2022 (8) TMI 958

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....as raised the following grounds of appeal: "1. The Ld. CIT(A), Bathinda erred on facts and law in confirming the action of the AO of assessing the income of the assessee at Rs.2,46,13,931 / - vide assessment order u/s 143(3) dated 28.11.2017 as against nil income declared by the assessee after claiming deduction u/s 80P. 2. The Ld. CIT(A), Bathinda erred on facts and law in confirming the action of me AO of disallowing the deduction u/s 80P while recording a finding that the activities of the appellant extended to non-farm sector and also to non-members without giving any opportunity to the assessee because deduction u/s 80P was disallowed by the AO on a different ground that area of operation of the assessee was not confi....

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.....2,46,13,931/- and added the same to the returned income. 5. Being, aggrieved with the assessment order, the appellant-assessee filed appeal before the ld. CIT(A) who has confirmed the findings of the AO by observing vide para 4.2.10 is as under: "4.2.10 In the circumstances above, even if it is considered that the appellant is not a corporative bank losing its eligibility for deduction straight away u/s 80P(4) even then it is neither a primary agricultural credit society nor Primary Corporative Agricultural And Rural Development Bank for the reasons that the activities of the appellant extended to non-farm sector and also to nonmembers (Government Employees) who are admitted as nominal members just to bypass the legal provision....

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....n-farm sector and also to non-members without giving any opportunity to the assessee and without appreciating the facts that the deduction u/s 80P was disallowed by the AO on a different ground that area of operation of the assessee was not confined to its single taluk, and that he has wrongly interpreted the definition of Primary Cooperative Agricultural & Rural Development Bank as given in explanation to section 80P(4) of the Act. In support of its contention, the ld. AR has filed a paper book comprising of 52 pages which is placed on record for reference. 7. The ld. counsel of the assessee placed reliance on the judgment of Hon'ble Apex Court in the case of the Mavilayi Service Co-operative Bank Ltd. v. CIT, Calicut [2021] 123 taxmann....

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....nce the appellant falls into the trappings of section 80P(4), it loses complete claim over the deduction under section 80P of Income Tax Act. 10. The ld. Counsel argued that after the introduction of sub section 4 to section 80P of the Income Tax Act, the AO has to mandatory extent the benefits available, merely looking to the class of the society as per the certificate of registration issued under the Central or State Cooperative Societies Act and the rules made therein. However, while considering a claim of deduction u/s 80P of the Income Tax Act, the Assessing Officer has required to conduct inquiry into the factual situation as to the activities of the assessee society and arrived at the conclusion whether benefit can be extended or ....