9911796707
TMI Blog2019 (7) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... ber For The Appellant : Mr OP Sharma, Mudit Nagpal and Vinod Tanwani For The Respondent And Cross-Objector : Mr Ashwin C Shah ORDER Per Bench : 1. This special bench has been constituted by the then Hon'ble President to decide the following questions:- "(1) Whether the assessee being a co-operative credit society, in view of its function in providing credit facilities to its members, is into the business of banking and is it not being impeded or hit by the provisions of section 80P(4) of IT Act 1961? Further, in view of section 5 of Banking Regulation Act, 1949 and section 2 of NABARD Act, 1981 whether this co-operative credit society is carrying on the Banking business, and for all practical purposes acting a co-operative bank? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. However as per sub-section (4) of section 80P of the Act, which came to be inserted by Finance Act, 2006 with effect from assessment year 2007-08, deduction under section 80P will not be available to any co-operative bank or primary cooperative agricultural and rural development bank with the principal object of providing long term credit for agricultural and rural development activities. Being of the view that the assessee was a cooperative bank other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank, the Assessing Officer held that the provisions of sub-section (4) of section 80P of the Act would be applicable to the assessee and disallowed the deduction claimed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kari Sangh Ltd., [2014] 225 Taxman 162/43 taxmann.com 431 (Guj.), wherein the court has repelled the contention of the revenue that section 80P(4) would exclude not only the cooperative banks other than those fulfilling description contained therein but also credit societies, which are not cooperative banks. In the facts of the said case, the assessee was a credit cooperative society and not a cooperative bank. The court held that the exclusion clause of sub-section (4) of section 80P of the Act would, therefore, not apply. The above decision would be squarely applicable to the facts of the present case. 6. The impugned order passed by the Tribunal being in consonance with the view adopted by this court in the above decision, does not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not apply in relation to any cooperative bank other than a primary agricultural credit society or a primary co-operative 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." 4. As per section 80P(4), the provisions of section 80P would not apply in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue has been considerably simplified by virtue of the Central Board of Direct Taxes Circular No. 133 of 2007, dated May 9, 2007. Circular provides as under : "Subject : Clarification regarding admissibility of deduction under section 80P of the Income-tax Act, 1961. 1. Please refer to your letter No. DCUS/30688/2007, dated March 28, 2007, addressed to the Chairman, Central Board of Direct Taxes, on the above given subject. 2. In this regard, I have been directed to state that sub-section(4) of section 80P provides that deduction under the said section shall not be allowable to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. For the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80P, therefore, would not apply." 5. The legal position is thus quite clear and unambiguous. As held by Hon'ble jurisdictional High Court, the benefit of section 80P(2)(a)(i) cannot be denied in these cases of co-operative credit societies, in view of their functions of providing credit facilities to the members, and the same is not hit by the provisions of section 80P(4) of the Act. The questions before us must be answered in favour of the assessee. The first question before us is answered in affirmative and in favour of the assessee, and the second question before us is answered in negative and in favour of the assessee. As this is the only issue in appeals before us, challenging the relief granted by the CIT(A), with the consent of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
