Is a co-operative society eligible to claim deduction u/s 80P of the Income Tax Act?

This Income Tax Appellate Tribunal (ITAT) ruling addresses whether a co-operative society registered under the Karnataka Souhardha Sahakari Act, 1997, is eligible for tax deductions under Section 80P of the Income Tax Act. The Assessing Officer had denied the deduction, arguing that registration under this specific Act meant it wasn't a 'co-operative society' as defined by the Income Tax Act. However, the ITAT, referencing a Karnataka High Court judgment, found that entities registered under the 1997 Act do indeed qualify as co-operative societies for the purpose of Section 80P.

IN THE INCOME TAX APPELLATE TRIBUNAL
BANGALORE “SMC-B” BENCH, BANGALORE
Before Shri George George K, Judicial Member
ITA No.193/Bang/2021: Asst.Year 2015-2016

 Shri Mathaji Vividoddesha
Souharda Sahakari Niyamitha
No.126, I Main, Sheshadripuram
Bangalore – 560 020.
PAN : AAGAS8784A

vs

The Income Tax Officer
Ward 2(2)(1)
Bangalore.

Appellant by : Sri.Prakash Hegde, CA
Respondent by : Sri.Ganesh R.Ghale, Standing Counsel
Date of Hearing : 14.09.2021
Date of Pronouncement : 20.09.2021
O R D E R

The brief facts of the case are as follows:-
The assessee is a credit co-operative society engaged in providing credit facilities to its members. For the assessment year 2015-2016, the return of income was filed after claiming deduction of Rs.25,17,420 u/s 80P of the I.T.Act. Later on the assessee filed revised return on 28.12.2015 declaring total income at Rs.11,94,000 after claiming the amount of Rs.25,10,956 u/s 80P of the I.T.Act. The assessment was completed u/s 143(3) of the I.T.Act vide order dated 18.12.2017.

2. Aggrieved, the assessee preferred an appeal to the ITAT. The learned AR submitted that the assessee though it is registered under the Karnataka Souhardha Sahakari Act, 1997, it is still a co-operative society entitled to the benefit of section 80P of the I.T.Act. In this context, the learned AR relied on the judgment of the Hon’ble jurisdictional High Court in the case of Swabhimani Souharda Credit Cooperative Limited v. Government of India reported in (2020)
421 ITR 670 (Kar.).

3. I have heard rival submissions and perused the material on record. The primary reason for the Assessing Officer to deny the benefit of deduction u/s 80P of the I.T.Act was that the assessee was only registered under the Karnataka Souhardha Sahakari Act, 1997, and therefore, was not a cooperative society within the purview of section 2(19) of the I.T.Act. The Hon’ble Karnataka High Court in the case of M/s.Swabhimani Souharda Credit Co-operative Ltd. (supra) had decided an identical issue and held that the entities registered under the Karnataka Souharda Sahakari Act, 1997, fit into the definite term “Co-operative Society”.

4.In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 20th day of September, 2021.

Please find attached the enclosed file for the full judgement