TaxTMI 
TaxTMI 
2020 (1) TMI 957
X X X X Extracts X X X X
X X X X Extracts X X X X
....ls admitted for adjudication. 2.1 I have gone through the condonation petition, explaining the reason for the delay in filing the appeals before the Tribunal. I find that there is good and sufficient reasons for belatedly filing the appeals. Hence, the delay of 10 days in filing the appeals is condoned and the appeals admitted for adjudication. 3. The brief facts of the case are as follow: The assessee is a co-operative society registered under the Kerala Co-operative Societies Act, 1969. For the assessment years 2010-11 to 2014-15, the returns of income were filed, claiming deduction u/s 80P of the I.T.Act. The Assessing Officer passed assessment orders u/s 143(3) of the I.T.Act for AYs 2010-11 to 2014-15, disallowing the claim of deduction u/s 80P of the I.T.Act. The reasoning of the Assessing Officer to disallow the claim of deduction u/s 80P(2) of the I.T.Act was that the assessee was doing the business of banking, and therefore, in view of insertion of section 80P(4) of the I.T.Act with effect from 01.04.2007, the assessee will not be entitled to the deduction u/s 80P(2) of the I.T.Act. The Assessing Officer also disallowed the claim of deduction with regard to interest inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AR submitted that as per Part V of the Banking Regulations Act, a Primary Agricultural Credit Co-operative Society means a Co-operative Society, the primary object or principal business of which is to provide financial accommodation to its members for Agricultural purpose or for purpose in connection with Agricultural activities. It was submitted that the assessee- Bank was entitled for 80P deduction and for this the society must be a primary Agricultural Society and registered as such under the Kerala Co-operative Societies Act. According to the Ld. AR, a certificate was issued by the Joint Registrar of Co- operative Societies, Kollam to this effect. It was submitted that the assessee was registered under the Kerala Co-operative Societies Act 1969 as a Primary Agricultural Credit Co-operative Society and once it is classified as a primary Agricultural Credit Co-operative Society by the competent authority under the Kerala Co-operative Societies Act as ruled by the Hon'ble High Court of Kerala. The Ld. AR submitted that the principal object of such a society was to undertake Agricultural Credit Activity and provide loans and advances for agricultural purposes. The rate of inter....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... I have heard the rival submissions and perused the material on record. The Hon'ble jurisdictional High Court in the case of Chirakkal Service Co-operative Co-operative Bank Ltd. v. CIT [(2016) 384 ITR 490 (Ker.)] had held that when a certificate has been issued to an assessee by the Registrar of Co-operative Societies characterizing it as primary agricultural credit society, necessarily, the deduction u/s 80P(2) of the I.T.Act has to be granted to the assessee. However, the Full Bench of the Hon'ble Kerala High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra) had reversed the above findings of the Hon'ble Kerala High Court in the case of Chirakkal Service Co-operative Co-operative Bank Ltd. v. CIT (supra). The Larger Bench of the Hon'ble Kerala High Court in the case of The Mavilayi Service Co-operative Bank Ltd. v. CIT (supra) held that the Assessing Officer has to conduct an inquiry into the factual situation as to the activities of the assessee society to determine the eligibility of deduction u/s 80P of the I.T.Act. It was held by the Hon'ble High Court that the Assessing Officer is not bound by the registration certificate issued by the Regist....
X X X X Extracts X X X X
X X X X Extracts X X X X
....268]. Moreover, the law laid down by the Division Bench in Chirakkal [384 ITR 490] is not good law, since, in view of the law laid down by the Apex Court in Citizen Co-operative Society [397 ITR 1], on a claim for deduction under Section 80P of the Income Tax Act, by reason of sub-section (4) thereof, the Assessing Officer has to conduct an enquiry into the factual situation as to the activities of the assessee society and arrive at a conclusion whether benefits can be extended or not in the light of the provisions under sub-section (4) of Section 80P of the IT Act. In view of the law laid down by the Apex Court in Citizen Co-operative Society [397 ITR 1] the law laid down by the Division Bench Perinthalmanna [363 ITR 268] has to be affirmed and we do so. 35. In view of the law laid down by the Apex Court in Ace Multi Axes Systems' case (supra), since each assessment year is a separate unit, the intention of the legislature is in no manner defeated by not allowing deduction under Section 80P of the IT Act, by reason of sub-section (4) thereof, if the assessee society ceases to be the specified class of societies for which the deduction is provided, even if it was eligible in th....