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Tax law

Tribunal Allows Deduction for Co-operative Society Under Section 80P of the Income Tax Act

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— 2 min read

The Income Tax Appellate Tribunal, Cochin Bench, has issued an order allowing a co-operative society, Chingoli Service Co-op. Bank Ltd., to claim deduction under Section 80P of the Income Tax Act. The society, which is classified as a primary agricultural credit co-operative society, was engaged in the business of accepting deposits and lending money to its members. The Appellate Tribunal held that the society was entitled to claim deduction for profits derived from business under Section 80P(2)(a)(i) of the Act, following the judgment of the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 431 ITR 1 (SC).

Key Takeaways:

  • The Appellate Tribunal allowed the co-operative society, Chingoli Service Co-op. Bank Ltd., to claim deduction under Section 80P of the Income Tax Act.
  • The society was classified as a primary agricultural credit co-operative society and engaged in the business of accepting deposits and lending money to its members.
  • The Tribunal held that the society was entitled to claim deduction for profits derived from business under Section 80P(2)(a)(i) of the Act, following the judgment of the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 431 ITR 1 (SC).
  • The society's appeal was allowed, and the assessment was completed at a total income of Rs. 5,59,991/- by denying the claim for deduction under Section 80P of the Act.
  • The Appellate Tribunal followed the decision of the Hon'ble Supreme Court, which held that the assessee is entitled for deduction under Section 80P(2)(a)(i) of the Act, notwithstanding that they may also be giving loans to their members which are not related to agriculture.

Statistics:

  • The society's assessment was completed at a total income of Rs. 5,59,991/-.
  • The Tribunal allowed the society's appeal, which was filed before the CIT(A), and held that the society was entitled to claim deduction under Section 80P(2)(a)(i) of the Act.
  • The society's profits derived from business under Section 80P(2)(a)(i) of the Act were not restricted or limited by implication, as held by the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 431 ITR 1 (SC).

Sources:

  • Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 431 ITR 1 (SC)
  • IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA Nos. 359 & 360/Coch/2025 Assessment Years: 2015-16 & 2022-23 Chingoli Service Co-op. Bank Ltd. vs. The Income Tax Officer-1 & TPS, Alappuzha

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