M/s.Pangode Service Co-op Bank Ltd, Trivandrum V. The ITO, Trivandrum

ITA 685/COCH/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9735 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-01-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 28-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRITHUNJAYA SHARMA
• Keywords: Application of stay; Competent authority; Right to appeal; Set aside
• Section: 143(3); 80P; 250; 201; 154; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJARI, AM & SHRI GEORGE GEORGE K, JM ITA NO. 685 /COCH/201 9 : ASST.YEAR 2011 - 2012 SA NO.11 8 /COCH/2019 : ASST.YEAR 2011 - 2012 M/S. PANGODE SERVICE CO - OPERATIVE BANK LIMITED, C/O.VIJAYARAGHAVAN & DEVI ADVOCATES, HIGH COURT ROAD KOCHI 682 031. PAN : AACAP2464Q . VS. THE INCOME TAX OFFICER WARD 2(3) THIRUVANANTHAPURAM. (APPELLANT / APPLICANT ) (RESPONDENT) ITA NO. 686 /COCH/201 9 : ASST.YEAR 201 1 - 201 2 SA NO.11 9 /COCH/2019 : ASST.YEAR 201 1 - 201 2 M/S. ANDOORKONAM SERVICE CO - OPERATIVE BANK LIMITED, C/O.VIJAYARAGHAVAN & DEVI ADVOCATES, HIGH COURT ROAD KOCHI 682 031. PAN : AAAAA5990N . VS. THE INCOME TAX OFFICER WARD 2( 1 ) THIRUVANANTHAPURAM. (APPELLANT / APPLICANT ) (RESPONDENT) ITA NO. 665 /COCH/201 9 : ASST.YEAR 2008 - 2009 ITA NO. 666 /COCH/201 9 : ASST.YEAR 2012 - 2013 ITA NO. 667 /COCH/201 9 : ASST.YEAR 2014 - 2015 ITA NO. 668 /COCH/201 9 : ASST.YEAR 2015 - 2016 SA NO.1 06 /COCH/2019 : ASST.YEAR 2008 - 2009 SA NO. 107 /COCH/201 9 : ASST.YEAR 2012 - 2013 SA NO. 108 /COCH/201 9 : ASST.YEAR 2014 - 2015 SA NO. 109 /COCH/201 9 : ASST.YEAR 2015 - 2016 M/S. VARKALA SERVICE CO - OPERATIVE BANK LIMITED, C/O.VIJAYARAGHAVAN & DEVI ADVOCATES, HIGH COURT ROAD KOCHI 682 031. PAN : AAAAV3016G . VS. THE INCOME TAX OFFICER WARD 2( 3 ) THIRUVANANTHAPURAM. (APPELLANT / APPLICANT ) (RESPONDENT) ASSESSEE BY : SRI.SANTHOSH P.ABRAHAM REVENUE BY : SRI.MRITHUNJAYA SHARMA , SR.DR DATE OF HEARING : 06.01.2020 DATE OF PRONOUNCEMENT : 07 .01.2020 ITA NO. 685 / COCH /201 9 & ORS. SA NO.11 8 /COCH/2019 & ORS. M/S. PANGODE SERVICE CO - OP BANK LTD & ORS. 2 O R D E R PER GEORGE GEORGE K, JM : THESE APPEALS AT THE INSTANCE OF DIFFERENT ASSESSEE S, ARE DIRECTED AGAINST VARIOUS ORDERS OF THE CIT(A) , PASSED U/S 154 R.W.S. 250 OF THE INCOME - TAX ACT. THE ASSESSEE HAS ALSO PREFERRED STAY APPLICATIONS SEEKING TO STAY THE RECOVERY OF OUTSTANDING TAX ARREARS. 2. THE BRIEF FACTS OF THE CASE ARE AS FOLLOW: THE ASSESSEE S ARE A CO - OPERATIVE SOCIETIES REGISTERED UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT, 1969. FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, THE RETURNS OF INCOME WERE F ILED DECLARING INCOME OF RS.NIL, AFTER CLAIMING DEDUCTION U/S 80P OF THE I.T.ACT. THE ASSESSING OFFICER PASSED ORDERS U/S 143(3) OF THE I.T.ACT, DISALLOWING THE CLAIM OF