2017 (1) TMI 439 - AT - Income Tax

Deduction u/s.80P allowance - assessee is a Co-operative Society - Held that - As decided in assessee s own case referring to the letter of the CBDT bearing No. F. No. 133/06/2007-TPL dated 09.05.2008 addressed to the Delhi Urban T&C Society Ltd., stating that for the purposes of subsection 4 of section 80P, cooperative bank shall have the same meaning as assigned to it in part V of the Banking Regulation Act 1949, according to which cooperative banks means a State Co-operative Bank, a Central Co- operative Bank and Primary Co-operative Bank. Though the said clarification is given by the CBDT in connection with some other assessee, the crux of the matter pertains to the clarification of co-operative bank for the purpose of subsection 4 of section 80P. It is observed that the said clarification has also been relied by the Tribunal in many cases. Therefore, cooperative banks mentioned in the said subsection indicates only the State, Central and Primary Co-operative Banks only. The assessee is not a co-operative bank for the purposes of section 80P(4) of the Act. CIT(A) is justified in directing the AO to allow the deduction claimed by the assessee u/s 80P of the Act on the reason that the assessee, a cooperative credit society is not a bank for the purposes of section 80P(4) of the Act - Decided in favour of assessee

Summary

Issues:
Appeal against CIT(A) order for AY 2010-2011 regarding deduction u/s. 80P of the IT Act.

Analysis:
1. The appeal was filed by the Revenue against the CIT(A)'s order for AY 2010-2011 concerning the allowance of deduction u/s. 80P of the IT Act.
2. The assessee, a Co-operative Society registered under the Maharashtra Co-operative Societies Act 1960, filed a return declaring income at Nil after claiming a deduction u/s 80P amounting to ?1,69,89,044. The assessment completed under section 143(3) of the IT Act denied the deduction.
3. The CIT(A) allowed the deduction after detailed observation, following the order of the ITAT-Pune Bench in the assessee's own case for AY 2009-2010.
4. The Tribunal in the earlier case held that the assessee, a cooperative credit society, does not fall within the restriction of section 80P(4) of the Act, as it is not a cooperative bank but a cooperative society.
5. The Tribunal noted that the cooperative society did not require a license from the Reserve Bank of India to carry on banking business, distinguishing it from cooperative banks.
6. The Tribunal also highlighted the distinction between cooperative societies and cooperative banks under various provisions, emphasizing that the cooperative society in question did not meet the criteria of a cooperative bank under section 80P(4) of the Act.
7. Citing previous judgments and legal provisions, the Tribunal upheld the CIT(A)'s decision to allow the deduction u/s 80P for the assessee, as it was not classified as a cooperative bank.
8. The Tribunal dismissed the Revenue's appeal and rendered the Cross Objection raised by the assessee as infructuous, as it supported the CIT(A)'s conclusion.
9. Ultimately, both appeals were dismissed, affirming the CIT(A)'s order allowing the deduction u/s 80P for the assessee for AY 2010-2011.