ITA No.707/Coch/2023 :Asst.Year 2015-2016

Parties Involved

Facts Summary

The assessee is a cottage industry and registered under the provisions of the Kerala Co-operative Societies Act. The assessee purchased the raw material and handed over to the members and the members along with the family members manufactured the coir products. The assessee claimed the income as exempt under the provisions of sec. 80P of the Act, but the assessing authority did not accept the claim. The assessee challenged the order before the NFAC Delhi, which also dismissed the appeal. The assessee filed an appeal with the Income Tax Appellate Tribunal (ITAT) Cochin Bench. The assessee argued that the Officer below were not justified in denying the deduction under any of the sub-sections u/s. 80P(2)(a). The assessee also argued that the assessment was made based on the I.T. Inspectors report which was not provided to the assessee, thereby denying natural justice. The assessee further argued that the Officer misunderstood the CBDT Circular No. 722 of 19/9/85. The assessee prayed that the addition made by denying deduction u/s. 80P(2)(a) may be deleted & exemption granted u/s. 80(P)(2)a.…

Legal Issues

• 1. The Officer below were not justified in denying the deduction under any of the sub-sections u/s. 80P(2)(a).
• 2. The Officers failed to appreciate the facts that the assessment has been framed' on the basis of the I.T. Inspectors report which has not been put forth to your appellant thereby denying natural justice and making an assessment, behind the back of the appellant.
• 3. Sec. 80P(2)a being a benevolent section, for encouraging small scale societies, the Officer is not justified in denying the Deduction claimed u/s. 80-P.
• 4. The Officer below have misunderstand the CBDT Circular No. 722 of 19/9/85 relied upon.

Judgment Outcome

Decided in favour of Assessee.

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