TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>ITAT affirms co-op credit society's Sec. 80P eligibility</h1> <h3>Income Tax Officer-20 (3) (4), Mumbai Versus The KEM Hospital & Sheth GSM College Employees Co-operative Credit Society Limited</h3> Income Tax Officer-20 (3) (4), Mumbai Versus The KEM Hospital & Sheth GSM College Employees Co-operative Credit Society Limited - TMI Issues:- Interpretation of Sec. 80P(2)(a)(i) of the Income Tax Act, 1961- Eligibility of a co-operative credit society for deduction under Sec. 80P(2)- Application of Sec. 80P(4) to determine eligibility for deductionAnalysis:Interpretation of Sec. 80P(2)(a)(i) of the Income Tax Act, 1961:The case involved a co-operative credit society claiming deduction under Sec. 80P(2)(a)(i) of the Income Tax Act, 1961. The Assessing Officer (A.O) contended that the society did not qualify for the deduction as it was considered a primary co-operative bank under Sec. 80P(4). The A.O's decision was based on the conditions specified in Sec. 56(c)(ccv) of the Banking Regulation Act, 1949, which the society was deemed to fulfill. However, the society argued that it was not engaged in banking activities for the public but only provided financial assistance to its members, thus not meeting the criteria of a co-operative bank.Eligibility of a co-operative credit society for deduction under Sec. 80P(2):The Commissioner of Income Tax (Appeals) [CIT(A)] analyzed the nature of the society's operations and concluded that it did not meet the criteria to be classified as a primary co-operative bank. The CIT(A) referred to previous judgments and upheld the society's eligibility for the deduction under Sec. 80P(2)(a)(i). It was highlighted that the society's activities were limited to providing credit facilities to its members and not to the public at large, which was a key factor in determining its eligibility for the deduction.Application of Sec. 80P(4) to determine eligibility for deduction:The A.O's application of Sec. 80P(4) to deny the deduction was challenged by the society, emphasizing that it did not operate as a co-operative bank and therefore should not be subject to the restrictions imposed by the provision. The ITAT Mumbai, after considering the arguments from both sides and reviewing relevant precedents, upheld the CIT(A)'s decision that the society was not covered by Sec. 80P(4) and was entitled to the deduction under Sec. 80P(2)(a)(i). The Tribunal's decision was based on the society's business model, which focused on serving its members rather than engaging in general banking activities.In conclusion, the ITAT Mumbai dismissed the revenue's appeal, affirming the society's eligibility for the deduction under Sec. 80P(2)(a)(i) of the Income Tax Act, 1961. The judgment highlighted the distinction between a co-operative credit society and a co-operative bank, emphasizing that the society's operations aligned with the criteria for the deduction, as it primarily served its members without engaging in broader banking activities for the public.
TaxTMI 