Tribunal held that when the CIT (A) had decided on the basis of a decision of the High Court which was subsequently reversed by the Full Bench, there would be a rectifiable mistake coming within S. 154 of the Act . The Full Bench held that the activities of the assessee had to be examined to determine whether the assessee was a co-operative society or a co-operative bank. Thus the CIT (A ) had rightly recalled his earlier order granting deduction under S. 80P(2). However he ought not to have rejected the claim of deduction under S. 80P(2) without examining the activities of the assessee. The issue of deduction under S. 80P(2) was remitted to the AO. The AO shall examine the activities of the assessee and determine whether the activities were in compliance with the activities of a co-operative society functioning under the Kerala Co-operative Societies Act, 1969 and accordingly grant deduction under S. 80P(2) of the Act . Followed Mavilayi Service Co-Operative Bank Ltd. v. CIT ( 2019 ) 414 ITR 67 (FB) ( Ker) ( HC ) ( AY.2010-11)
The Chombal Service Co-Operative Bank Ltd. v ITO (2020) 81 ITR 13 ( Cochin) (Trib)
S. 154 : Rectification of mistake – Commissioner (Appeals) granting deduction on basis of decision of High Court — Decision subsequently reversed by full bench — Order rectifying and disallowing the interest is held to be justified [ S.80P(2)(a) (i) , 250 ]