DEDUCTION U/S 80P OF THE I.T.ACT. THE REASONING OF THE ASSESSING OFFICER TO DISALLOW T HE CLAIM OF DEDUCTION U/S 80P(2) OF THE I.T.ACT WAS THAT THE ASSESSEE WAS DOING THE BUSINESS OF BANKING, AND THEREFORE, IN VIEW OF INSERTION OF SECTION 80P(4) OF THE I.T.ACT WITH EFFECT FROM 01.04.2007, THE ASSESSEE WILL NOT BE ENTITLED TO THE DEDUCTION U/ S 80P(2) OF THE I.T.ACT. THE ASSESSING OFFICER ALSO DISALLOWED THE CLAIM OF DEDUCTION WITH REGARD TO INTEREST INCOME RECEIVED BY THE ASSESSEE S ON INVESTMENTS MADE WITH DISTRICT CO - OPERATIVE BANKS. 3. AGGRIEVED BY THE ORDERS OF ASSESSMENT DENYING THE CLAI M OF DEDUCTION U/S 80P(2) OF THE I.T.ACT, THE ASSESSEE S PREFERRED APPEALS TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) ALLOWED THE ITA NO. 685 / COCH /201 9 & ORS. SA NO.11 8 /COCH/2019 & ORS. M/S. PANGODE SERVICE CO - OP BANK LTD & ORS. 3 APPEALS BY HOLDING THAT THE ASSESSEE S WERE ELIGIBLE FOR DEDUCTION U/S 80P OF THE I.T.ACT. THE INTEREST INCOME RECEIVED FROM O THER BANKS AND TREASURY ALSO WAS ALLOWED AS DEDUCTION U/S 80P(2)(A)(I) OF THE I.T.ACT. IN ALLOWING THE APPEALS OF THE ASSESSEE S , THE CIT(A) FOLLOWED THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE CO - OPERATIVE BANK LTD. V. CIT [(2016) 384 ITR 490 (KER.). 4. SUBSEQUENTLY, THE CIT(A) ISSUED NOTICES U/S 154 OF THE I.T.ACT PROPOSING TO RECTIFY HIS ORDERS PASSED, IN VIEW OF THE SUBSEQUENT JUDGMENT OF THE FULL BENCH OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LTD. V. CIT [ITA NO.97/2016 ORDER DATED 19 TH MARCH, 2019]. THE ASSESSEE OBJECTED TO THE ISSUANCE OF NOTICES. HOWEVER, THE CIT(A) REJECTED THE OBJECTIONS RAISED BY THE ASSESSEE S AND PASSED ORDERS U/S 154 OF THE I.T.ACT, DISALLOWING THE CLAIM OF THE ASSESSEE S U/S 80P(2) OF THE I.T.ACT. 5. AGGRIEVED BY THE ORDERS OF THE CIT(A), THE ASSESSEE S HAVE FILED THESE APPEALS BEFORE THE TRIBUNAL RAISING THE FOLLOWING IDENTICAL GROUNDS: - A. THE ORDERS OF THE ASSESSING OFFICER AS WELL AS THE APPELLATE AUTHORITY PASSED U/S 154 OF THE ACT TO THE EXTENT OF OBJECTIONS MADE HEREIN AFTER, ARE AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND IS OPPOSED TO THE PROVISIONS OF LAW. B. THE AUTHORITY BELOW WENT WRONG IN INITIATING PROCEEDINGS U/S 154 ON THE BASIS OF THE SUBSEQUENT DECISION ITA NO. 685 / COCH /201 9 & ORS. SA NO.11 8 /COCH/2019 & ORS. M/S. PANGODE SERVICE CO - OP BANK LTD & ORS. 4 OF THE JURISDICTION OF THE HIGH COURT. THE APPELLATE AUTHORITY HAD INVOKED THE JURISDICTION U/S 154 DISREGARDING THE FACT THAT THE DEPARTMENT HAVE THE RIGHT OF APPEAL AGAINST THE ORDER PASSED U/S 250, AND WITHOUT VERIFYING WHETHER THE D EPARTMENT HAD FILED AN APPEAL AGAINST THE ORDER. C. THE APPELLATE AUTHORITY DID NOT PROPERLY CONSIDERED THE ISSUE RAISED BEFORE HIM REGARDING THE DISALLOWANCE OF THE EXEMPTION CLAIMED U/S 80P, WHILE