2016 (11) TMI 1722 - HC - Income Tax

High Court upholds Tribunal's decision on Section 80P deduction for cooperative society

Commissioner of Income Tax, Chennai Versus M/s Tamilnadu Cooperative Housing Federation Ltd.

The High Court upheld the Income Tax Appellate Tribunal's decision to allow deduction under Section 80P (2) of the Income Tax Act to the cooperative ... Deduction u/s 80P - HELD THAT:- While dealing with Tax Case Appeal [2016 (9) TMI 952 - MADRAS HIGH COURT] a Division Bench of this Court to which one of us (Nooty. Ramamohana Rao, J) is a member, had occasion to consider the very same substantial questions of law which have fallen for consideration in this appeal and those substantial questions of law were answered in favour of the Assessee and against the Revenue, as the Assessee is a mere Co-operative Society but not a Co-operative Bank. We have not found any error committed by the AO the Appellate Authority and the Tribunal in coming to the conclusions to which they have arrived at. We subscribe to the same reasoning and accordingly, we dismiss this Tax Case Appeal. Issues:1. Whether the Income Tax Appellate Tribunal was right in upholding the order directing the assessing officer to allow deduction under Section 80P (2) of the Income Tax Act to the assesseeRs.2. Whether the Income Tax Appellate Tribunal was right in holding that the assessee's claim for deduction is not restricted by Section 80P (4) of the Income Tax ActRs.Analysis:Issue 1:The High Court considered the appeal filed by the Revenue against the order of the Income Tax Appellate Tribunal. The key question was whether the Tribunal was correct in upholding the direction to allow deduction under Section 80P (2) of the Income Tax Act to the assessee. The Court noted that a previous Division Bench had already considered and ruled on similar questions in favor of the assessee, who was a cooperative society and not a cooperative bank. The Court found no errors in the decisions of the Assessing Officer, the Appellate Authority, and the Tribunal. Consequently, the Court dismissed the Tax Case Appeal.Issue 2:The second issue revolved around whether the Tribunal was correct in determining that the assessee's claim for deduction was not limited by Section 80P (4) of the Income Tax Act. The Court's decision on this issue was intertwined with the previous ruling in favor of the assessee being a cooperative society. As the Court had already upheld the nature of the assessee as a cooperative society, it naturally followed that the claim for deduction was not restricted by Section 80P (4). The Court's dismissal of the Tax Case Appeal encompassed this aspect as well, affirming the Tribunal's decision on the issue.In conclusion, the High Court, comprising Mr. Justice Nooty.Ramamohana Rao and Dr. Justice Anita Sumanth, upheld the decisions of the lower authorities and dismissed the Revenue's appeal. The judgment reiterated the nature of the assessee as a cooperative society, not a cooperative bank, and affirmed the Tribunal's rulings on the deductions under Section 80P of the Income Tax Act.