ACIT Vs Pandyan Grama Bank (ITAT Chennai)
ITAT Chennai held that deduction under section 80P(2)(a)(i) of the Income Tax Act is admissible to Regional Rural Banks. Accordingly, appeal of revenue dismissed and order of CIT(A) upheld.
Facts- The assessee Pandyan Grama Bank had filed its Return of Income for the assessment year 2016-17 on 30.09.2016 declaring “NIL” income after claiming deduction u/s.80P(2)(a)(i) of the Act. Subsequently, the case of the assessee was re-opened by issuing notice u/s.148 of the Act dated 24.01.2018 and the re-assessment proceedings was completed by denying the deduction claimed u/s.80P of the Act by stating that the assessee is a scheduled bank in assessing the total income at Rs.67,65,65,075/-.
CIT(A) allowed the appeal of the assessee. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the Hon’ble Rajasthan High Court, in PCIT v. Bhilwara Zila Dugdh Utpadak Sahakari Sangh Ltd. [2019 (8) TMI 1131], has affirmed that RRBs continue to be treated as co-operative societies under the Income-tax Act by virtue of Section 22 of the RRB Act. Further, we note that the Tribunal has decided the same issue and passed the order in favour of the assessee. Therefore, in the present facts and circumstances of the case, we do not find any infirmity in the order of the ld.CIT(A) in allowing the assessee’s claim under Section 80P(2)(a)(i) of the Act. Thus, the related grounds raised by the Revenue are dismissed.
