore both dated 30.11.2017 for Assessment Years 2009-10 and 2010-11. Both these appeals were heard together and are being disposed of by way of this common order for the sake of convenience.
The grounds raised
by the assessee for Assessment Year 2009-10 in are as under. “1. On the facts and in the circumstances of the case and in law, the Learned CIT(A)-I, Bangalore has grossly erred in dismissing the appeal filed by the Appellant.
2. Learned CIT (A) -I Bangalore is grossly erred in the differentiating the definitions and applicability of the 80P(2)(a)(i) and 80P(4) of Income Tax Act., disallowed the claim of the deduction under section 80P(2)(a)(i) by considering the appellant is a co-operative bank, by reading section 80(P)((2)(a)(i) together with the section 80P(4). Wrongly considering section 80(P)(2)(a)(i) is applicable only for primary agricultural credit society or a primary co-operative agricultural & rural development bank.
As per the provisions of the section 80P(2)(a)(i) of the income tax act, which is reproduced below: 80P. Deduction in respect of income of co-operative societies. (1) Where, in the case of an assessee being a co-operative society, the gross totalincome includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, thesums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely : (a) in the case of a co-operative society engaged in (i) carrying on the business of banking or providing credit facilities to its members. On the facts and in the circumstances of the case and in law the Assessing Officererred in reading the section 80(P)(2)(a)(i) without appreciating that all its members are graduates.
Learned CIT(A) -I Bangalore, grossly erred in reading the section 80(P)(2)(a)(i) without appreciating that all its members are graduates who are residing within the jurisdiction as specified in the bye laws of credit society. a credit co-operative society formed for exclusive benefits of the graduates.
5. The Appellant prays that the disallowance of Rs.12,84,180/- in respect of the income derived from the activities of the appellant engaged in Carrying on the business of banking or providing credit facilities to its members.
The appellant prays to adduce such further evidence to substantiate his case.
The appellant prays leave to add, alter, clarify amend and or withdraw any grounds of appeal as and when the occasion demands.”
3. The grounds raised
by the assessee for Assessment Year 2010-11 in are as under.
1. On the facts and in the circumstances of the case and in law, the Learned CIT(A)-I, Bangalore has grossly erred in dismissing the appeal filed by the Appellant.
2. Learned CIT (A) -I Bangalore is grossly erred in the differentiating the definitions and applicability of the 80P(2)(a)(i) and 80P(4) of Income Tax Act., disallowed the claim of the deduction under section 80P(2)(a)(i) by considering the appellant is a co-operative bank, by reading section 80(P)((2)(a)(i) together with the section 80P(4). Wrongly considering section 80(P)(2)(a)(i) is applicable only for primary agricultural credit society or a primary co-operative agricultural & rural development bank.
3. As per the provisions of the section 80P(2)(a)(i) of the income tax act, which is reproduced below: 80P. Deduction in respect of income of co-operative societies. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub- section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub- section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely : (a) in the case of a co-operative society engaged in (i) carrying on the business of banking or providing credit facilities to its members. On the facts and in the circumstances of the case and in law the Assessing Officererred in reading the section 80(P)(2)(a)(i) without appreciating that all itsmembers are graduates. 4. Learned CIT(A) -I Bangalore, grossly erred in reading the section 80(P)(2)(a)(i) without appreciating that all its members are graduates who are residing within the jurisdiction as specified in the bye laws of credit society. a credit co-operative society formed for exclusive benefits of the graduates. 5. The Appellant prays that the disallowance of Rs.21,33,923/- in respect of the income derived from the activities of the appellant engaged in Carrying on the business of banking or providing credit facilities to its members. 6. The appellant prays to adduce such further evidence to substantiate his case. 7. The appellant prays leave to add, alter, clarify amend and or withdraw any grounds of appeal as and when the occasion demands.”
4. Both sides were heard and it was noted that the impugned order of CIT(A) is without considering the latest judgement of Hon’ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT as reported in 397 ITR 1 and therefore, we feel it proper to restore the entire matter back to the file of CIT(A) for fresh decision after considering this latest judgement of Hon’ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. vs. ACIT (supra) and after comparing the facts of the present case with the facts of that case. Hence the orders of CIT(A) are set aside in both the years and the entire matter is restored back to his file for fresh decision in the light of above discussion after providing adequate opportunity of being heard to both sides. Needless to say, the CIT (A) should pass a speaking and reasoned order after comparing the facts of the present case with the facts of that case i.e. in the case of The Citizen Co-operative Society Ltd. vs. ACIT (supra).
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on the date mentioned on the caption page.
More judgments on Section 80P(2)(a)(i)
- Duddukuru Primary Agricultural Cooperative… vs ITO, Ward - 1, TadepalligudemITA 258/VIZ/2026[2015-16]Status: Disposed16 Oct 2026AY 2015-16
- Parthasaradhi Mutually Aided Co-Operative… vs Income-Tax Officer, Ward-17(1), HyderabadITA 2322/HYD/2026[AY 2016-17]Status: Disposed16 Oct 2026
- The Development Multipurpose Credit &… vs ITO Ward 2 (4), Porbandar, GujaratITA 458/RJT/2026[2017-18]Status: Disposed15 Oct 2026AY 2017-18
- Hislop College Employees Cooperative Credit… vs ITO Ward 2(3), NagpurITA 184/NAG/2026[2018-19]Status: Disposed14 Oct 2026AY 2018-19
- Jijamata Mahila Gramin Bigar Sheti Sahakari… vs ITO Ward -1, BhandraITA 102/NAG/2026[2020-21]Status: Disposed12 Oct 2026AY 2020-21
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