2019 (1) TMI 1007

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....urn of income for Assessment Year 2015-16 on 27.09.2015 declaring NIL income, after claiming deduction of Rs. 11,37,984/- u/s 80P(2)(a)(i) of the Income Tax Act, 1961 (in short 'the Act'). The case was taken up for scrutiny and the assessment completed u/s 143(3) of the Act vide order dated 16.11.2017 wherein the assessee's income was determined at Rs. 11,37,984/-; on the ground that since the assessee is dealing with nominal and associate members, therefore it is not eligible for deduction u/s 80P(2)(a)(i) of the Act. In coming to this view, the Assessing Officer (AO) followed the decision of the Hon'ble Apex Court in the case of Citizens Co-operative Society Ltd., (397 ITR 1)(SC). 2.2 Aggrieved, the assessee preferred an appeal before t....

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....Act even though the appellant has not violated provisions of section 80P of the Act. 5. Without prejudice to the above grounds, that the learned Commissioner of Income Tax (Appeals) ought to have allowed the deduction u/s. 80P(2)(a)(i) on proportionate basis to the extent of income from Regular Members. 4.1 The learned AR of the assessee was heard in support of the grounds raised. The learned AR submitted that the AO disallowed the assessee's claim for deduction u/s 80P(2)(a)(i) of the Act as he was of the view that the decision of Hon'ble Apex Court in the case of Citizens Co-operative Society Ltd., (397 ITR 1) was squarely applicable to the facts of the case on hand. According to the learned AR, even though before the CIT(A) it was co....

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....ade in 2014 and 2016 (supra) do not have any impact on section 80P of the Act and therefore the deduction claimed by the assessee u/s 80P(2)(a)(i) of the Act is allowable. 4.2 Per contra, the learned DR for Revenue supported the orders of the authorities below. 4.3.1 I have heard the rival contentions and perused and carefully considered the material on record. It is seen that the CIT(A) has not dealt with the assessee's contention raised before him that the decision of the Hon'ble Apex Court in Citizen Co-operative Society Ltd., (supra) is distinguishable as the Karnataka Co-operative Societies Act, 1959 permits a Co-operative Society to admit nominal members and the assessee's claims that the amendments of 2014 and 2016 to the Karnataka....