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TMI Blog2015 (4) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-3-2015 - Shri N.V. Vasudevan And Shri Jason P. Boaz JJ. For the Appellant : Shri P. Dhivahar, JCIT (D.R) For the Respondent : Shri Narendra Sharma, Advocate. ORDER Per Jason P Boaz, Accountant Member : This appeal by the revenue is directed against the order dated 29.5.2014 of the CIT(Appeals)-I, Bangalore, relating to assessment year 2010-11. 2. The assessee is a co-operative society, engaged in providing credit facilities to its members. The assessee had claimed deduction u/s. 80P(2)(a)(i) of the Act. Under Sec.80P(2)(i) of the Act where the gross total income of a co-operative society includes income from carrying on the business of banking or providing credit facilities to its members, the same is allowed deduction upto Assessment Year 2007-08. By the Finance Act, 2006 w.e.f. 1-4-2007, Sub-section (4) was inserted in Sec.80-P which provides as follows: (4) The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. Explanation : For the purposes of this sub-section,- (a) co-operative bank and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve-mentioned observations, the AO held that the appellant was not entitled to exemption u/s 80P(2)(a)(i) of the Act and brought the same to tax. 4. The CIT(A), Mysore by order dt.30.1.2013 confirmed the order of the AO. Hence this appeal by the Assessee before the Tribunal. 5. At the time of hearing, it was brought to our notice by the parties that the issue raised by the Assessee has already been considered and decided by this 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, wherein this Tribunal held that section 80P(4) is applicable only to cooperative banks and not to credit cooperative societies. The intention of the legislature of bringing in cooperative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a cooperative society and not a cooperative 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. The following were the relevant observations of the Tribunal:- 9. We have heard the rival submissions and per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Regulation Act. 1. As per the bye laws of the cooperative society. 2. Can open savings bank account, current account, overdraft account, cash credit account, issue letter of credit, discounting bills of exchange, issue cheques, demand drafts (DD), Pay Orders, Gift cheques, lockers, bank guarantees etc. 2. Society cannot open savings bank account, current account, issue letter of credit, discounting bills of exchange, issue cheques, demand drafts, pay orders, gift cheques, lockers, bank guarantees etc. 3. Cooperative Banks can act as clearing agent for cheques, DDs, pay orders and other forms. 3. Society cannot act as clearing agent, for cheques, DDs, pay orders and other forms. 4. Banks are bound to follow the rules, regulations and directions issued by Reserve Bank of India (RBI). 4. Society are bound by rules and regulations as cooperative societies act. Filing of returns Cooperative banks have to submit annual return to RBI every year. Society has to submit the annual return to Registrar of Societi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Courts and the co-ordinate benches of the Bangalore Tribunal, the issue stands covered squarely in favour of the assessee and therefore Revenue s appeal is liable to be dismissed. 7. 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 Coop 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 under section 80P(2)(a)(i) to assessee s society even though same is covered under section 80P(4) rws 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 Part V of the Banking Regulation Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an, Central Board of Direct Taxes. 8. 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 co-operative 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 subsection( 4) of section 80P, therefore, would not apply. In the result, Tax Appeals are dismissed. 9. In view of the aforesaid decisions, we are of the view that there is no merit in this appeal by the Revenue. Consequently, the same is dismissed. 10. In the result, the Revenue s appeal is dismissed. Order pronounced in the open court on 5th March, 2015. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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