9911796707
TMI Blog2014 (4) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... aiming deduction u/s 80P amounting to Rs.10,29,737/-. The scrutiny assessment u/s 143(3) was completed vide order dated 20.12.2012 accepting the returned income. Subsequently the CIT issued show cause notice on 06.12.2013 proposing to disallow the benefit of deduction u/s 80P(2) of the Act. In response to the show cause notice issued by the CIT, detailed objections were filed by the assessee society vide its letter dated 14.12.2013. However, the CIT rejected the objections raised by the assessee society and passed an order u/s 263 of the Act on 20.01.2014. The learned CIT set aside the assessment order, directed the Assessing Officer to deny the benefit of deduction u/s 80P(2) to the assessee society. The relevant findings of the CIT reads as follows: "17. In view of a thorough and comprehensive analysis of the factual and legal position, the following conclusions are drawn: a) The assessee is mainly engaged in the activity of providing credit facilities to its members from out of the deposits collected and income generated thereof which is in the nature of banking business. b) By virtue of inclusive definition of income in section 2(24)(viia), providing credit facilities by a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer is directed to re-do the assessment bringing to tax the total income computed as per the provisions of the I.T. Act, 1961 without allowing deduction claimed u/s 80P(2)(a)(i) to the extent of Rs.10,29,737/-. Based on the factual position elucidated above, it is clear that the assessment order is erroneous in so far as it is prejudicial to the interests of the revenue since the Assessing Officer failed to disallow the deduction claimed u/s 80P(2)(a)(i) to the tune of Rs.10,29,737/- in the assessment order u/s 143(3) dated 20.12.2011. I, therefore, set aside the assessment order for AY 2009-10 passed by the Assessing Officer and restore the issue to the Assessing Officer for passing a fresh order after examining the relevant facts, the legal position and affording the assessee an opportunity of being heard. The Assessing Officer should take cognizance of the issues raised and the submissions made by the assessee before passing a fresh assessment order in accordance with law". 4. The assessee being aggrieved is in appeal before us. The learned AR submitted that the issue in question is squarely covered by the judgment of the Hon'ble jurisdictional High Court (Dharwad Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is covered u/s 80P(2)(a)(i) i.e. carrying on the business of banking for providing credit facilities to its members. The object of the aforesaid amendment is not to exclude the benefit extended u/s 80P(1) to such society". 6.1 The Hon'ble Gujarat High Court in the case of Tax appeal No.442 of 2013 with Tax Appeal No.443 of 2013 with Tax Appeal No.863 of 2013 in the case of CIT vs. Jafari Momin Vikas Co-Op Credit Society Ltd by judgment dated 15.1.2014 had to deal with the following question of law: "Whether the Hon'ble Tribunal is correct in allowing deduction u/s 80P(2)(a)(i) to assessee's society even though same is covered u/s 80P(4) r.w.s 2(24)(viia) being income from providing credit facilities carried on by a co-operative society with its member"?. The Hon'ble Court held as follows: "4. As per section 80P(4) the provisions of section 80P would not apply in relation to any co-operative bank other than primary agricultural credit society or primary co-operative agricultural and rural development bank. As per the explanation, the terms "co-operative bank" and "primary agricultural credit society" shall have the meanings respectively assigned to them in P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Central Board of Direct Taxes". 7. From the above clarification it can be gathered that sub-section (4) of section 80P will not apply to an assessee which is not a co-operative bank. In the case clarified by CBDT, Delhi Coop Urban Thrift & Credit Society Ltd was under consideration. Circular clarified that the said entity not being a cooperative bank, section 80P(4) of the Act would not apply to it. In view of such clarification, we cannot entertain the Revenue's contention that section 80P(4) would exclude not only the cooperative banks other than those fulfilling the description contained therein but also credit societies, which are not cooperative banks. In the present case, respondent assessee is admittedly not a credit co- operative bank but a credit co-operative society. Exclusion clause of sub-section (4) of section 80P, therefore, would not apply. In the result, Tax Appeals are dismissed". 6.2. The Bangalore Bench of the Tribunal in the case of ACIT Circle 3(1) Bangalore v. M/s. Bangalore Commercial Transport Credit Co-operative Society Ltd in ITA No.1069/Bang/2010 held that section 80P(4) is applicable only to cooperative banks and not to credit cooperative societi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the legislature was not to grant deduction u/5 80P (2)(a)(i) to co-operative societies carrying on the business of providing credit facilities to its members, then this section would have been deleted. The new proviso to section 80P(4) which is brought into statute is applicable only to co- operative banks and not to credit co-operative societies. The intention of the legislature of brining in co-operative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a co-operative society and not a co- operative bank, the provisions of section 80P(4) will not have application in the assessee's case and therefore, it is entitled to deduction u/s 80P(2)(a)(i) of the Act. Hence, we are of the view that the order of the CIT(A) is correct and in accordance with law and no interference is called for." 6.3 The CIT has relied on the Hyderabad Bench of the Tribunal referred (Supra). We agree that Hyderabad Bench order of the Tribunal is in favour of the Revenue. However, we are bound by the judgment of the Hon'ble jurisdictional High Court and the judgments of the Hon'ble Gujarat High Court referred above. Hence we follow the judg ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
