2019 (8) TMI 452 - AT - Income Tax

Tribunal refers deduction claim back for re-examination under Income Tax Act

The Tribunal set aside the order of the Commissioner of Income-tax and referred the matter back to the Assessing Officer for re-examination of the ... Denial of deduction u/s 80P(2) - allegation that assessee was engaged in transacting in banking business and thus it is a primary cooperative bank and does not form the second category of co-operative credit societies - HELD THAT:- Respectfully following the decisions of the Co-ordinate Bench in the assessee’s own case for Assessment Year 2012-13 [2018 (10) TMI 1028 - ITAT BANGALORE] restore the matter to the file of the AO for re-examination / re-adjudication of the assessee’s claim for deduction under section 80P(2), for the 4 Assessment Years involved, i.e., Assessment Years 2011-12, 2013-14, 2015-16 and 2016-17; in the light of the directions / observations issued by the earlier Co-ordinate Bench in the case of Udaya Souharda Credit Co-operative Society Ltd., Vs. ITO [2018 (8) TMI 1063 - ITAT BANGALORE] as to whether or not the assessee is entitled to deduction under section 80P(2). It is accordingly ordered. Assessee’s appeals allowed for statistical purposes. Issues:Denial of deduction claimed under section 80P(2) of the Income Tax Act for Assessment Years 2011-12, 2013-14, 2015-16, and 2016-17.Analysis:The appeals by the assessee were directed against the orders of Commissioner of Income-tax (A)-5, Bangalore, for the mentioned Assessment Years. The issue primarily revolved around the denial of deduction claimed under section 80P(2) of the Income Tax Act. The learned Standing Counsel for Revenue highlighted that the issue was previously addressed in the assessee's own case for Assessment Year 2012-13 by a Co-ordinate Bench of the Tribunal.The Co-ordinate Bench's decision in the earlier case emphasized the need for fresh consideration of the deduction claim under section 80P(2) of the Act. It specifically focused on the registration status of the assessee under the Karnataka Souhardha Sahakari Act, 1977, and whether it qualified as a cooperative society for the deduction. The Tribunal directed the matter to be re-examined by the Assessing Officer to determine the eligibility of the assessee for the deduction.The Tribunal's analysis delved into the distinction between cooperatives and cooperative societies under the Karnataka laws. It highlighted the specific definitions and conversion provisions under the Karnataka Cooperative Societies Act, 1959, and the Karnataka Souharda Sahakari Act, 1997. The Tribunal concluded that the assessee, registered as a cooperative under the Souhardha Sahakari Act, did not meet the criteria to be considered a cooperative society eligible for the deduction under section 80P(2) of the Act.Considering the legal arguments and the fundamental nature of the registration status, the Tribunal decided to set aside the order of the CIT(A) and referred the matter back to the Assessing Officer for a thorough re-examination. The Tribunal's decision was based on the need for proper adjudication of the registration status and its implications on the assessee's eligibility for the deduction.In alignment with the earlier decision in the assessee's case for Assessment Year 2012-13, the Tribunal ordered the matter to be restored to the file of the Assessing Officer for re-examination of the deduction claim for the mentioned Assessment Years. The Tribunal allowed the assessee's appeals for the specified years solely for statistical purposes, emphasizing the need for a detailed reassessment based on the registration status and legal provisions.Overall, the judgment focused on the intricate legal aspects of cooperative registration, the distinction between cooperatives and cooperative societies, and the specific requirements for claiming deductions under section 80P(2) of the Income Tax Act. The Tribunal's decision underscored the importance of proper registration status and compliance with relevant laws for availing tax benefits.