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TMI Blog2014 (8) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 co-operative banks. In the present case, the 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. See The Asst. Commissioner of Income Tax Versus M/s Bangalore Commercial Transport Credit Co-operative Society Ltd.[2011 (4) TMI 1222 - ITAT BANGALORE]. The assessee is a co-operative society, engaged in providing credit facilities to its members - Decided in favour of assesse. X X X X Extracts X X X X X X X X Extracts X X X X ..... cilities) carried on by a co-operative society with its members the assessee's activity was also "income". The Assessing Officer observed that the deduction from gross total income of certain receipts is available only to primary agricultural credit societies or primary co-operative agricultural and rural development banks ; and that the benefit of such deduction is not available to institutions like the assessee- society. The Assessing Officer also referred to Part V, section 56(b), (cci), (ccv) and (ccvi) of the Banking Regulation Act to hold that, if one of the two conditions of the appellant, i.e., its primary object should be banking or its principal business must be transaction in banking business, is sufficient to bring the appellant into the concept of a banking institution. The Assessing Officer referred to the objects of the assessee-society in its bye-laws that the activities of the assessee fall within the provisions of section 56(b), 56(cci), 56(ccv) and 56(ccvi) of Part V of the Banking Regulations Act, 1949 and held that, broadly, they are in the nature of banking activity. 4. In the light of the abovementioned observations, the Assessing Officer held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd rural development bank. For the purpose of the said sub-section, co-operative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949. In Part V of the Banking Regulation Act, 'cooperative bank' means a State cooperative bank, a Central cooperative bank and a primary cooperative bank. 9.2 From the above section, it is clear that the provisions of section 80P(4) has got its application only to co-operative banks. Section 80P(4) does not define the word 'co-operative society'. The existing section 80P(2)(a)(i) shall be applicable to a co-operative society carrying on credit facility to its members. This view is clarified by the Central Board of Direct Taxes vide its clarification No. 133/06/2007-TPL, dated May 9, 2007. The difference between a co-operative bank and a co-operative society are as follows : Nature Co-operative society registered under the Banking Regulation Act, 1949. Co-operative society registered under the Karnataka Co-operative Society Act, 1959. Registration Under the Banking Regulation Act, 1949 and Co-operative Societies Act, 1959. Co-operative Societies Act, 1959. Nature of business 1. As defined in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Commissioner of Income-tax (Appeals) is correct and in accordance with law and no interference is called for." 6. The hon'ble Gujarat High Court in the case of CIT v. Jafari Momin Vikas Co-op. Credit Society Ltd. by judgment, dated January 15, 2014, Tax Appeal No. 442 of 2013 with Tax Appeal No. 443 of 2013 and Tax Appeal No. 863 of 2013 [2014] 362 ITR 331 (Guj) had to deal with the following question of law (page 332) : "'Whether the hon'ble Tribunal is correct in allowing deduction under section 80P(2)(a)(i) to the assessee's society even though the same is covered under section 80P(4) read with section 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 (page 333) : 4. As per section 80P(4), the provisions of section 80P would not apply in relation to any co-operative bank other than primary agri cultural 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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative bank" as defined in Part V of the Banking Regulation Act, 1949, sub-section (4) of section 80P will not apply in this case. 5. The issues with the approval of Chairman, 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 the Central Board of Direct Taxes, Delhi Co-op. Urban Thrift and Credit Society Ltd. was under consideration. The 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 conten tion 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 co-operative banks. In the present case, the 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, the tax appeals are dismissed." 7. In view of the aforesaid decisions, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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