PASSING THE ORDER U/S 154. D. THE AUTHORITIES BEL OW WENT WRONG IN DISALLOWING THE CERTIFICATE ISSUED BY THE STATUTORY AUTHORITY UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT. E. THE APPELLATE AUTHORITY OUGHT TO HAVE CONSIDERED THE CLAIM OF THE APPELLANT U/S 80P AND THE REASONING GIVEN BY THEM, MISINTERPRE TING THE PROVISIONS OF SEC. 80P( 4 ) AND ITS EXPLANATION IS OPPOSED TO THE FACTS AND LAW. THE RESTRICTIVE PROVISION UNDER BANKING REGULATION ACT IS NO WAY APPLICABLE TO THE FACTS OF THE CASE AND THE AUTHORITIES BELOW OUGHT NOT TO HAVE REJECTED THE CLAIM OF THE APPELLANT ON UNSUSTAINABLE GROUNDS. F. THE AUTHORITIES BELOW SHOULD HAVE STATE COGENT REASONS FOR DISCREDITING THE CLASSIFICATION CERTIFICATE ISSUED BY THE STATUTORY AUTHORITY. THE CLASSIFICATION IS ISSUED BY THE STATUTORY AUTHORITY ON THE BASIS OF T HE PRINCIPAL OBJECT PROVIDED IN THE BYE - LAWS. IF THERE IS ANY VIOLATION REGARDING THE SAME CLASSIFICATION WILL BE CHANGED . THE PRINCIPLE OBJECT OF THE APPELLANT IS TO UNDERTAKE AGRICULTURAL CREDIT ACTIVITIES AND PROVIDED LOANS AND ADVANCES FOR AGRICULTURAL PURPOSES. G. WITHOUT PREJUDICE TO THE ARGUMENTS STATED ABOVE, THE APPELLANT IS A MEMBERS CO - OPERATIVE SOCIETY AND ARE ONLY DOING THE TRADING ACTIVITIES WITH ITS MEMBERS AND THE LEARNED ASSESSING OFFICER HAS NOT MADE ANY CONTENTION THAT THE SOCIETY IS D OING TRADING ACTIVITIES WITH NON MEMBERS. SINCE THE TRADING ACTIVITIES ARE WITH MEMBERS ALONE ANY INCOME DERIVED FROM THE ACTIVITIES ARE EXEMPT UNDER MUTUALITY CONCEPT AND THE DEDUCTION U/S 80P IS NOT REQUIRED FOR SUCH INCOME. THE LEARNED ASSESSING OFFICER HAS NOT CONSIDERED THE SAME WHILE MAKING THE ADDITIONS. H. THE ASSESSING AUTHORITY AS WELL AS THE APPELLATE AUTHORITY WENT WRONG IN FINDING THAT DEDUCTION CLAIMED U/S 80 P{2} OF THE IT ACT, FOR WHICH A PARTY DOES NOT TAKE IN INTEREST EARNED ON DEPOSITS MADE WITH DISTRICT CO - OPERATIVE BANK . AS PER SECTION 80P(2) DEDUCTION IS AVAILABLE IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY ITA NO. 685 / COCH /201 9 & ORS. SA NO.11 8 /COCH/2019 & ORS. M/S. PANGODE SERVICE CO - OP BANK LTD & ORS. 5 THE CO - OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO - OPERATIVE BANK BEING A C ENTRAL SOCIETY AS DEFINED U/S 2(D) OF THE KCS ACT, THE AUTHORITIES BELOW COMMITTED A GROSS MISTAKE IN HOLDING THAT DISTRICT CO - OPERATIVE BANK IS NOT A CO - OPERATIVE SOCIETY AS ENVISAGED U/S 80P(2) . I. WITHOUT PREJUDICE TO THE ABOVE GROUNDS IT IS RESPECTFULLY SUBMITTED T HAT EVEN THOUGH THE AUTHORITY BELOW RELIED ON THE DECISION OF THE HIGH COURT OF KERALA ( FULL BENCH ) IN THE CASE OF MAVILAYIL SERVICE CO - OPERATIVE BANK LTD., DID NOT FOLLOWED THE DIRECTIONS IN THE DECISION REGARDING THE DETERMINATION OF THE CLASSIFICATION. FOR THE REASONS STATED IN THE ABOVE AND ALSO THE GROUNDS URGED AT THE TIME OF FINAL HEARING, IT IS JUST AND NECESSARY TO SET ASIDE THE ANNEXURE A1 ASSESSMENT ORDER AS WELL AS ANNEXURE A3 ORDER IN APPEAL TO THE EXTENT OF OBJECTIONS MADE HEREIN ABOVE. 