Tribunal allows appeal for reevaluation of deduction claim under section 80P

The Tribunal allowed the appeal for statistical purposes, directing the Assessing Officer to reevaluate the deduction claim under section 80P in accordance with the principles outlined in a recent judgment by the Hon'ble Apex Court. The decision was rendered on September 20, 2021.

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Issues:
- Whether the CIT(A) was justified in confirming the disallowance of claim of deduction u/s 80P of the I.T.Act.

Analysis:
The appeal in this case was against the CIT(A)'s order regarding the disallowance of deduction u/s 80P of the I.T.Act for the assessment year 2017-2018. The Assessing Officer (A.O.) observed that the assessee, a co-operative society, had income from both members and non-members. Due to income from non-members, the A.O. concluded that the principle of mutuality was violated, denying the deduction u/s 80P based on the judgment of the Hon'ble Apex Court in a specific case. The CIT(A) upheld the A.O.'s decision, stating that the judgment applied to the case and the principle of mutuality was missing, with no successful challenge from the assessee.

The assessee then appealed to the Tribunal, presenting various documents and relying on a recent judgment by the Hon'ble Apex Court in another case. The Tribunal considered the recent judgment and held that the expression "members" in section 80P should be interpreted based on the State Co-operative Societies Act. If associate/nominal members are recognized as members under the State Act, the assessee is entitled to the deduction u/s 80P. Consequently, the Tribunal directed the A.O. to reconsider the deduction issue, providing the assessee with a fair hearing and deciding in accordance with the law.

Ultimately, the Tribunal allowed the appeal for statistical purposes, ordering the A.O. to review the deduction claim afresh in light of the principles established by the recent Hon'ble Apex Court judgment. The decision was pronounced on September 20, 2021.

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