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>Cooperative society wins section 80P(2)(a)(i) exemption for credit facilities to members despite public deposits</h1> <h3>M/s. Charvaka Seva Sahakari Bank Ltd., Charvaka PACS Ltd. Versus The Income Tax Officer, Ward – 1, Puttur</h3> M/s. Charvaka Seva Sahakari Bank Ltd., Charvaka PACS Ltd. Versus The Income Tax Officer, Ward – 1, Puttur - TMI Issues Involved:1. Condonation of delay in filing the appeal.2. Disallowance of deduction u/s 80P(2)(a)(i).3. Applicability of the ratio of the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. vs Commissioner of Income Tax, Calcutta.4. Classification of the assessee as not involved in the business of banking.5. Reliance on various case laws by the CIT(A).Judgment Summary:Issue 1: Condonation of DelayThe ITAT condoned a 2-day delay in filing the appeal, citing sufficient cause as per the principles laid down by the Hon'ble Supreme Court in Collector Land Acquisition Vs. Mst. Katiji & Ors. The Tribunal noted no malafide intention on the part of the assessee and emphasized a liberal approach towards condonation of delay to ensure justice on merits.Issue 2: Disallowance of Deduction u/s 80P(2)(a)(i)The assessee, a Primary Agriculture Co-operative Society, claimed a deduction u/s 80P on interest and dividend income from investments in South Canara District Co-op. Bank. The AO disallowed this, treating it as income from other sources, which was upheld by the CIT(A) based on the decision in Citizens Co-operative Society Ltd. v. ACIT. However, the ITAT directed the AO to grant relief in accordance with the Supreme Court's decision in Mavilayi Service Cooperative Bank Ltd., which supports the eligibility of co-operative societies to claim deductions u/s 80P(2)(a)(i), including transactions with nominal members.Issue 3: Applicability of Supreme Court RulingsThe ITAT applied the Supreme Court's ruling in Mavilayi Service Cooperative Bank Ltd., which clarified the eligibility of co-operative societies to claim deductions u/s 80P(2)(a)(i) for credit facilities provided to nominal members. This overturned the lower authorities' reliance on Citizens Co-operative Society Ltd. v. ACIT, which was deemed inapplicable to the assessee's situation.Issue 4: Business of BankingThe Tribunal recognized that the assessee, being a primary agricultural credit society, is not engaged in the business of banking as defined under the Banking Regulation Act, 1949, and thus eligible for deductions under section 80P(2)(a)(i) for providing credit facilities to its members.Issue 5: Reliance on Case LawsThe ITAT found that the CIT(A) erred in relying on various case laws that were not applicable to the appellant's case, specifically the misapplication of the ruling in Citizens Co-operative Society Ltd. v. ACIT, which pertained to co-operative societies engaged in banking with the general public.Conclusion:The appeal by the assessee was allowed, and the AO was directed to grant the claimed deductions in line with the Supreme Court's guidelines, ensuring that co-operative societies providing credit facilities to their members, including nominal members, are eligible for benefits under section 80P(2)(a)(i). The order was pronounced on 02nd January, 2024.
TaxTMI 
TaxTMI 
