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TMI Blog2014 (10) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... given as to how and under what circumstances, stay of demand could be granted - the guidelines are binding upon the Officer, while considering the application for grant of stay. The petitioner is the Co-operative Society registered under the provisions of the Tamil Nadu Co-operative Societies Act - The bye-laws of the Society have clearly shows that the Society has to work and function for the benefit of its members - Unlike any other private organization, the Society operates on the strict parameters in accordance with the provisions of the Tamil Nadu Co-operative Societies Act, 1983 and the Tamil Nadu Co-operative Societies Rules, 1988 - if the entire tax levied is directed to be remitted, it would undoubtedly cause severe financial ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act, disallowing the claim of deduction under Section 80P(2)(a)(i) of the Income Tax Act, on the ground that the Co-operative Society provides credit facility to its members and the petitioner's Society is carrying on business of banking and hence, not eligible for deduction under Section 80P(4) of the Income Tax Act. Aggrieved by the disallowance, the petitioner Society preferred appeals before the Commissioner of Income Tax (Appeals)-III, Chennai on 25.04.2014 and the same is pending. 6. In the meanwhile, the petitioner also filed stay petitions before the 1st respondent for stay of collection of demand, on the ground that appeals have been filed against disallowance made in the assessment orders. The 1st respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to any co-operative bank other than a primary agricultural credit society or a Primary Co-operative Agricultural and Rural Development Bank. Accordingly, deduction under Section 80P was no more available to any Regional Rural Bank from assessment year 2007-2008 onwards. It was contended that the expressions co-operative bank, primary agricultural credit society have been taken as per the definition given in Part V of the Banking Regulation Act, 1949 (10 of 1949) and the primary co-operative agricultural and rural development bank have also been defined in the Act to bring clarity. The petitioner placed reliance on the decision of the Gujarat High Court in the case of CIT vs. Jafari Momin Vikas Co-operative Credit Society Ltd., (Guj), re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance on the above said clarification, it was submitted that the High Court of Gujarat in the case of CIT vs. Jafari Momin Vikas Co-operative Credit Society Ltd., (supra) has held that Section 80P(4) applies only to the co-operative bank and not to co-operative credit societies and submitted that the said decision fully supports the case of the petitioner and therefore, the petitioner would fall within Clause (c) of the CBDT notification and thus, requested for grant of stay. Further, it was submitted that Section 2(14)(viia) of the Act only applies to co-operative societies, carrying on business of banking and it does not apply to the present case, since the petitioner is not carrying on the business of banking, as it does not hold the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Banking Regulation Act, nor do they possess license under Section 22 of the said Act, which is the mandatory requirement. As per the clarification issued by the CBDT dated 01.12.2009, detailed instructions have been given as to how and under what circumstances, stay of demand could be granted. In fact, guidelines for staying demand have been specifically stated as under: C. Guidelines for Staying Demand (i) A demand will be stayed only if there are valid reasons for doing so. Mere filing an appeal against the assessment order will not be sufficient reason to stay the recovery of demand. A few illustrative situations where stay could be granted are:- (a) if the demand in dispute relates to issues that have been decided in assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin the definition of banking as defined under Section 5(b) of the Banking Regulation Act, nor do they possess license for carrying on business. It is also a good ground to consider the balance of convenience in their favour. 14(iii). The next aspect for consideration is as to whether pending appeal, if the demand is to be enforced, would it cause irreparable hardship to the petitioner. At this stage, we have to note that the petitioner is the Co-operative Society registered under the provisions of the Tamil Nadu Co-operative Societies Act. The bye-laws of the Society have been produced before this Court, which clearly shows that the Society has to work and function for the benefit of its members. Unlike any other private organization, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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