The Tax Publishers2021 TaxPub(DT) 5043 (Bang-Trib)

INCOME TAX ACT, 1961

Section 80P(2)

In the light of the principles laid down by Apex Court in the case of the Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT (2021) 431 ITR 1 (SC) : 2021 TaxPub(DT) 273 (SC), issue regarding deduction under section 80P needed to be reconsidered afresh and accordingly matter was remanded back to AO to consider the issue afresh after affording a reasonable opportunity of hearing to the assessee.

Deduction under section 80P(2) - Allowability - Assessee having income both from members and non-members -

Assessee claimed exemption under section 80P. AO noticed that assessee was having income both from members and non-members. Since assessee was having income from non-members, AO held that assessee had violated the principles of mutuality. AO by placing reliance on the judgment of Apex Court in the case of the Citizen Co-operative Society Ltd. v. Asstt. CIT (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC), denied the benefit of deduction under section 80P. Held:— Apex Court held that if associate / nominal members are treated as members under the State Co-operative Societies Act, there is no violation of the provisions under the State Co-operative Societies Act, and therefore, assessee would be entitled to the benefit of deduction under section 80P. In the light of the principles laid down by Apex Court in the case of The Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT (2021) 431 ITR 1 (SC) : 2021 TaxPub(DT) 0273 (SC), issue of deduction under section 80P needed to be reconsidered afresh by AO after affording a reasonable opportunity of hearing to the assessee.

FollowedMavilayi Service Cooperative Bank Ltd. & Ors. v. CIT (2021) 431 ITR 1 (SC) : 2021 TaxPub(DT) 273 (SC) and The Citizen Co-Operative Society Limited v. Asstt. CIT (2017) 397 ITR 1 (SC) : 2017 TaxPub(DT) 2053 (SC).

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2017-18



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