S.80P Deduction Claim by Co-operative Society Cannot be Disallowed Solely for Lack of Supporting Details: ITAT Remands for Fresh Verification [Read Order]

The Income Tax AppellateTribunal (ITAT), Chennai Bench, held that deduction under Section 80P cannot be disallowed solely for want of supporting details and remanded the matter for fresh verification.

The assessee, Madurai Electricity System PSCS, is a co-operative credit society engaged in providing credit facilities to its members and mobilising deposits. For the relevant year, it filed its return declaring nil income after claiming deduction under Section 80P(2)(a)(i) amounting to ₹2.03 crore.

The Assessing Officer disallowed the deduction, noting that the assessee had not furnished documentary evidence to show that the interest income was derived from providing credit facilities to its members. The CIT(A) also upheld the disallowance.

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Before the Tribunal, the assessee submitted that its activities were confined to providing credit facilities to members and that the failure to furnish details earlier was due to lack of proper professional support. It also furnished a breakup of the interest earned to show that the income arose from its regular business operations and was eligible for deduction under Section 80P.

The Revenue, however, supported the orders of the lower authorities, pointing out that no supporting material had been produced during the assessment proceedings.

The Tribunal, comprising Ms. Padmavathy S (Accountant Member) and Manu Kumar Giri (Judicial Member), noted that the deduction had been denied only because the assessee had not placed the relevant material before the authorities.It also noted that there was nothing on record to show that the assessee was not engaged in providing credit facilities to its members.

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The Tribunal therefore considered it appropriate to give the assessee one more opportunity to place the necessary details on record. The matter was remanded to the AssessingOfficer for fresh verification , after providing adequate opportunity of hearing.

The appeal was allowed for statistical purposes.

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