Mercantile Co-op Credit Society Ltd. Vs ITO (ITAT Panaji)
ITAT Restores Co-op Society Tax Appeal Hearing; Co-op Society Gets Second Chance at ITAT: Appeal Restored for Fresh Hearing on Tax Claims
Income Tax Appellate Tribunal (ITAT), Panaji bench, has restored the appeal of Mercantile Co-operative Credit Society Ltd., directing the tax authorities to provide the society with a fresh opportunity to be heard regarding the denial of a significant tax deduction claim and an addition to its income. The Tribunal’s decision, pronounced on February 6, 2025, sets aside an earlier ex-parte order passed by the National Faceless Appeal Centre (NFAC), which had granted only partial relief.
The case pertains to the Assessment Year 2017-18. Mercantile Co-operative Credit Society Ltd. had filed its income tax return reporting nil income after claiming a deduction of ₹1,10,82,241 under Section 80P of the Income Tax Act, 1961. Section 80P provides deductions for income of co-operative societies engaged in specific activities, such as carrying on the business of banking or providing credit facilities to its members. This deduction is crucial for many credit cooperative societies as it often exempts their core business income from taxation.
Following the filing of the return, the case was selected for scrutiny under the Computer Assisted Scrutiny Selection (CASS). The Assessing Officer (AO) initiated proceedings by issuing a notice under Section 142(1) of the Act, seeking various details and information to support the claims made in the return, including the substantial deduction claimed under Section 80P.
