TaxTMI 
TaxTMI 
2026 (2) TMI 568
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....ssessment Order passed u/s. 143(3) of the Income Tax Act by the Assessing Officer was dismissed. The Assessee is aggrieved with the same challenging the disallowance of deduction u/s. 80P(2)(a)(i) of Rs. 13,69,573/- received by the Assessee from activity of credit facilities to its member, the disallowance of deduction u/s. 80P(2)(d) of Rs. 1,08,890/-. Further, the disallowance of interest expenditure of Rs. 3,96,141/- and Rs. 63,795/- is also contested. 2. The brief facts of the case show that the Assessee is a co-operative society carrying on the banking facility to its members. It filed its return of income on 31.10.2017 wherein the gross total income of the Assessee is Rs. 13,69,573/- and the same was claimed as deduction u/s. 80P(2)....
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....the decision of the Hon'ble Karnataka High Court in case of Principal Commissioner of Income Tax v/s. Totgars Co-operative Sale Society Limited dated 16.06.2017.The Ld. Assessing Officer further found that Assessee has provided for provision of interest of Rs. 3,96,141/- and further Rs. 63,795/- which are also not allowable. 4. The Assessee submitted that despite it being registered under the Souhadra Act, it is eligible for deduction u/s. 80P of the Act. It does not deal with non-members, its claim of deduction u/s. 80P(2)(a)(i) of the Act and not u/s. 80P(2)(d) of the Act and therefore the Assessee must be allowed the deduction as claimed in the return of income. The Ld. Assessing Officer further found that Assessee has provided for pr....
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....refully considered the rival contentions and find that the order of Ld. CIT(A) was passed and received by the Assessee on 31.07.2024. However, the Appeal was filed on 05.09.2025 which has caused a delay of 341 days. The reason for the delay was stated that one Shri Ashok Kumar Shetty, Chartered Accountant who was looking after the income tax matter has registered himself on behalf of the Assessee on the income tax portal by obtaining login ID and a password. Subsequently, the Assessee discontinued the services from the above Chartered Accountant on 27.06.2024 and new Chartered Accountant Shri Jeevan Kumar Shetty was appointed. In all the correspondences, the email id of the old Chartered Accountant was provided and therefore all communicati....
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....ed by the Ld. Assessing Officer and therefore there is no violation of such notices. Accordingly, this ground of appeal is dismissed. 12. With respect to the disallowance of deduction u/s. 80P(2)(a)(i) of the Act, the Assessee has submitted a paper book containing 193 pages wherein he has relied on several judicial precedents and submitted that Assessee is entitled to deduction u/s. 80P(2)(a)(i) of the Act. 13. The Ld. Departmental Representative vehemently supported the orders of the Ld. lower authorities. 14. We have carefully considered the rival contention and perused the orders of the Ld. lower authorities. We find that Assessee provides credit facilities to its members as a member's credit co-operative society. Further, the A....
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....le Karnataka High Court also in case of Tumkur Merchants and Totgars sales wherein such deduction is allowed. Therefore, we direct the Ld. Assessing Officer to grant deduction to the Assessee u/s. 80P(2)(a)(i) of the Act and not u/s. 80P(2)(d) of the Act as it is not the claim of the Assessee. In view of this ground no. 1-5 of the Appeal are allowed. 16. Ground no. 6 is with respect to the disallowance of Rs. 3,96,141/-. This fact shows that this provision is made on the basis of the accounting policies followed by the Assessee regularly and also mandated by the Karnataka Co-operative Societies Act. The Assessee is undoubtedly maintaining the accounts on mercantile system basis. The above provision is based on the monthly working, as man....