Appeals allowed, matter remanded for further examination under Kerala Co-operative Societies Act

The appeals were allowed, and the matter was remanded to the Assessing Officer for further examination based on the activities of the cooperative society under the Kerala Co-operative Societies Act, 1969, and relevant legal precedents. The Tribunal emphasized the necessity of scrutinizing the society's activities to determine eligibility for deductions under section 80P of the Income Tax Act, aligning with previous court judgments and directives.

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Issues Involved:
Appeals against CIT(A) orders disallowing deduction u/s 80P of the I.T.Act for assessment years 2011-12 to 2014-15.

Detailed Analysis:

1. Disallowance of Deduction u/s 80P:
The Assessing Officer disallowed the deduction u/s 80P of the I.T.Act for the assessee, a cooperative society, claiming it was engaged in banking activities. The CIT(A) initially allowed the deduction based on the judgment of the jurisdictional High Court. However, after a subsequent judgment by a Full Bench, the CIT(A) issued orders u/s 154 disallowing the deduction, stating the need for an inquiry into the activities of the society for each assessment year. The Tribunal restored the issue to the Assessing Officer for examination based on the activities of the society under the Kerala Co-operative Societies Act, 1969.

2. Interest Income from Investments:
The Tribunal referred to a previous order regarding interest income from investments with treasuries and banks, categorizing it as 'income from business' instead of 'income from other sources' for the assessee. However, the grant of deduction u/s 80P on such interest income was subject to the examination of the society's activities by the Assessing Officer, as per the Full Bench judgment. The Tribunal ordered the Assessing Officer to follow this directive.

3. Legal Precedents and Jurisdictional High Court Decisions:
The judgment highlighted conflicting decisions by the jurisdictional High Court regarding the eligibility of cooperative societies for deduction u/s 80P. It referenced the need for an inquiry into factual activities of the society, emphasizing that each assessment year requires a separate verification of eligibility. The Tribunal aligned with the Full Bench judgment's requirement for the Assessing Officer to scrutinize the society's activities before granting deductions.

4. Conclusion:
The Tribunal allowed the appeals for statistical purposes, directing a re-examination of the deduction u/s 80P and interest income issues by the Assessing Officer in compliance with the Full Bench judgment. The decision emphasized the necessity of assessing the society's activities to determine eligibility for deductions, in line with legal precedents and jurisdictional High Court interpretations.

Judgment:
The appeals were allowed, and the matter was remanded to the Assessing Officer for further examination based on the activities of the cooperative society under the Kerala Co-operative Societies Act, 1969, and the relevant legal precedents.

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