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TMI Blog2017 (8) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... round is not only illogical but also not supported by the facts of the case. Moreover as seen, the recommendation made by the Assessing Officer to the learned Commissioner of Income-tax in their internal correspondence is extracted as a ground. This also indicates non-application of mind either by the Assessing Officer or by higher authority like Commissioner of Income-tax. - Decided in favour of assessee. - ITA Nos.1581 And 1582/Hyd/2016 - - - Dated:- 31-7-2017 - Smt. P. Madhavi Devi, Judicial Member And Shri S.Rifaur Rahman, Accountant Member For The Assessee : Shri K.A. Sai Prasad For The Revenue : Shri L. Ramji Rao, DR ORDER Per Smt. P. Madhavi Devi, J.M. Both the above appeals are filed by the assessee for the A.Ys 2012-13 2013-14 respectively. At the outset it is noticed that there is a delay of 9 days in filing of the above appeals and the assessee has filed an application for condonation of delay along with an affidavit of the Counsel for the assessee, Shri K.A. Sai Prasad. It is stated in the affidavit that the papers of the Assessee s Society along with challans were handed over to him on 14/11/2016 but to misplacement of the relevant pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has deposited its funds, has been claimed as a deduction u/s 80P of the Act. He submitted that similar issue had arisen in the case of Ranga Reddy Judicial Employees Mutually Aided Co-operative Credit Society Ltd and the Coordinate Bench of this Tribunal vide orders dated 4.3.2015 as reported in (2015) 60 Taxmann.com 261 has considered the issue at length and has allowed the appeal. He also placed reliance upon the decision of the Hon'ble Madras High Court in the case of Salem Agricultural Cooperative Marketing Societies Ltd wherein similar issue has been considered and allowed. The other decisions relied upon by him are as under: (i) ACIT vs. Metrocity Criminal Courts Employees Mutually Aided Cooperative Credit Society Ltd (ITA Nos.1328, 1329 1330/Hyd/2012 dated 4.3.2015). (ii) ACIT vs. The Advocates Mutually Aided Coop Society Hyderabad (ITA No.546, 547 others dated 20.02.2015) (iii) Order by the CIT (A)-VI Hyderabad dated 28.12.2011 in the case of R.R. Distt. Judicial Employees Mutually Aided Coop. Credit Society Ltd. 6. The learned DR, on the other hand, supported the orders of the authorities below and placed strong reliance on the findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) at ₹ 14,66,822 and section 80P(2)(d) of ₹ 14,61,250 in the assessment year 2008-09. Similarly, in other years also, the deductions were quantified and directed to be allowed by the Commissioner of Income-tax (Appeals) in the order. The Revenue has raised the following grounds commonly for the assessment years 2008-09 and 2009-10 : 1. The observation of the learned Commissioner of Income-tax (Appeals) that the assessee is a co-operative society does not emanate from the assessment order as she has failed to give a clear finding whether the assessee is a cooperative society though it has violated the principles of the Andhra Pradesh Mutually Aided Cooperative Societies Act (APMACSA), 1995. 2. The observation of the Commissioner of Income-tax (Appeals) is misplaced with regard to deduction under section 80P(2)(a)(i), is even otherwise given to the assessee even if it accepts deposits from non-members. 3. The principle of mutuality relied upon by the Assessing Officer emanate to distinguish that the assessee has violated the principles of mutuality, which the Commissioner of Income-tax (Appeals) fails to comprehend. Having established on record that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative societies and the co-operative banks. We are unable to understand why the co-operative banks are not considered as co-operative societies in banking business. The sub-section (4) introduced by the Finance Act, 2006 with effect from April 1, 2007 is as under : '(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 cooperative agricultural and rural development bank. Explanation. - For the purposes of this sub-section,- (a) 'co-operative bank' and 'primary agricultural credit society' shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949). (b) primary co-operative agricultural and rural development bank' means a society having its area of operation confined to a taluk and the principal object of which is to provide for long-term credit for agricultural and rural development activities.' 29. As per this section, the exemption provided under sub-section (2) or sub-section (3) does not apply to the incomes of the co-operative bank other than a primary agricultural co-operative society or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y but the full text of the bye laws are not placed on record. We had an occasion to examine the bye laws of the Advocates Mutually Aided Coop Society, Hyderabad , wherein it was noticed that bye law (3)(iv)(b) defines associate member and nominal member to mean other than shareholder of the society. Even the learned Commissioner of Income-tax (Appeals) gives a finding that the associate members and nominal members are not regular members, but the deposits from non-members does not prevent the co-operative society in claiming deduction under section 80P. When the bye laws distinguish a member and nominal member/associate member, the later being not a shareholder of a society, deduction under section 80P cannot be allowed to the extent of incomes/ profits and gains on providing credit facilities to associate members and nominal members. There may be restrictions that the society shall not induct more than a certain number of members as associate members/ nominal members. When the bye laws pertaining to membership define that the members of the co-operative society and nominal/associate members cannot be treated shareholder/member, as they having ..... X X X X Extracts X X X X X X X X Extracts X X X X
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