2025 (7) TMI 1659

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... Society, as the facts of the appelant's case are different. 4. The Assessing officer failed to appreciate the definition of "member" under Section 2(16) of the Tamil Nadu Co-operative Societies Act, 1983, which includes "associate members," making the classification between "A-class" and "B-class" members irrelevant. 5. The CIT(A) Wrongly applied Section 80A(5) to deny the deduction under Section 80P, despite the appellant's compliance with substantive conditions. The appellant relied the following order of the Hon'ble ITAT Chennai bench i. The ACIT Vs M/s. DAEE Coop T&C Society ITA No.: 3047/CHNY/2019 dt. 10.11.2020 6. The CIT(A) Wrongly initiated penalty proceedings under Section 271(1)(c) without proving concealment of income. 3. Brief facts of the case are as follows: The assessee is a primary agricultural co-operative credit society limited registered under the Tamilnadu Co-operative Societies Act, 1983. For the assessment year 2012-13, the assessee did not file any return of income. Based on the information in the possession of the Department that assessee had deposited Rs. 61,23,750/- during the relevant assessment year 2012-13, notice u/s.148 of ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....31 ITR 1 is squarely applicable to the facts of the instant case. The Ld.AR also relied on the order of the Chennai Bench of the Tribunal in the case of AA533 Umareddiyur Primary Agricultural Co-operative Credit Society Ltd., in ITA No.2784/CHNY/2024, order dated 19.05.2025. 6. As regard the CIT(A) reasoning for denying the claim of deduction u/s.80P of the Act, the Ld.AR submitted the issue in question is squarely covered in favour of assessee by the order of the Chennai Bench of the Tribunal in the case of ACIT vs. DAEE Coop T&C Society in ITA No.3047/CHNY/2019, (order dated 10.11.2020), wherein it has been categorically held as per section 80A(5) of the Act claim of deduction u/s.80P of the Act need to be raised only in the return of income filed and there is no mention in the said section that the return of income has to be filed within the due date prescribed under 139(1) or 139(4) of the Act. 7. The Ld.DR supported the orders of the AO and CIT(A). 8. We have heard rival submissions and perused the material on record. The AO had denied the claim of deduction u/s.80P(2)(a)(i) of the Act for the reason that the assessee was dealing with nominal members who are not actual memb....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....0P(2) (a) (i) must, therefore, be construed in the context of the 65 provisions of the law enacted by the State Legislature under which the cooperative society claiming exemption has been formed. It İs, therefore, necessary to construe the expression "members" in Section 80P(2)(a)(i) of the Act in the light of the definition of that expression as contained in Section 2(n) of the Cooperative Societies Act. The said provision reads as under: "2. (n) Member' means a person who joined in the application for registration of a society or a person admitted to membership after such registration in accordance with the provisions of this Act, the rules and the bye-laws for the time being in force but a reference to 'members' anywhere in this Act in connection with the possession or exercise of any right or power or the existence or discharge of any liability or duty shall not include reference to any class of members who by reason of the provisions of this Act do not possess such right or power or have no such liability or duty;" Considering the definition of 'member' under the Kerala Act, loans given to such nominal members would qualify for the purpose of ded....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....filed belatedly pursuant to the notice issued u/s.148 of the Act (refer para 3 of the said order). The relevant finding of the Tribunal in the case of DAEE Coop T&C Society, supra read as follows:- 8. We have heard both the parties, perused the materials available on record and gone through the orders of authorities below along with various case laws cited by both the parties. There is no dispute with regard to the fact that the assessee is a credit co-operative society registered under the TamilNadu Co-operative Societies Act, 1983. It is also not in dispute that the assessee is engaged in the business of providing credit facilities to its members. The AO has disallowed deduction claimed u/s.80P(2)(a)(i) of the Act primarily on two grounds. The first objection of the AO is with regard to claim of deduction in the light of provisions of Section 80A(5) of the Act which restricts the deduction unless such deduction is claimed in the return of income. We have gone through the provisions of Section 80P read with Section 80A(5) of the Act and found that nowhere in Section 80P or in Section 80A(5) of the Act it is mentioned that the assessee is required to file its return of income wit....