PERUVEMBA SAHAKARANA URBAN CREDIT SOCIETY,PRUVEMBA V. INCOME TAX OFFICER WARD-2, PALAKKAD

ITA 366/COCH/2024

AI Insights

The case involves the Peruvemba Sahakarana Urban Credit Society, a primary agricultural credit co-operative society, which appealed against the order of the National Faceless Appeal Centre, Delhi, for the Assessment Year 2016-17. The society had filed a return declaring nil income after claiming a deduction under section 80P of the Income Tax Act, 1961. The Assessing Officer denied this deduction, citing a Supreme Court decision that influenced the interpretation of 'primary agricultural co-operative society'. The Tribunal's decision reversed the lower authorities' ruling, aligning with a more recent Supreme Court judgment that supported the society's claim for deduction under section 80P(2)(a)(i).

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474690 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 25-04-2024
• Other Referred Cases: The Citizen Co-operative Society Ltd. v. Asst. CIT [2017] 397 ITR 1 (SC), Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 431 ITR 1 (SC), UP Cooperative Cane Unions' Federation Ltd. 11 SCC 287
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: NOME
• Section: 80P

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member ITA No. 366/Coch/2024 (Assessment Year: 2016-17) Peruvemba Sahakarana Urban Credit Society Peruvemba P.O. Palakkad 678531 [PAN: AAEAP1940M] vs. The Income Tax Officer-2 Aayakar Bhavan English Church Road Palakkad 678014 (Appellant) (Respondent) Appellant by: ------- Nome ------- Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 29.10.2024 Date of Pronouncement: 18.11.2024 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 26.02.2024 for Assessment Year (AY) 2016-17. 2. Brief facts of the case are that the assessee is a primary agricultural credit co- operative society registered under the Kerala Co-operative Societies Act. The return of income for AY 2016-17 was filed on 10.03.2018 declaring Nil income after claiming deduction of Rs. 30,82,959/- u/s. 80P of the Income Tax Act, 1961 (the Act). Against the said return of income, assessment was completed by the Assessing Officer (AO) vide order dated 26.12.2018. While doing so the AO had denied exemption u/s. 80P(2)(a)(i) of the Act by holding that the assessee is not a primary agricultural co-operative society, as it also provides credit facilities to nominal 2 ITA No. 366/Coch/2024 Peruvemba Sahakarana Urban Credit Society members who are classified as class B and class C members and placing reliance on the decision of the Hon'ble Supreme Court in the case of The Citizen Co-operative Society Ltd. v. Asst. CIT [2017] 397 ITR 1 (SC). 3. Being aggrieved, an appeal was filed before the CIT(A) who vide the impugned order confirmed the action of the AO. 4. Being aggrieved, the assessee is in appeal before the Tribunal. The solitary issue that arises in both the appeals is where the lower authorities were justified in denying deduction u/s. 80P(2)(a)(i) of the Act solely on the ground that the assessee co-operative society also provided credit facilities to nominal members. The issue in the appeal is no more res integra as it is settled by the Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 431 ITR 1 (SC) after making a reference to its earlier judgement in the case of UP Cooperative Cane Unions’ Federation Ltd. 11 SCC 287 wherein it is held that the expression “member” includes nominal members under the Kerala Cooperative Societies Act and therefore it was held that denial of exemption u/s. 80P(2)(a)(i) of the Act is unjustified solely on the ground that the assessee society also provides loans to the nominal members. In the light of the decision by the Hon'ble Apex Court, the AO is directed to allow the deduction u/s. 80P(2)(a)(i) of the Act as claimed by the assessee. 5. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 18th November, 2024 Sd/- (Inturi Rama Rao) Accountant Member Cochin, Dated: 18th November, 2024 n.p. 3 ITA No. 366/Coch/2024 Peruvemba Sahakarana Urban Credit Society 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 "