IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI SOUNDARARAJAN K., JM Assessment Years: 2010-11, 2012-13 & 2016-17 Vilavattam Service Co-op. Bank Ltd.

Vilavattam, Thrissur 680028 [PAN: AAAV9819K] .......... Appellant Vs.

The Income Tax Officer Ward - 2(3), Thrissur .......... Respondent Appellant by: ------- None -------

Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 28.11.2024 Date of Pronouncement: 27.01.2025

O R D E R

Per: Inturi Rama Rao, AM These appeals filed by the assessee are directed against separate orders of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 01.08.2023, 11.08.2023 & 01.08.2023 for Assessment Years (AYs) 2010-11, 2012-13 &

2016-17, respectively

2. Since identical issues are involved, these appeals are heard together and disposed of vide this common order.

3. Brief facts of the case are that the assessee is a primary agricultural credit society registered under the Kerala Co-Operative Societies Act, 1969. The assessee had not filed the return of income under the provisions of section 139 of Income Tax Act, 1961 (hereinafter "the Act") for AY 2010-11. Notice u/s. 148 of the Act was issued to the assessee on 28.03.2017. In response to the notice u/s. 148 the assessee filed return of income disclosing Nil income after claiming deduction u/s. 80P of the Act. Against the said return of income assessment was completed by the AO vide order dated 27.11.2017 passed u/s. 143(3) r.w.s. 147 of the Act at a total income of Rs. 39.03,419/- by holding that the assessee is a co-operative bank placing reliance of the Full Bench judgement of the Hon'ble Kerala High Court in the case of Pr.CIT v. Mavilayi Service Co-operative Bank Ltd. [2019] 414 ITR 67 (Ker) (FB).

4. Being aggrieved, an appeal was filed before the CIT(A), who wide the impugned order held that the assessee is co-operative bank and accordingly denied exemption by placing reliance on the provisions of sub-section (4) of section 80P of the Act.

5. Being aggrieved, assessee is in appeal before us in the present appeal.

6. When the application was called none appeared on behalf of the assessee nor is there any application for adjournment. Therefore, we proceed to dispose the stay application after hearing the ld. Sr. DR.

7. Undoubtedly the assessee is a primary agricultural co-operative society registered under the provisions of Kerala Co-Operative Societies Act, 1969 and engaged in the business of providing credit facilities to its members. The AO was of the opinion that the assessee is not a co-operative society but a co- operative bank, as it is engaged in the business of banking. Accordingly he denied the claim for deduction u/s. 80P(2)(a)(i) of the Act placing reliance on the provisions of sub-section (4) of section 80P of the Act and also placing reliance on the Full Bench judgement of the Hon'ble Kerala High Court in the case of Mavilayi Service Co-op. Bank Ltd. (supra). We find that the Full Bench decision of the Hon'ble Kerala High Court was overruled by the Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. v. CIT reported in [2021] 431 ITR 1 (SC) wherein it was held that once a co-operative society is registered as a primary co-operative society so long as it does not enjoy any licence from the Reserve Bank of India to carry out business of banking’ the co-operative society cannot be treated as a co-operative bank, the AO cannot possibly go into the question whether the society continues to be a primary co-operative society. The relevant part of the judgement is extracted as below: -

“To sum up, therefore, the ratio decidendi of Citizen Co-operative Society Ltd. (supra), must be given effect to. Section 80P of the Income-tax Act, being a benevolent provision enacted by Parliament to encourage and pro- mote the credit of the co-operative sector in general must be read liberally and reasonably, and if there is ambiguity, in favour of the assessee. A deduction that is given wi