6. THE LEARNED AR RELIED ON THE GROUNDS RAISED. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, STRONGLY SUPPORTED THE ORDERS OF THE INCOME - TAX AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE CO - OPERATIVE BANK LTD. V. CIT [(2016) 384 ITR 490 (KER.)] HAD HELD THAT WHEN A CERTIFICATE HAS BEEN ISSUED TO AN ASSESSEE BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES CHARACTERIZING IT AS PRIMARY AGRICULTURAL CREDIT SOCIETY, NECESSARILY, THE DEDUCTION U/S 80P(2) OF THE I.T.ACT HAS TO BE GRANTED TO THE ASSESSEE. HOWEVER, THE FULL BENCH OF THE HONBLE KERALA HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LTD. V. CIT (SUPRA) HAD REVERSED THE ABOVE FINDINGS OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICE CO - OPERATIVE CO - OPERATIVE BANK LTD. V. CIT (SUPRA) . THE LARGER BENCH OF THE ITA NO. 685 / COCH /201 9 & ORS. SA NO.11 8 /COCH/2019 & ORS. M/S. PANGODE SERVICE CO - OP BANK LTD & ORS. 6 HONBLE KERALA HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LT D. V. CIT (SUPRA) HELD THAT THE ASSESSING OFFICER HAS TO CONDUCT AN INQUIRY INTO THE FACTUAL SITUATION AS TO THE ACTIVITIES OF THE ASSESSEE SOCIETY TO DETERMINE THE ELIGIBILITY OF DEDUCTION U/S 80P OF THE I.T.ACT. IT WAS HELD BY THE HONBLE HIGH COURT THAT THE ASSESSING OFFICER IS NOT BOUND BY THE REGISTRATION CERTIFICATE ISSUED BY THE REGISTRAR OF KERALA CO - OPERATIVE SOCIETY CLASSIFYING THE ASSESSEE - SOCIETY AS A CO - OPERATIVE SOCIETY. THE HONBLE HIGH COURT HELD THAT EACH ASSESSMENT YEAR IS SEPARATE AND ELI GIBILITY SHALL BE VERIFIED BY THE ASSESSING OFFICER FOR EACH OF THE ASSESSMENT YEARS. THE FINDING OF THE LARGER BENCH OF THE HONBLE HIGH COURT READS AS FOLLOWS: - 33. IN VIEW OF THE LAW LAID DOWN BY THE APEX COURT IN CITIZEN CO - OPERATIVE SOCIETY [397 ITR 1] IT CANNOT BE CONTENDED THAT, WHILE CONSIDERING THE CLAIM MADE BY AN ASSESSEE SOCIETY FOR DEDUCTION UNDER SECTION 80P OF THE IT ACT, AFTER THE INTRODUCTION OF SUB - SEC TION (4) THEREOF, THE ASSESSING OFFICER HAS TO EXTEND THE BENEFITS AVAILABLE, MERELY LOOKING AT THE CLASS OF THE SOCIETY AS PER THE CERTIFICATE OF REGISTRATION ISSUED UNDER THE CENTRAL OR STATE CO - OPERATIVE SOCIETIES ACT AND THE RULES MADE THEREUNDER. ON S UCH A CLAIM FOR DEDUCTION UNDER SECTION 80P OF THE IT ACT, THE ASSESSING OFFICER HAS TO CONDUCT AN ENQUIRY INTO THE FACTUAL SITUATION AS TO THE ACTIVITIES OF THE ASSESSEE SOCIETY AND ARRIVE AT A CONCLUSION WHETHER BENEFITS CAN BE EXTENDED OR NOT IN THE LIG HT OF THE PROVISIONS UNDER SUB - SECTION (4) OF SECTION 80P. 33. IN CHIRAKKAL [384 ITR 490] THE DIVISION BENCH HELD THAT THE APPELLANT