9911796707
TMI Blog2015 (11) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 2008-09. The grounds raised in the appeal are as under : (1) The impugned additions and disallowances made in the order under section 143(3) of the Income-tax Act, 1961 dated August 29, 2011 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same may kindly be deleted. (2) ₹ 50,32,224 : The learned Commissioner of Income-tax (Appeals) erred in law as well as on the facts of the case in denying the claim of deduction made by the society under section 80P(2)(a)(i) of the Act. The claim of deduction so denied, being totally contrary to the provisions of law and facts may kindly be allowed as claimed. (3) The learned Commissioner of Income-tax (Appeals) erred in law as well as on the facts of the case in confirming the application of the provisions of section 80P(4) of the Act and consequently, denying the claim of deduction made by the society under section 80P(2)(a)(i) of the Act. The claim of deduction so denied, being totally contrary to the provisions of law and facts kindly be allowed as claimed. 2. The assessee-society is engaged in the business of banking. The Assessing Officer observed that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt activities, as mentioned in the Explanation given below the sub-section of section 80P(4) of the Act. Since the appellant-bank failed to furnish any details, which could substantiate the above conditions, therefore, the Assessing Officer disallowed the claim made under section 80P(2)(a)(i) of the Act. On the other hand the learned authorised representative through his written submission, contended that a liberal interpretation of relevant sections with proper understanding of the facts would lead to a conclusion, which would support the appellant's case. In the light of the above delib erations, eventually, I find that the Assessing Officer is quite justified, while holding that the appellant-bank is not entitled for the benefit extended under section 80P of the Act, for the following reasons : (i) The plain reading of the provisions of relevant sections, i.e., 80P(2)(a)(i) and 80P(4) stipulate that a co-operative society engaged in carrying on business of banking and providing credit facilities to its members would be entitled for such benefit provided such co-oper ative bank/society should be fulfilling the following conditions- a. Such bank/society must be having i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me is being discussed as under : Sr. No. Conditions of the relevant sections, i.e., 80P(2)(a)(i) and 80P(4) Appellant s factual position i.r.o. such conditions (as mentioned in the manual of the bank) Remarks 1. The bank s activities should be confined to a /single taluka The bank s area of the operations confined to six Taluka/tehsil of Sikar dist. Condition not fulfilled. 2. The major object of the bank/society is providing long-term loan for agriculture and rural developments only The objects of the bank are providing loan for immovable properties, agriculture land, residential plots and houses, and also to buy NSC, KVC and towards FDR also. Since agriculture and rural developments object is one of the several objects of the appellant-bank, thus the condition is not found fulfilled. 3. Being not an ordinary co-operative bank, the eligible bank/society cannot accept loans/deposits from its member s/non-member s. The manual of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (PCARDB) is entitled to the deduction provided under section 80P(2)(a)(i) of the Act. In fact, the assessee is not found to be a co-operative bank, the provision of section 80P(4) becomes irrelevant and, therefore, one need not consider the further exception to a co-operative bank, i.e., primary agricultural co-operative society or primary co-operative agricultural and rural development bank. Section 80P(2)(a)(i) nowhere suggests so. The law contemplates all types of credit societies including those which are primary agricultural credit society, engaged in providing credit facilities to its members, eligible to the deduction. Thus the assessee's case is covered under section 80P(2)(a)(i). Section 80P(4) was inserted by the Finance Act, 2006 with effect from April 1, 2007, i.e., for and from the assessment year 2007-08. However, the learned Assessing Officer allowed the deduction under section 80P(2)(a)(i) in the assessment year 2007-08. Therefore, the present year also covered by the order of the Assessing Officer himself. Though the doctrine of res judicata do not apply to the Income-tax proceedings yet however, unless there is a change in the facts and circumstances, the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f strict interpretation of fiscal statute, the word taluk has to be understood in its plain grammatical meaning and there is no scope of any inference. Had the Legislatures intended, it could have used the word tehsil . Thus, even if the operation was spread to 6 tehsils, it was, in any case within one taluk only. The assessee is providing long-term credit for agricultural and rural development activities. The assessee granted loans for improvement of agricultural land and production therefrom under the Rajasthan Co- operative Societies Act. 6. In any case, if a contrary decision is available, the issue becomes debatable and the view which is favourable to the assessee, has to be adopted as held in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC). Therefore, he requested to allow the deduction under section 80P(2)(a)(i) of the Act. 7. At the outset, the learned Departmental representative supported the order of the learned Commissioner of Income-tax (Appeals). 8. We have heard rival contentions and perused the material on record. The intention of the amendment made in section 80P(4) has been explained by the Central Board of Direct Taxes vide Circular N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a State co-operative bank, a Central co- operative bank and a primary co-operative bank . Primary co-operative bank as per Banking Regulations Act is as under : (ccv) 'primary co-operative bank' means a co-operative society, other than a primary agricultural credit society. 10. As per this Board's circular this amendment was applicable from the assessment year 2007-08. In the assessment year 2007-08, the Assessing Officer had allowed the benefit under section 80P(2)(a)(i) of the Act in the case of the assessee. This issue has been considered by the various High Courts as well as the Income-tax Appellate Tribunals particularly in the case of Asst. CIT v. Bangalore Commercial Transport Credit Co-operative Society Ltd. in I. T. A. No. 1069/Bang/2010 dated April 8, 2011. The operative portion is reproduced as under : 9.3. If the intention of the Legislature was not to grant deduction under section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
