2013 (5) TMI 1022 - AT - Income Tax

Tribunal Upholds Credit Co-op Society's Deduction Eligibility under IT Act Section 80P

The Tribunal upheld the CIT(A)'s decision, affirming the eligibility of a Credit Co-operative Society for deduction under Section 80P(2)(a)(i) of the ... Deduction u/s 80P(2)(a)(i) & 80P(4)-Intimation u/s 143(1) - Co-operative Credit Society - The A.O. was of the view that the assessee was neither a Primary agriculture Co-operative Society, nor was it entitled to the deduction according to Section 80P(2)(a)(i) of the IT Act, but was covered under the provisions of Section 80P(4). - HELD THAT:- The A.O’s. finding that in view of the amendment Act in Section 2(24) and 80P, the assessee was not eligible for deduction u/s.80P was not in accordance with law. - The assessee is not subject to Section 80P(4) (Cooperative Banks) and is also eligible for a deduction under Section 80P(2). Issues Involved:1. Interpretation of Section 80P of the Income Tax Act, 1961 for a Credit Co-operative Society.Analysis:Issue 1: Interpretation of Section 80P of the Income Tax Act, 1961 for a Credit Co-operative SocietyThe case involved appeals filed by the Revenue and Cross-Objections (C.O.) filed by the assessee against the order of the ld. CIT(A)-XX, Ahmedabad, for the assessment years 2007-08 & 2008-09. The primary contention was regarding the eligibility of the assessee, a Credit Co-operative Society, for deduction under Section 80P of the IT Act. The Assessing Officer (A.O.) had disallowed the deduction claimed by the assessee under Section 80P(2)(a)(i) on the grounds that the assessee did not fall under the specified categories. The CIT(A) partially allowed relief to the assessee, leading to the appeals before the Appellate Tribunal.The Revenue contended that the CIT(A) erred in law and on facts by deleting the disallowance made under Section 80P(2)(a)(i) for both assessment years. The assessee argued that it was a distinct entity from a Co-operative Bank and was providing credit facilities only to its members, thus fulfilling the requirements for deduction under Section 80P(2)(a)(i). The assessee also argued that the amendments in Section 80P(4) were not applicable to them.The Tribunal, after considering relevant precedents and the arguments presented, upheld the CIT(A)'s order. It noted that the assessee did not fall under Section 80P(4) and was entitled to the deduction under Section 80P(2). The Tribunal found no reason to interfere with the CIT(A)'s decision and dismissed the Revenue's appeals for both years.Regarding the Cross-Objections filed by the assessee, the Tribunal noted that they were not seriously argued and hence dismissed as not pressed. Consequently, the Tribunal dismissed both the Revenue's appeals and the assessee's Cross-Objections for the respective years.In conclusion, the Tribunal affirmed the CIT(A)'s decision, emphasizing the eligibility of the Credit Co-operative Society for deduction under Section 80P(2)(a)(i) of the IT Act, and dismissed the appeals and Cross-Objections accordingly.This judgment provides clarity on the interpretation of Section 80P of the IT Act for Credit Co-operative Societies, highlighting the eligibility criteria for claiming deductions under the specified provisions.