SOCIETIES HAVING BEEN CLASSIFIED AS PRIMARY AGRICULTURAL CREDIT SOCIETIES BY THE COMPETENT AUTHORITY UNDER THE KCS ACT, I T HAS NECESSARILY TO BE HELD THAT THE PRINCIPAL OBJECT OF SUCH SOCIETIES IS TO UNDERTAKE AGRICULTURAL CREDIT ACTIVITIES AND TO PROVIDE LOANS AND ADVANCES FOR AGRICULTURAL PURPOSES, THE RATE OF INTEREST ON SUCH LOANS AND ADVANCES TO BE AT THE RATE TO BE FIX ED BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES UNDER THE KCS ACT AND ITA NO. 685 / COCH /201 9 & ORS. SA NO.11 8 /COCH/2019 & ORS. M/S. PANGODE SERVICE CO - OP BANK LTD & ORS. 7 HAVING ITS AREA OF OPERATION CONFINED TO A VILLAGE, PANCHAYAT OR A MUNICIPALITY AND AS SUCH, THEY ARE ENTITLED FOR THE BENEFIT OF SUB - SECTION (4) OF SECTION 80P OF THE IT ACT TO EASE THEMS ELVES OUT FROM THE COVERAGE OF SECTION 80P AND THAT, THE AUTHORITIES UNDER THE IT ACT CANNOT PROBE INTO ANY ISSUES OR SUCH MATTERS RELATING TO SUCH SOCIETIES AND THAT, PRIMARY AGRICULTURAL CREDIT SOCIETIES REGISTERED AS SUCH UNDER THE KCS ACT AND CLASSIFIE D SO, UNDER THE ACT, INCLUDING THE APPELLANTS ARE ENTITLED TO SUCH EXEMPTION. 34. IN CHIRAKKAL [384 ITR 490] THE DIVISION BENCH EXPRESSED A DIVERGENT OPINION, WITHOUT NOTICING THE LAW LAID DOWN IN ANTONY PATTUKULANGARA [2012 (3) KHC 726] AND PERINTHALMAN NA [363 ITR 268]. MOREOVER, THE LAW LAID DOWN BY THE DIVISION BENCH IN CHIRAKKAL [384 ITR 490] IS NOT GOOD LAW, SINCE, IN VIEW OF THE LAW LAID DOWN BY THE APEX COURT IN CITIZEN CO - OPERATIVE SOCIETY [397 ITR 1], ON A CLAIM FOR DEDUCTION UNDER SECTION 80P OF THE INCOME TAX ACT, BY REASON OF SUB - SECTION (4) THEREOF, THE ASSESSING OFFICER HAS TO CONDUCT AN ENQUIRY INTO THE FACTUAL SITUATION AS TO THE ACTIVITIES OF THE ASSESSEE SOCIETY AND ARRIVE AT A CONCLUSION WHETHER BENEFITS CAN BE EXTENDED OR NOT IN THE LIG HT OF THE PROVISIONS UNDER SUB - SECTION (4) OF SECTION 80P OF THE IT ACT. IN VIEW OF THE LAW LAID DOWN BY THE APEX COURT IN CITIZEN CO - OPERATIVE SOCIETY [397 ITR 1] THE LAW LAID DOWN BY THE DIVISION BENCH PERINTHALMANNA [363 ITR 268] HAS TO BE AFFIRMED AND WE DO SO. 35. IN VIEW OF THE LAW LAID DOWN BY THE APEX COURT IN ACE MULTI AXES SYSTEMS CASE (SUPRA), SINCE EACH ASSESSMENT YEAR IS A SEPARATE UNIT, THE INTENTION OF THE LEGISLATURE IS IN NO MANNER DEFEATED BY NOT ALLOWING DEDUCTION UNDER SECTION 80P OF THE IT ACT, BY REASON OF SUB - SECTION (4) THEREOF, IF THE ASSESSEE SOCIETY CEASES TO BE THE SPECIFIED CLASS OF SOCIETIES FOR WHICH THE DEDUCTION IS PROVIDED, EVEN IF IT WAS ELIGIBLE IN THE INITIAL YEARS. 