Shri Sangameshwar Coop Credit Society vs. Income Tax Officer

Parties Involved

Facts Summary

The assessee, Shri Sangameshwar Coop Credit Society, is a co-operative credit society registered under the Karnataka State Co-operative Societies Act, 1959, engaged in providing credit facilities to its members. The society has both regular and nominal/associate members. For the assessment year 2018-19, the society filed its original return of income electronically on 10/09/2018, declaring gross total income of Rs.42,47,998/- and, after claiming deduction under Chapter VI-A, declared total income at Rs. Nil. The society subsequently filed a revised return of income electronically on 31/10/2018, declaring gross total income of Rs.44,01,998/- and claiming a deduction of Rs.42,97,998/- under Chapter VI-A, thereby declaring total income of Rs.1,04,000/-. The return filed by the society was selected for scrutiny, and statutory notices under section 143(2) and section 142(1) of the Act were issued and served on the society. After perusal of the details and documents filed, the society was specifically called upon to furnish: (i) a list of complete name and address of the regular members and nominal members/co-members/non-members, along with supporting evidence; (ii) details of interest/receipts from the regular members and nominal members/co-members/non-members; (iii) details of funds invested in fixed deposits, the source of such funds, i.e., whether from regular members or nominal members/co-members/non-members, and the interest earned thereon; and (iv) the calculation of the amo…

Legal Issues

• 1. The order of the learned Commissioner of Income Tax (Appeals) is opposed to law, facts and circumstances of the case.
• 2. The learned CIT(A) erred in dismissing the appeal ex-parte without properly appreciating the facts and materials available on record.
• 3. The learned CIT(A) erred in confirming the disallowance of deduction of ₹42,97,998 claimed under Section 80P(2)(a)(i) of the Income-tax Act, 1961.
• 4. The learned CIT(A) failed to appreciate that the appellant is a Co-operative Credit Society registered under the Karnataka Co-operative Societies Act and engaged in providing credit facilities to its members.
• 5. The learned CIT(A) failed to appreciate that nominal/associate members are also members under the Karnataka Co-operative Societies Act and therefore deduction under Section 80P(2)(a)(i) cannot be denied.
• 6. The learned CIT(A) erred in applying the decision of the Hon'ble Supreme Court in Citizen Co-operative Society Ltd. without appreciating the distinguishing facts of the appellant's case.

Judgment Outcome

Decided in favour of Assessee.

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