Aryanad Service Co-operative Bank Ltd. vs. The Income Tax Officer

Parties Involved

Facts Summary

Aryanad Service Co-operative Bank Ltd. filed an appeal against the Income Tax Officer's assessment order for the assessment year 2011-2012. The bank contested the disallowance of deductions under sections 80P(2)(a)(i) and 80P(2)(d) of the Income Tax Act, 1961, which aggregated to Rs.83,70,765/-. The bank argued that it was a Primary Agricultural Cooperative Society and that its primary objective was to provide agricultural credits, thus qualifying for the deductions. The Income Tax Officer maintained that the bank was engaged in banking business and did not qualify as a Primary Agricultural Credit Society. The Tribunal analyzed the bank's activities and bye-laws and concluded that the bank's primary objective was not to provide agricultural credits but to engage in banking business, thereby disqualifying it from the deductions under section 80P of the Act.…

Legal Issues

• 1. Whether the deductions under sections 80P(2)(a)(i) and 80P(2)(d) of the Income Tax Act, 1961 are allowable to the appellant?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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