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TMI Blog2015 (6) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... ct holding that assessee as a co-operative bank cannot be sustained and is hereby quashed. - Decided in favour of assessee. - ITA No.716/Bang/2014 - - - Dated:- 20-2-2015 - Shri N.V. Vasudevan And Shri Abraham P. George For the Appellant : Shri A.R. Vivek, Advocate Fore the Respondent : Shri C.H. Sundar Rao, CIT-I (DR) ORDER Per N.V. Vasudevan, Judicial Member This appeal by the assessee is against the order dated 17.3.14 of the CIT, Davangere passed u/s. 263 of the Act. 2. Assessment of the assessee was completed by the AO u/s. 143(3) of the Act by an order dated 30.12.2011. The CIT, in exercise of his powers u/s. 263 by the impugned order held that the AO while completing the assessment did not examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 perused the material on record. The assessee was denied the deduction u/s 80-P(2)(a)(i) of the Act for the reason of introduction of sub section 4 to section 80P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perative society carrying on credit facility to its members. This view is clarified by Central Board of Direct Tax vide its clarification No.133/06/2007-TPL dated 9th May, 2007. The difference between a cooperative bank and a cooperative society are as follows:- Nature Cooperative society registered under Banking Regulation Act, 1949 Cooperative society registered under Karnataka Cooperative Society Act, 1959. Registration Under the Banking Regulation Act, 1949 and Cooperative Societies Act, 1959. Cooperative Societies Act, 1959. Nature of business 1. As defined in section 6 of Banking Regulation Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicable to cooperative banks. Use of words The word bank , banker , banking can be used by a cooperative bank. The word bank , banker , banking cannot be used by a cooperative society. 9.3 If the intention of the legislature was not to grant deduction u/s 80P(2)(a)(i) to cooperative 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 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 bri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be entitled to benefits of deduction under section 80P. CIT(Appeals) as well as the Tribunal reversed the decision of the Assessing Officer on the premise that the respondent assessee not being a bank, exclusion provided in sub-section(4) of section 80P would not apply. This, irrespective of the fact that the respondent would not fall within the expression primary agricultural credit society . 6. Had this been the plain statutory provisions under consideration in isolation, in our opinion, the question of law could be stated to have arisen. When, as contended by the assessee, by virtue of subsection(4) only co-operative banks other than those mentioned therein were meant to be excluded for the purpose of deduction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection( 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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