आयकर अपील(cid:547)य अ(cid:876)धकरण, ‘डी’ Ûयायपीठ, चÛे नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI (cid:302)ी जॉज (cid:91) जॉज (cid:91) के, उपाÚय¢ एवं सु(cid:302)ी प(cid:622)मावती एस, लेखा सदèय के सम¢

BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENTAND MS PADMAVATHY S, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 1116/CHNY/2026 िनधा(cid:6981)रण वष(cid:6981)/Assessment Year: 2016-17 M/s. AA 284 Mailambody The Income Tax Officer, Primary Agri Co-Op Credit Vs. Ward 2(1), Society, Erode.

250, Kannadipalayam (P.O), Mylambadi, Bhavani, Erode – 638 314.

PAN: AACAA 1976E (अपीलाथ(cid:7278)/Appellant) ((cid:7079)(cid:7004)यथ(cid:7278)/Respondent)

अपीलाथ(cid:7278) क(cid:7409) ओर से/Appellant by : Ms. A. Vijayalakshmi, CA (Through Virtual Mode)

(cid:7079)(cid:7004)यथ(cid:7278) क(cid:7409) ओर से/Respondent by : Shri Praveen S, Addl.CIT सुनवाई क(cid:7409) तारीख/Date of Hearing : 22.04.2026 घोषणा क(cid:7409) तारीख/Date of Pronouncement : 28.04.2026 आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT:

This appeal filed by the assessee is directed against the Addl./JCIT(A), Panaji order, dated 23.12.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2016-17.

2. The grounds raised read as follows:-

1. The order dated 23.12.2025 passed by the Addl./JCIT (Appeals), Panaji under section 250 of the Income-tax Act, 1961 is contrary to law, facts and circumstances of the case and is liable to be set aside.

2. The CIT(A) erred in law in confirming denial of deduction under section 80P to the appellant, a Primary Agricultural Co-operative Credit Society, despite the appellant providing credit facilities exclusively to its members and being eligible for deduction under the Act.

3. The CIT(A) erred in misapplying the ratio of the Hon’ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. vs. CIT, by treating the said judgment as adverse to the appellant, whereas the judgment in fact affirms that genuine Primary Agricultural Credit Societies are entitled to deduction under section 80P.

4. The CIT(A) erred in imposing an excessive and impossible burden on the appellant by insisting on furnishing member-wise agricultural loan utilisation, crop linkage, landholding details and proof of end-use of loans, which are not statutory requirements under section 80P or the Co-

operative Societies Act and are legally unsustainable.

5. The CIT(A) further erred in relying upon the decision in Madras Auto Rickshaw Drivers Association, which is factually and legally distinguishable and inapplicable to a statutorily recognised Primary Agricultural Co-operative Credit Society engaged in providing credit facilities to its members.

6. The appellant craves leave to add to, amend, alter or withdraw any of the above grounds at the time of hearing.

3. Brief facts of the case are as follows: The assessee is a primary agricultural co-operative credit society registered under the TamilNadu Co-operative Societies Act, 1983. For the assessment year 2016-17, the return of income was filed on 19.03.2018 declaring ‘nil’ income after claiming deduction u/s.80P of the Act totaling to Rs.16,21,520/-. The assessment was completed u/s.143(3) of the Act vide order dated 26.12.2018, by denying the claim of deduction u/s.80P(2)(a)(i) of the Act for a sum of Rs.13,70,700/- (The AO allowed deduction u/s.80P(2)(d) of the Act for Rs.2,00,820/- and 80P(2)(c) of the Act of Rs.50,000/-). The reason for disallowance of claim of deduction u/s.80P(2)(a)(i) of the Act amounting to Rs.13,70,700/- was on the ground that assessee had extended credit facilities to ‘B’ class members (nominal / associate members). According to AO, ‘B’ class members were non-members since they did not have voting rights. According to the AO, since loan has been advanced to the non-members, assessee society had violated the principle of mutuality, hence not entitled for deduction u/s.80P(2)(a)(i) of the Act.

4. Aggrieved, assessee filed appeal before the First Appe