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TMI Blog2018 (12) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... t. In coming to this finding the Assessing Officer submitted that the decision of the Hon'ble Karnataka High Court in the case of Billuru Gurubasava Pattina Sahakari Sangha Niyamitha (2014) 369 ITR 86 (Kar) relied on by the assessee has not been accepted by the Department and further appeal has been filed before the Hon'ble Apex Court which is pending. 2.2 Aggrieved by the order of assessment dated 23.12.2016 for Assessment Year 2014-15, the assessee filed an appeal before the CIT (Appeals). The CIT (Appeals) partly allowed the assessee's appeal vide the impugned order dt.22.01.2018 for Assessment Year 2014-15. While disposing the aforesaid appeal, the learned CIT (Appeals), inter alia, allowed the assessee's claim for deduction u/s 80P of the Act and deleted the disallowance made by the Assessing Officer (AO) in this regard following the judgment of the Hon'ble Karnataka High Court in the case of CIT Vs. Billuru Gurubasava Pattina Sahakari Sangha Niyamitha (supra). 3. Aggrieved by the order of the CIT (Appeals), Gulbarga dt.22.1.2018 for Assessment Year 2014-15, Revenue has preferred this appeal before the Tribunal wherein it has raised the following grounds :- 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partmental Representative contends that in view of the above, the assessee has wrongly represented itself as a co-operative society for claiming deduction under Section 80P of the Act; since the deduction there under is allowed only to co-operative societies and not to co-operatives registered under the Karnataka Souharda Sahakari Act, 1997. The learned DR further contended that Co-operative and Co-operative Societies are 2 different entities. If the co-operative wants to convert itself into a Co-operative society, it has to be converted as per the Amending Act 13/2004 which provides conversion of Co-operative under the Karnataka Souharda Act, 1997 into Co-operative Society. In the Cooperative Society Act, the Co-operative has also been defined according to which the co-operative means a co-operative registered under the Karnataka Souharda Sahakari Act, 1997 (Karnataka Act 17 of 2000) and includes union co-operative and the federal co-operatives. The learned DR further invited our attention to the Karnataka Souharda Sahakari Act also in which the co-operative word has been defined in clause 2(e) according to which co-operative means a Co-operative including a cooperative bank doing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein it was held that where the assessee being a cooperative society advances loan to members of general public without any approval from the Registrar of Societies, the activity of the Co-operative Society is in violation of co-operative societies Act and the co-operative credit society was not entitled to deduction under section 80P(2)(i)(a) of the Act. 8. Now, during the course of hearing of the appeals, the learned DR has raised a few valid points which cannot be outrightly ignored. The learned DR has specifically raised an issue that assessee is only a co-operative registered under the Karnataka State Souharda Sahakari Act. Since the assessee is not a co-operative society, it is not entitled/eligible for deduction under section 80P(2) of the Act. Though this argument was raised first time before the Tribunal at this stage, but when it is a legal argument and goes to the root of the case, it cannot be outrightly ignored. Therefore, we have to examine the argument raised by the learned DR in this regard. Under section 80P, the deduction is to be allowed only to the cooperative societies as per sub section 1 of the Act. In the entire section 80P, the word used is only a "coope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1959, when a certificate of registration is issued to a Co-operative after conversion of a Cooperative society into a Co-operative, the registration of such Co-operative society under the Karnataka Co-operative Societies Act, 1959, shall be cancelled by the Registrar with effect from the date of issue of certificate of registration under this Act." 11. Similarly, if the co-operatives intend to convert into co-operative societies, conversion is also possible as per Amending Act 13/2004. In the co-operative societies Act, the word cooperative societies and the Co-operatives has also been defined under section 2(c) and 2 (d)(2), according to which co-operative society means a society registered or deemed to be registered under the co-operative societies Act and the co-operative means co-operative registered under the Karnataka Souharda Sahakari Act, 1997. Therefore, from careful reading of both the sections, it is abundantly clear that the co-operative and the co-operative societies are 2 different entities though their conversion from one to other is possible as per provisions of the respective Act. 12. We have also carefully examined the certificate of registration granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CIT(A) and restore the matter to the AO to reexamine all these aspects by making necessary enquiry and investigation and also by passing a reasoned order in this regard. Since we have restored the matter to the AO, we find no justification to adjudicate the issue raised on merit. Accordingly, order of the CIT(A) is set aside and matter is restored to the AO for adjudication of the impugned issue in terms indicated above." 6.2 Respectfully following the decision of the co-ordinate bench of this Tribunal in the case of Udaya Souharda Credit Co-operative Society Ltd. in ITA No.2831/Bang/2017 dt.17.8.2018, we accordingly set aside the impugned order of the CIT (Appeals) for Assessment Year 2014-15 and restore the matter of the eligibility of the assessee's claim for deduction under Section 80P(2) of the Act to the file of the Assessing Officer for reexamination of all aspects thereof by causing necessary enquiries to be made in the matter and to adjudicate thereon by way of a reasoned and speaking order in term of the observations and directions issued by the co-ordinate bench in the case of Udaya Souharda Credit Co-operative Society Ltd. (supra). Since the impugned order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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