AZHIYUR SERVICE COOPERATIVE BANK LIMITED,KOZHIKODE V. ITO WARD 2(2), KOZHIKODE

ITA 566/COCH/2025

AI Insights

The case involves Azhiyur Service Cooperative Bank Ltd., a cooperative society registered under the Kerala Cooperative Societies Act, 1969, which appealed against the order of the Additional/Joint Commissioner of Income Tax (Appeals)-1, Nashik. The society had filed a return for the Assessment Year 2014-15 claiming nil income after deductions under section 80P of the Income Tax Act, 1961. The Income Tax Officer (ITO) denied these deductions based on a judgment by the Kerala High Court, which was contested in the appeal. The Tribunal, after considering the arguments and relevant legal provisions, particularly section 80P and its sub-sections, along with the Supreme Court's decision in a similar case, ruled in favor of the appellant, allowing the deduction under section 80P.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772052 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2014-2015
• Other Referred Cases: Mavilayi Service Co-Operative Bank Ltd. v. CIT (2021) 431 ITR 01, The Chirakkal Service Cooperative Bank Ltd. & Others in ITA No. 212/2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH:: COCHIN BEFORE SHRI INTURI RAMA RAO, AM ITA No. 566/Coch/2025 Assessment Year: 2014-15 Azhiyur Service Cooperative .......... Appellant Bank Ltd. No.7893, 11/269B, Azhiyur, Vadakara, Kozhikode, [PAN: AAVFA 0167 H] vs. Income Tax Officer, .......... Respondent Ward-2(2), Kozhikode. Appellant by: None Respondent by: Smt. Leena Lal, Sr. DR Date of Hearing: 21.08.2025 Date of Pronouncement: 25.08.2025 O R D E R This is an appeal filed by the assessee directed against the order passed by the Additional/Joint Commissioner of Income Tax (Appeals)-1, Nashik [for short, ‘Ld. CIT(A)] dated 07.07.2025 u/s.250 of the Income Tax Act, 1961 (for short, 'the Act') for Assessment Year (AY) 2014-15. 2. Brief facts of the case are that appellant is a cooperative society registered under Kerala Co-operative Societies Act, 1969. It is classified as primary agricultural credit cooperative society. It is engaged in the business of accepting deposits from member and providing credit facilities to its member. The return of income for the A.Y. 2014-15 was filed on 21/12/2016 disclosing nil income Printed from counselvise.com 2 ITA No. 566/Coch/2025 (Azhiyur Service Co-op. Bank Ltd.) after claiming deduction under section 80P of the Act. Against the said return of income, the assessment was completed by the ITO, Ward-2(2), Kozhikode (for short, ‘AO’) vide order dated 21/12/2016 passed under section 143(3) of the Act at a total income of Rs. 16,19,169/-. While doing so, the AO denied the deduction claimed under section 80P of the Act following the Full Court judgment of the Hon'ble Kerala High Court in the case of The Chirakkal Service Cooperative Bank Ltd. & Others in ITA No. 212/2013, dt.15/02/2016. 3. Being aggrieved by the above assessment order, an appeal was filed by the appellant before the Ld. CIT(A), who vide impugned order dismissed the appeal placing reliance on the provisions of sub- section (4) of section 80P of the Act. 4. Aggrieved by the order of Ld. CIT(A), the Assessee is in appeal before this Tribunal. 5. When appeal was calledon for hearing, none appeared on behalf of the appellant despite due service of notice of hearing. After hearing ld.Sr.DR, I proceed to dispose of the appeal on merits. 6. I have heard ld. DR and perused the material on record. The solitary issuethat arises for my consideration is that whether the appellant society is eligible for deduction claimed under section 80P of the Act or not. The appellant is a cooperative society, duly registered under the Kerala Cooperative Society Act, 1969. It is classified as Primary Agricultural Credit Cooperative Society and it Printed from counselvise.com 3 ITA No. 566/Coch/2025 (Azhiyur Service Co-op. Bank Ltd.) does not enjoy any banking licence. Therefore, the provisions of sub-section (4) of section 80P have no application to the appellant society. The ratio laid down by the Hon'ble Supreme Court in the case of Mavilayi Service Co-Operative Bank Ltd. v. CIT (2021) 431 ITR 01 is squarely applicable to the facts of the present case. Therefore, I direct the AO to allow deduction claimed by the Assessee under section 80P of the Act. Thus, the grounds raised by the appellant stand allowed. 7. In the result, appeal filed by the appellant stands allowed. Order pronounced in open Court on 25th August, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 25th August, 2025 vr/- Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin Printed from counselvise.com "