7.1 THE CIT(A) HAD INITIALLY ALLOWED THE APPEALS OF THE ASSESSEE S AND GRANTED DEDUCTION U/S 80P(2) OF THE I.T.ACT. SUBSEQUENTLY, THE CIT(A) PASSED ORDER U/S 154 OF THE I.T.ACT, WHEREIN THE CLAIM OF DEDUCTION U/S 80P OF THE I.T.ACT WAS DENIED, BY RELYING ON THE JUDGMENT OF THE LARGER BENCH OF THE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LTD. V. CIT (SUPRA). THE CIT(A) OUGHT ITA NO. 685 / COCH /201 9 & ORS. SA NO.11 8 /COCH/2019 & ORS. M/S. PANGODE SERVICE CO - OP BANK LTD & ORS. 8 NOT TO HAVE REJECTED THE CLAIM OF DEDUCTION U/S 80P(2) OF THE I.T.ACT WITHOUT EXAMINING THE ACTIVITIES OF THE ASSESSEE - SOCIETY. THE FULL BEN CH OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LTD. V. CIT (SUPRA) HAD HELD THAT THE A.O. HAS TO CONDUCT AN INQUIRY INTO THE FACTUAL SITUATION AS TO THE ACTIVITIES OF THE ASSESSEE SOCIETY TO DETERMINE THE ELIGIBILITY OF DEDUCTION U/S 80P OF THE I.T.ACT. IN VIEW OF THE DICTUM LAID DOWN BY THE FULL BENCH OF THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA), WE RESTORE THE ISSUE OF DEDUCTION U/S 80P(2) TO THE FILES OF THE ASSESSING OFFICER. THE ASSESSING OFFICER S HALL EXAMINE THE ACTIVITIES OF THE ASSESSEE S AND DETERMINE WHETHER THE ACTIVITIES ARE IN COMPLIANCE WITH THE ACTIVITIES OF A CO - OPERATIVE SOCIETY FUNCTIONING UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT, 1969 AND ACCORDINGLY GRANT DEDUCTION U/S 80P(2) OF TH E I.T.ACT. 7.2 AS REGARDS THE INTEREST ON THE INVESTMENTS WITH CO - OPERATIVE BANKS AND OTHER BANKS, THE CO - ORDINATE BENCH ORDER OF THE TRIBUNAL IN THE CASE OF KIZHATHADIYOOR SERVICE CO - OPERATIVE BANK LIMITED IN ITA NO.525/COCH/2014 (ORDER DATED 20.07.2016) , HAD HELD THAT INTEREST INCOME EARNED FROM INVESTMENTS WITH TREASURIES AND BANKS IS PART OF BANKING ACTIVITY OF THE ASSESSEE S , AND THEREFORE, THE SAID INTEREST INCOME WAS ELIGIBLE TO BE ASSESSED AS `INCOME FROM BUSINESS INSTEAD OF `INCOME FROM OTHER SOURCES. HOWEVER, AS REGARDS THE GRANT OF DEDUCTION U/S 80P OF THE I.T.ACT ON SUCH INTEREST INCOME, THE ASSESSING OFFICER SHALL F OLLOW THE LAW LAID DOWN ITA NO. 685 / COCH /201 9 & ORS. SA NO.11 8 /COCH/2019 & ORS. M/S. PANGODE SERVICE CO - OP BANK LTD & ORS. 9 BY THE LARGER BENCH OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF THE MAVILAYI SERVICE CO - OPERATIVE BANK LTD. V. CIT (SUPRA) AND EXAMINE THE AC TIVITIES OF THE ASSESSEE - SOCIETIES BEFORE GRANTING DEDUCTION U/S 80P OF THE I. T.ACT ON SUCH INTEREST INCOME. IT IS ORDERED ACCORDINGLY. 8. SINCE WE HAVE DISPOSED OF THE APPEALS FILED BY THE ASSESSEE S , THE STAY APPLICATIONS FILED BY THE ASSESSEE S BECOME INFRUCTUOUS AND THE SAME ARE DISMISSED AS SUCH. 9 . IN THE RESULT, THE APPEAL S FILED BY THE ASSESSEE S ARE ALLOWED FOR STATISTICAL PURPOSES AND THE STAY APPLICATIONS ARE DISMISSED. ORDER PRONOUNCED ON THIS 07 TH DAY OF JANUARY, 2020 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN ; DATED : 07 TH JANUARY, 2020 . DEV A DAS G * COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A) , THIRUVANANTHAPURAM. 4. THE PR.CIT , THIRUVANANTHAPURAM . 5. DR, ITAT, COCHIN 6. GUARD FILE.