2014 (8) TMI 1086 - AT - Income Tax

Tribunal affirms bank's eligibility for tax deduction as cooperative society under Section 80P

The Tribunal upheld the Commissioner's orders allowing deduction under section 80P(2)(a)(i) of the Act for the assessment years 2008-09 & 2010-11. It ... Deduction under section 80P(2)(a)(i) - whether assessee being a regional rural bank established under RRB Act, 1976, was to be treated as a co-operative bank or could be considered as a co-operative society? - Held that:- This issue has been decided in favour of the assessee in its own case for the earlier assessment years by the co-ordinate Bench of this Tribunal [2012 (8) TMI 1059 - ITAT CHENNAI] held that there is much strength in the argument of the assessee that it is to be treated as cooperative society in view of the provisions contained in RRB Act, 1976. If so, it would be eligible under section 80P(2)(a)(i) of the Act - Decided in favour of assessee Issues:Appeal against Commissioner of Income Tax (Appeals) orders allowing deduction under section 80P(2)(a)(i) of the Act for assessment years 2008-09 & 2010-11.Analysis:The Revenue filed two appeals against the orders of the Commissioner of Income Tax (Appeals) regarding the allowance of deduction under section 80P(2)(a)(i) of the Act for the assessment years 2008-09 & 2010-11. The Revenue contended that the Commissioner erred in allowing the deduction. The assessee, however, argued that a co-ordinate Bench of the Tribunal had previously allowed the deduction for the assessment years 2007-08 to 2009-10 in the assessee's own case. The Departmental Representative relied on the Assessing Officer's orders, while the counsel for the assessee referenced the previous decision of the Tribunal in favor of the deduction.Upon review, the Tribunal found that in the earlier case, the Tribunal had allowed the deduction under section 80P(2)(a)(i) for the assessment years 2007-08 to 2009-10. The Tribunal had determined that the assessee, a regional rural bank established under the RRB Act, 1976, should be treated as a cooperative society and not a cooperative bank. As a cooperative society, the assessee was eligible for the deduction under section 80P(2)(a)(i) of the Act. Therefore, following the previous decision and the specific finding in the assessee's case, the Tribunal allowed the deduction for the current assessment years as well.Consequently, the Tribunal upheld the orders of the Commissioner of Income Tax (Appeals) and rejected the grounds raised by the Revenue. As a result, both the appeals of the Revenue and the cross objections of the assessee were dismissed. The cross objections filed by the assessee were deemed infructuous. The judgment was pronounced in open court on a specified date in Chennai.In conclusion, the Tribunal's decision was based on the interpretation of the relevant provisions of the RRB Act, 1976, and the applicability of section 80P(2)(a)(i) of the Act to the assessee as a cooperative society. The judgment provided clarity on the eligibility of the assessee for the deduction, aligning with the previous decision of the Tribunal in the assessee's own case for earlier assessment years.