The Cochin bench of the Income Tax Appellate Tribunal ( ITAT ) has held that deduction under Section 80P of the Income Tax Act not available to a Co-operative society having an area of operation in more than one Taluk.
In the instant case Assessee is a co-operative society, where deduction under section 80P was dissallowed due to Assessee’s area of operation not confined to one Taluk and also the other reason put forward was assessee was solely engaged in the business of banking and in view of insertion of section 80P(4) of the Act.
Being aggrieved with the decision, Assessee carried the matter to the CIT (A) wherein decided that assessee entitled to the deduction by pressing the judgment of the Hon’ble jurisdictional High Court in the case of The Chirakkal Service Co-operative Bank Ltd. & Ors. v. CIT.
Aggrieved by the decision, the Revenue approached the Tribunal. The counsel for Assessee submitted regarding the area of operation that it is confined to Aluva taluk in Ernakulam District. The changes were carried in the financial year 2011-12 relevant to the AY.
The bench comprising including Judicial Member George George K and Accountant Member Chandra Poojari, held that the section 80P can be granted only to those co-operative societies, whose activities are confined only to one taluk. The findings of AO that the activities are carried in two Taluk has been objected to by Assessee and stated that the bye-laws are amended during the disputed year and the operations were confined to one Taluk.
Finally bench categorically held that “a co-operative society having an area of operation in more than one taluk is not entitled to deduction u/s 80P of the Income Tax Act.”
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