Deduction u/s 80P can be finalised only after analysing form of Society: Kerala HC sets aside Assessment Order [Read Order]

In a recent judgement, the Kerala High Court (HC) sets aside an assessment order and held that deduction under section 80P of the Income Tax Act, 1961 can be finalised only after analysing the form of Society.

Udayanapuram Service Co-Operative Bank Ltd, the petitioner challenged the assessment order and the demand notice issued under the assessment. The assessment relates to the assessment year 2020 - 21.  The issue involved is whether the petitioner’s Society is entitled to the benefit of Section 80P of the Income Tax Act, 1961. 

The petitioner contended that the said question has not been gone into by the assessing officer and it was a clear violation of the judgment of the Supreme Court in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another.

The petitionerproduced the return filed wherein; a specific claim has been made for deduction under Section 80P of the Income Tax Act. In the assessment order, the assessee was considered a Co-operative Bank.

Petitioner further challenged that, thequestion of whether the petitioner is a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank has notbeen specifically gone into. The justification stated by the respondent was that the petitioner failed to respond to several notices which were issued.

In a judgement, the court considered anassessment order in which the question had not been specifically answered and set aside the assessmentorder and directed reconsideration.

A Single member comprising Justice T R RaviI observed that the petitioner ought to be given another chance to put forward their case before the assessing officer.  The Court allowed the writ petition and set aside the order.  Further directed the 2nd respondent to pass fresh assessment order with notice to the petitioner by law. 

To Read the full text of the Order CLICK HERE

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