CHEEKKILODE SERVICE CO-OP BANK LTD,KOZHIKODE V. ITO, WARD-2(3), KOZHIKODE

ITA 15/COCH/2025

AI Insights

The case involves the Cheekkilode Service Co-operative Bank Limited, which appealed against the order of the National Faceless Assessment Centre / Commissioner of Income-tax (Appeals) concerning the assessment year 2015-2016. The primary issue was the denial of deduction under section 80P of the Income Tax Act, 1961, which the bank claimed for interest income from other co-operative banks. The Assessing Officer had initially denied this claim, categorizing the bank as a co-operative bank and not a society eligible for such deductions. The CIT(A) upheld this decision but allowed the deduction for business income under section 80P(2)(a)(i). The Tribunal dismissed the appeal, agreeing with the CIT(A)'s decision to remand the matter to verify the source of the interest income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33544 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Other Referred Cases: PCIT v. Peroorkada Service Co-operative Bank Ltd. and Vilappil Service Co-operative Bank Ltd. 442 ITR 141 (Ker.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL; SENIOR
• Keywords: Set aside; Business income

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member ITA No.15/Coch/2025 : Asst.Year 2015-2016 Cheekkilode Service Co- operative Bank Limited No.F.449 Cheekkilode, Atholi Kozhikode – 673 315. PAN : AAAAC8251E. v. The Income Tax Officer Ward 2(3) Kozhikode. (Appellant) (Respondent) Appellant by : --- None --- Respondent by : Smt.Leena Lal, Senior AR Date of Hearing : 10.02.2025 Date of Pronouncement : 13.02.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Assessment Centre / Commissioner of Income- tax (Appeals) [“CIT(A)” for short] dated 13.11.2024 having DIN & Order No.ITBA/NFAC/S/250/2024-25/1070301103(1) for the assessment year 2015-2016. 2. Briefly the facts of the case are that the assessee is a co-operative society registered under the Kerala State Co-operative Societies Act and classified as a primary agricultural credit society. The return of income for the assessment year 2015-2016 was filed on 30th August, 2016 disclosing `Nil’ income. Against the said return of income, the assessment was completed by the Assessing Officer (“the AO” hereinafter) vide order dated 29.12.2017 passed u/s.143(3) of the ITA No.15/Coch/2025. Cheekkilode SCB Limited. 2 Income-tax Act, 1961 (“the Act” hereinafter) at a total income of Rs.25,26,700 denying the claim of deduction u/s.80P of the Act by holding that the assessee is a co-operative bank. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order, confirmed the order of the AO by holding that the interest earned on the surplus funds shall be considered as taxable under the head income from other sources. While upholding that the assessee- society is eligible for deduction u/s.80P(2)(a)(i) of the Act in respect of business income, however, directed the AO to set aside the issue of allowability of interest income earned from other co-operative societies u/s.80P(2)(d) of the Act. 4. Being aggrieved, the assessee is in appeal before me, in the present appeal. 5. When the case was called upon, none appeared on behalf of the assessee despite due service of notice. Therefore, I proceed to dispose of the appeal on merits after hearing the learned Senior DR. 6. I have heard the learned Senior DR and perused the material available on record. From the statement of facts filed before the CIT(A), it is evident that the assessee-society claimed deduction u/s.80P(2)(d) of the Act of Rs.25,26,700 being interest earned from other co-operative banks. This issue is no more res integra as the issue is settled by the Hon’ble Kerala High Court in the case of PCIT v. Peroorkada Service Co-operative Bank Ltd. and Vilappil Service Co-operative Bank Ltd. 442 ITR 141 (Ker.). The CIT(A) also took a similar view, ITA No.15/Coch/2025. Cheekkilode SCB Limited. 3 however, in the absence of the material on record showing that the assessee-society earned interest income from other co-operative banks. Therefore, the matter was set aside by the CIT(A) to the file of the AO for due verification. I do not find any illegality or perversity in the findings of the CIT(A) in remanding the matter to the file of the AO for due verification whether the assessee-society had received interest income from other co-operative banks or not. In view of the above, I do not find merit in the appeal filed by the assessee and the same is accordingly dismissed. 8. In the result, the appeal filed by the assessee is dismissed. Order pronounced on this 13th day of February, 2025. Sd/- (Inturi Rama Rao) ACCOUNTANT MEMBER Cochin; Dated : 13th February, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "