AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1496
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....the assessment order passed u/s. 143(3) of the Income Tax Act, 1961 [the Act] on 7.4.2021 by the ITO, Ward 2(1), Mangalore was dismissed. The only reason being that the profits & gains amounting to Rs. 1,31,28,960 earned by the assessee cannot be said to be derived or earned from carrying on the business of providing credit facilities to its members and further deduction u/s. 80P of the Act cannot be allowed to the assessee. 2. Similarly for AY 2020-21 the assessee is in appeal against the appellate order passed by the NFAC, Delhi dated 27.6.2025 wherein the appeal filed by the assessee against the assessment order passed u/s. 143(3) of the Act dated 20.9.2022 passed by the Assessment Unit wherein amount of Rs. 30,62,453 was added to the....
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....layi Service Co-op. Bank Ltd. v. CIT, 431 ITR 1. Further with respect to the deduction u/s. 80P(2)(d) of the Act the decision of the Hon'ble Supreme Court was once again relied upon. The ld. CIT(A) categorically held that assessee is not eligible for deduction u/s. 80P(2)(d) of the Act. In para 4.8 the ld. CIT(A) held that income earned by the assessee of Rs. 1,31,28,960 cannot be said to be derived from the carrying on of business of providing credit facilities to its members and therefore the appeal of the assessee was dismissed. 6. For the AY 2020-21, the facts are also similar. The assessee filed its return of income on 10.2.2021 at a total income of Rs. 3,940 after claiming deduction of Rs. 40,20,722 as deduction u/s. 80P of the Act....
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....members. Further, the ld. AO also mentioned detailed discussion in the assessment order and arrived at a conclusion whether the benefits can be given or not in the light of the provisions of section 80P of the Act. The appeal of the assessee was dismissed. 8. In view of this, the assessee is in appeals before us for both the assessment years. The ld. AR submitted before us the factual paper book for both these years as well as relied upon several judicial precedents. He further stated that the orders of the ld. CIT(A) are not sustainable for both the years as they have misread the decision of the Hon'ble Supreme Court in the case of Mavilayi Service Co-op. Bank Ltd. (supra). Further the appellate order passed by the ld. CIT(A) in ITA No.....
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.... the allegation that has at all transacted with non-members. The assessee is also earned interest income from SCDCC Bank. It is claimed that such co-operative banks are co-operative societies. It further referred to the decision of the Hon'ble Supreme Court in the case of Mavilayi Service Co-op. Bank Ltd. 11. On a careful consideration, I find that the issue is squarely covered in favour of the assessee by the decision of the Hon'ble Supreme Court in the case of Mavilayi Service Co-op. Bank Ltd., 431 ITR 1. As it is a fact that assessee has not dealt with any other person than the persons of the society, there is no question of denying the benefit of the provisions of section 80P(2)(a)(i) of the Act to the assessee. Para 45 of that decis....
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.... and Ors. (supra) has construed section 80P widely and liberally, holding that if a society were to avail of several heads of deduction, and if it fell within any one head of deduction, it would be free from tax notwithstanding that the conditions of another head of deduction are not satisfied; (IV) This is for the reason that when the legislature wanted to restrict the deduction to a particular type of cooperative society, such as is evident from section 80P(2)(b) qua milk co-operative societies, the legislature expressly says so - which is not the case with section 80P(2)(a)(i); (V) That section 80P(4) is in the nature of a proviso to the main provision contained in section 80P(1) and (2). This proviso specifically exclu....
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....bsection (4) has been inserted to provide that the provisions of the said section shall not apply in relation to any cooperative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. The expressions 'co-operative bank', 'primary agricultural credit society' and 'primary co-operative agricultural and rural development bank' have also been defined to lend clarity to them." 38. A clarification by the CBDT, in a letter dated 09.05.2008, is also important, and states as follows: "Subject: Clarification regarding admissibility of deduction under section 80P of the Income Tax Act, 1961. xxx xxx xxx 2. In this regard, I have been directed to state that subsection(4....