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ITO vs. M/s. The Pavagada Souharda Multi Purpose Cooperative Ltd. - (Income Tax Appellate Tribunal) (16 Sep 2021)

Entities registered under the Karnataka SouhardaSahakari Act, 1997 fit into the definition of "co-operative society" as enacted in Section 2(19) of the IT Act

MANU/IL/0328/2021

Direct Taxation

The Assessee, a Co-operative registered under Section 6(1) of the Karnataka Souharda Co-operative Act, 1997 has claimed deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961 (IT Act). According to AO, the benefit of deduction under Section 80P(2)(a)(i) of the Act was available only to a co-operative society and since the Assessee is only a souharda sahakari registered under the Karnataka Souharda Sahakari Act, 1997 and since under the said Act, Co-operative Societies are not being registered, the Assessee should not be allowed the benefit of deduction u/s.80P(2)(a)(i) of the Act.

Being aggrieved, the assessee has approached CIT(A). The CIT(A) reversed the order of the AO by following the decision of the Hon’ble Karnataka High Court in the case of S.SwabhimaniSouhardaCredit Co-operative Ltd., Vs. Government of India & 3 others wherein it was held that the entities registered under the Karnataka SouhardaSahakari Act, 1997 fit into the definition of Cooperative Society as enacted in Section 2(19) of IT Act and therefore subject to all just exceptions, are entitled to stake their claim for the benefit of Section 80(P) of IT Act.

Hence, Revenue has filed present appeal. After considering the definition of Cooperative Society as defined in Section 2(19) of IT Act and the decision of Karnataka High Court in the case of S.SwabhimaniSouhardaCredit Co-operative Ltd., Vs. Government of India & 3 others, it can be held that entities registered under the Karnataka SouhardaSahakari Act, 1997 fit into the definition of "co-operative society" as enacted in Section 2(19) of the IT Act and so, the assessee should be allowed deduction under section 80P(2)(a)(i) of the Act and the CIT(A) was justified in doing so. Except the ground that the Assessee was not a co-operative society entitled to deduction u/s.80P(2)(a)(i) of the Act, no other reasons were given for denying the benefit of the said deduction to the Assessee. Hence, the order of CIT(A) is upheld.

Tags : CO-OPERATIVE SOCIETIES   DEDUCTION  

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