TaxTMI 
TaxTMI 
2026 (6) TMI 93
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....e filed its return of income on 9 September 2017 at the gross total income of Rs. 1,874,805 and claimed deduction under section 80P(2) with regard to the profits and gains earned on advances to its members and other income earned by the cooperative society declaring Rs. Nil as total income. The case of the assessee was selected for scrutiny. The learned assessing officer disallowed the deduction under section 80P of the act stating that there are no restrictions on the assessee society about acceptance of deposits only from its members and further the membership of the society has been classified as nominal and permanent members. Further the assessee has earned the interest on deposits with other cooperative banks and cooperative societies which is not eligible for deduction in view of the decision of the honourable Supreme Court in case of Totgar's Co-operative Sale Society Ltd. v. ITO [2010] 322 ITR 283/188 Taxman 282 (SC), and in Principal Commissioner of Income-tax, Hubballi vs. Totagars Co-operative Sale Society [2017] 83 taxmann.com 140 (Karnataka)/[2017] 395 ITR 611 (Karnataka)/[2017] 297 CTR 158 (Karnataka)[16-06-2017]. Thus, the learned that assessing officer passed an....
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....ion of Commissioner of Customs Mumbai versus Dileep Kumar and Company (2018) 9 SCC (1) (FB) SC ) wherein it is held that any ambiguity in taxation provision, therefore is interpreted in favour of the assessee. But in a situation where the tax exemption must be interpreted, the benefit of doubt should go in favour of the revenue. He also rejected the argument of the assessee that the provisions of section 80P is a beneficial section and should be liberally interpreted. Accordingly appeal of the assessee was dismissed. 7. Coming to the appeal of the assessee for assessment year 2016 - 17 the fact shows that the learned CIT - A has not condoned the delay of 126 days in filing of the appeal. The assessee has given a reason that authorised representative for the tax matter for compliance of various Acts including the income tax act was engaged, that representative has left the job few months back, so the petitioner took little more time than usual to collect and organise the information and documents. Therefore, there was a delay in filing of the appeal. The learned CIT - A held that the above explanation given by the assessee lacks credibility. And therefore, delay was not condoned.....
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....thorities. Coming to the appeal for assessment year 2016 - 17 we find that that the appeal should have been filed before the learned CIT - A on or before 29th of April 2022 as the assessment order is passed on 30 March 2022 however the appeal was filed on 2 September 2022 whereby a delay of 126 days account. The reason for the delay was that assessee has one authorised representative who was providing the services of advice on the income tax matters. The representative has left the job few months back and it took the petitioner more time than the usual to collect and organise the information and documents. Therefore, there is a delay of 126 days. We find that the reason shown by the assessee is bona fides and resulted into unintentional delay. Absence of an authorised representative who was entrusted with the job, who has left the job and therefore to reorganise the claim of the assessee for filing appeal et cetera took some days. This is because the delay of 126 days. The delay cannot be said to be on a reasonable, unsubstantiated and in sufficient cause. Accordingly, we do not approve the order of the learned CIT - A in not condoning the delay in filing of the appeal for assessme....
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....duction are not satisfied; (IV) This is for the reason that when the legislature wanted to restrict the deduction to a particular type of co-operative 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 excludes only co-operative banks, which are cooperative societies who must possess a licence from the RBI to do banking business. Given the fact that the assessee in that case was not so licenced, the assessee would not fall within the mischief of section 80P(4). "34. Seventhly, section 80P(1)(c) also makes it clear that section 80P is concerned with the co-operative movement generally and, therefore, the moment a co-operative society is registered under the 1912 Act, or a State Act, and is engaged in activities which may be termed as residuary activities i.e. activities not covered by sub-clauses (a) and (b), either independently of or in addition to those activities, then profits and gains attributable to suc....
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.... credit facilities to its members only. Therefore, it fulfils the provisions of section 80P(2)(a)(i) of the act. The assessee's claim is also supported by the decision of the honourable Supreme Court as above wherein it has been held that the claim of the assessee is not hampered unless the assessee society deals with non-members. 16. On the issue of eligibility of deduction of bank interest under section 80P(2)(a)(i) of the act we find that the interest income earned by the society is also attributable to such activities. The law provides that in such case whole of the number of profits and gains of business is required to be granted as deduction. It is not the case that the interest income earned by the assessee society is not profit attributable to the business of the credit cooperative society. This issue is also squarely covered in favour of the assessee by the decision of the honourable Karnataka High Court in case of Principal Commissioner of Income-tax, Hubli vs. Totagars Co-operative Sale Society [2017] 78 taxmann.com 169 (Karnataka)/[2017] 392 ITR 74 (Karnataka)[05-01-2017] and Tumkur Merchants Souharda Credit Cooperative Ltd. vs. Income-tax officer Word-V, Tumkur [201....