LALITAMBA PATTINA SOUHARDA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This appeal is directed against the order of the Income Tax Appellate Tribunal "SMC-A" Bench : Bengaluru in ITA No.1590/Bang/2016 relating to the assessment year 2012-13, whereby, the appeal filed by the Assessee is dismissed confirming the order of the CIT (Appeals) as well as the assessment order.

(2.) The appellant is a Co-operative Society, registered under the Karnataka Souharda Sahakari Act, 1997 and is engaged in the business of accepting deposits from the members and providing credit facilities to its members only, as contended. In addition, it also carries on e-stamping business.

(3.) The appellant filed a return of income on 06.09.2012 declaring a total income of Rs.65,590/- after claiming deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961 (for short, 'the Act') at Rs.11,01,302/-. The appellant's case was selected for scrutiny. Notice under Section 143(2) of the Act was issued and served on the appellant. After hearing the appellant, the learned Assessing Officer passed an order under Section 143(3) of the Act determining the total income at Rs.25,08,170/-, denying the deductions under Section 80P(2)(a)(i) of the Act, for interest income earned on bank fixed deposits. Aggrieved by the same, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals)-Hubballi, who partly allowed the appeal of the appellant upholding the order passed by the Assessing Officer inasmuch as denial of deductions under Section 80P(2)(a)(i). However accepted the claim of appellant of cost of fund and administrative expenses in respect of fund invested which had yielded interest income. Aggrieved by the same, to the extent it was against Assessee, the appeal was preferred before the Income Tax Appellate Tribunal, Bengaluru by the Assessee. The Tribunal after hearing the parties, dismissed the Appeal. Hence, this appeal by the Assessee. Relevant substantial questions of law raised are as under :