Mundur Service Co-op. Bank Ltd. Vs ITO (ITAT Cochin)
ITAT Cochin: Deduction u/s 80P Allowed to Primary Agricultural Credit Cooperative Society – Supreme Court’s Mavilayi Ruling Applied
Cochin Tribunal allowed the appeal of a cooperative society by directing AO to grant deduction u/s 80P, holding that sub-section (4) had no application to a Primary Agricultural Credit Cooperative Society not holding a banking licence.
Assessee, a cooperative society registered under the Kerala Cooperative Societies Act, 1969, engaged in accepting deposits from members & providing credit facilities to members, filed return declaring income of Rs.1,650/- after claiming deduction u/s 80P. AO completed assessment u/s 143(3) r.w.s. 143(3A) & 143(3B) determining total income at Rs.2.33 crores by denying deduction u/s 80P, relying on Kerala High Court Full Bench decision in Chirakkal Service Cooperative Bank Ltd.
CIT(A) upheld the denial, placing reliance on provisions of section 80P(4).
Tribunal noted that Assessee was admittedly a Primary Agricultural Credit Cooperative Society, duly registered, without any banking licence. Therefore, section 80P(4) could not be invoked. Tribunal relied on Mavilayi Service Co-operative Bank Ltd. v. CIT (2021) 431 ITR 1 (SC) , which had overruled earlier Kerala High Court rulings. Following the binding ratio, Tribunal held that the Assessee was eligible for deduction u/s 80P as claimed. Accordingly, AO was directed to allow the deduction & the appeal of Assessee was allowed.
