B.R. Baskaran ORDER
George George K., Member (J)
1. This appeal at the instance of the assessee is directed against CIT(A)'s order dated 31.07.2019. The relevant assessment year is 2015-2016.
2. There is a delay of 4 days in filing this appeal. The assessee has filed a petition for condonation of delay along with an Affidavit of the Secretary of the assessee-society. On perusal of the reasons stated for belated filing of the appeal, we noticed that no latches can be attributed to the assessee and there is sufficient cause in filing this appeal belatedly. Accordingly, we condone the delay in filing this appeal and proceed to dispose of this appeal on merits.
3. The grounds raised read as follows:-
"1. The appellant denies himself liable to be taxed on disallowance of Rs. 6,89,167/- as assessed by the learned CIT(A) as against the return income of Rs. NIL under the facts and circumstances of the case of the appellant.
2. The learned CIT(A) has erred in disallowing the claim of deduction of an amount of Rs. 6,89,167/- u/s. 80P(2)(d) of the Act on the fact and circumstances of the case.
3. The CIT(A) erred in coming to the conclusion that, the Appellant failed to establish as to how the facts of its case differs from that of the Jurisdictional Karnataka High Court in M/s. Totgars Co-Operative Sale Society Ltd. case', without appreciating the facts and circumstances of the case.
4. Both the Assessing Officer and CIT(A) failed to understand that the governing Act is to be followed for arriving at total income of Society and not the general taxing Act i.e., Income Tax Act under the fact and circumstances of the case.
5. The Appellant craves leave to add, alter, delete or substitute any of the grounds urged above.
6. In view of the above and the other grounds that may be urged at the time of hearing of the appeal, your Appellant prays that the appeal may be allowed in the interest of equity and justice."
4. The brief facts of the case are as follows:
The assessee is a co-operative society registered under the Karnataka Co-operative Societies Act, 1959. For the assessment year 2015-2016, the return of income was filed on 30.09.2015 declaring 'NIL' income after claiming deduction of Rs. 50,18,018 u/s. 80P(2)(a)(i) of the I.T. Act. The assessment was selected for scrutiny and notice u/s. 143(2) and 142(1) of the I.T. Act was duly served on the assessee. The assessment u/s. 143(3) of the I.T. Act was completed vide order dated 28.12.2017, wherein the assessee was denied the claim of deduction u/s. 80P(2)(a)(i) of the I.T. Act amounting to Rs. 50,18,018. The A.O. held that the assessee is carrying on the business of banking and in view of the amended provisions of section 80P of the I.T. Act, the assessee society, which is carrying on the business of banking was not entitled to the claim of deduction u/s. 80P(2)(a)(i) of the I.T. Act. In holding so, the Assessing Officer held that the Hon'ble Karnataka High Court judgment in the case of Bilur Gurubasava Pattina Sahakari Sangha Niyamit in ITA No. 5006/2013 (judgment dated 05.02.2014) relied on by the assessee has not attained finality and the same is pending in SLP before the Hon'ble Supreme Court.
5. Aggrieved, the assessee preferred an appeal to the first appellate authority. The CIT(A) partly allowed the appeal of the assessee. With regard to the interest income earned by providing credit facilities to the members, the CIT(A) by following the judgment of Hon........