SHRI SHIVAYOGI URBAN CO-OPERATIVE CREDIT SOCIETY LIMITED,BELGAVI vs. INCOME TAX OFFICER, WARD - 1(4), BELGAVI

ORDER This appeal preferred by the assessee emanates from the order of the ld. CIT(A) Belgaum dated 13-03-2019 for assessment year 2015-16 as per the following grounds of appeal.

1. Because, the learned Commissioner of Income Tax (Appeals) erred in law as well as on facts whiIe disallowing the deduction claimed under section 80P(2)(a)(i) of the Income Tax Act, 1961 by only relying upon the Supreme Court judgement of Citizen Co-operative Society Ltd.

2. Because, the learned Commissioner of Income Tax (Appeals) failed to appreciate that the Appellant is registered under Karnataka Cooperative Societies Act, 1959 and the judgement relied upon by the respondent, in the case of Supreme Court judgement of Citizen Co-operative Society Ltd Hyderabad, is not applicable to the Appellants case since the facts are different from the judgement . relied upon.

3. That the learned lower authorities failed to appreciate that the Appellant is registered under Karnataka Cooperative Societies Act, 1959 and the judgement relied upon by the respondent in the case of Supreme Court judgement of Citizen Co- operative Society Ltd, Hyderabad is not applicable to the Appellants case since the facts are different from the judgement relied upon.

4. Because, the learned lower authorities have erred in denying the deduction claimed under section 80P(2)(a)(i) of Income Tax Act, 1961 by not following section 80P(2)(a)(i) of Income Tax Act, 1961 and also not considering the provisions of Membership under the Karnataka Cooperative Societies Act, 1959.

5. The assessee craves leave add/alter any of the grounds of appeal before or at the time of hearing.”

2 ITA 191/PAN/2019 Shri Shivyagi Urban Co-op. Credit Society Ltd. A.Y. 2015-16 2. The brief facts of this case are that the assessee is a Co-operative Society registered under the Karnataka State Co-operative Societies Act. The assessee filed return of income on 21-09-2015 declaring total income at Rs. 16,86,259/- after claiming deduction u/s 80P(2)(a)(i) of the income-tax Act, 1961 (hereinafter referred to as “the Act”) under Chapter VIA of Rs. 16,86,259/- the total income declared is NIL. However, the claim of the assessee for deduction u/s 80P(2)(a)(i) of the Act was rejected by the A.O vide his order u/s 143(3) of the Act dated 16-11-2017 on the ground that the assessee had rendered credit facilities to non-members hence the ratio of the decision of Hon’ble Supreme Court decision, in the case of Citizen Co-op. Society Ltd., Hyderabad Vs. ACIT C-9(1), Hyderabad is applicable and as such, the assessee is not entitled to claim deduction u/s 80P.

3 ITA 191/PAN/2019 Shri Shivyagi Urban Co-op. Credit Society Ltd. A.Y. 2015-16 Co-operative Societies Act, 1959. Regarding this particular observation, the ld. D.R submitted that the findings needs more clarity as to what is the majority percentage of the loan that is given to the nominal members and what is the percentage of substantial interest income earned by the assessee by giving credit facilities to the nominal members. These findings should be brought out in absolute clarity with exact amounts involved before deciding the issue which the ld. CIT(A) has not done. In this regard, it was prayed by the ld. D.R. that the matter may be remanded back to the file of the ld. CIT(A) to come out with a specific finding on the said issue. The ld. A.R agreed to the proposition for remanding the matter back to the file of the ld. CIT(A).

are allowed for statistical purposes. 5. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 16th November, 2022.

Sd/- PARTHA SARATHI CHAUDHURY JUDICIAL MEMBER Pune; Dated : 16th November, 2022 Ankam

4 ITA 191/PAN/2019 Shri Shivyagi Urban Co-op. Credit Society Ltd. A.Y. 2015-16 Copy of the Order forwarded to :