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TMI Blog2015 (11) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2011-12). - - - Dated:- 8-5-2015 - N. V. VASUDEVAN (Judicial Member) and ABRAHAM P. GEORGE (Accountant Member) P. Dhivahar for the appellant. None for the respondent. ORDER The order of the Bench was delivered by 1. N. V. Vasudevan (Judicial Member).-This appeal by the Revenue is directed against the order dated September 12, 2014 of the Commissioner of Income-tax (Appeals), Belgaum relating to the assessment year 2011-12. 2. None appeared on behalf of the assessee at the time of hearing. The assessee has filed written submissions. However, we proceed to dispose of the case on merits considering the material on record and after hearing the learned Departmental representative. 3. The only issue involved in this appeal by the assessee is denial of deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961 (hereinafter referred to as the Act in short) by the Revenue authorities. 4. The assessee is a co-operative society registered under the Karnataka State Co-operative Societies Act, 1959. It is engaged in providing credit facility to its members. The assessee had claimed deduction under section 80P(2)(a)(i) of the Act. Under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Banking Regulations Act and held that its activities are in the nature of banking . According to the Assessing Officer, none of the criteria contemplated in sub-section (4) were fulfilled in the case of the assessee. 6. In the light of the abovementioned observations, the Assessing Officer held that the appellant was not entitled to exemption under section 80P(2)(a)(i) of the Act and brought the same to tax. 7. On appeal by the assessee, the Commissioner of Income-tax (Appeals) allowed the claim of the assessee for deduction under section 80P(2)(a)(i) of the Act following the judgment of the hon'ble jurisdictional High Court in CIT v. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot I. T. A. No. 5006 of 2013 dated February 5, 2014 [2014] 369 ITR 86 (Karn), wherein the hon'ble jurisdictional High Court took the view that when the status of the assessee is a co-operative society and not a co-operative bank, the order passed by the Assessing Officer extending the benefit of exemption from payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural 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, 'co-operative bank' means a State Co-operative Bank, a Central Co-operative Bank and a Primary Co-operative 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 sub-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 Societies Act, 1959. Registration Under the Banking Regulation Act, 1949 and the Co-operative S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o section 80P(4) which is brought into statute is applicable only to co-operative banks and not to credit co-operative societies. The intention of the Legis lature of bringing in co-operative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a co-operative society and not a co-operative bank, the provisions of section 80P(4) will not have application in the assessee's case and therefore, it is entitled to deduction under section 80P(2)(a)(i) of the Act. Hence, we are of the view that the order of the Commissioner of Income-tax (Appeals) is correct and in accordance with law and no interference is called for. 10. 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 v. Jafari Momin Vikas Co-op. Credit Society Ltd. [2014] 362 ITR 331 (Guj) by judgment dated January 15, 2014 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 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther than a primary agricultural credit society or a primary co-operative agricultural and 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. 3. In Part V of the Banking Regulation Act, co-operative bank means a State co-operative bank, a Central co-operative bank and a primary co-operative bank. 4. Thus, if the Delhi Co-op. Urban Thrift and Credit Society Ltd. does not fall within the meaning of co-operative 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. This is issued 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 co-operative bank, section 80P(4) of the Act would not apply to it. In view of such clarification, we cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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