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TMI Blog2019 (8) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... e in favour of the assessee. AO is directed to extend the benefit of deduction under Section 80P(1) read with Section 80P(2)(a)(i) of the IT Act to the appellant/assessee. - Tax Case Appeal Nos.485 & 486 of 2019 & CMP.No.15232 of 2019 - - - Dated:- 22-7-2019 - Mr. Justice T.S. Sivagnanam And Mrs. Justice V. Bhavani Subbaroyan For the Appellant : Mr.T.Ramesh For the Respondent : Mr.M.Swaminathan, SSC Mrs.V.Pushpa, JSC Mrs.S.Premalatha, JSC COMMON JUGMENT T .S.SIVAGNANAM, J. We have heard Mr.T.Ramesh, learned counsel for the appellant and Mr.M.Swaminathan, learned Senior Standing Counsel, Mrs.V.Pushpa, learned Junior Standing Counsel and Mrs.S.Premalatha, Junior Standing Counsel accepting notice for the respondent. 2. These appeals, filed by the assessee under Section 260A of the Income Tax Act, 1961 (for short, the Act), are directed against the orders (i) dated 31.8.2018 made in MP.No.90/Chny/2018 in ITA.No.2332/ Chny/2017 and (ii) dated 27.3.2018 made in ITA.No.2332/Chny/2017 respectively, on the file of the Income Tax Appellate Tribunal, Chennai 'C' Bench for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nadu Cooperative Societies Act, whether the Appellate Tribunal is correct in rejecting the deduction claimed by the appellant under Section 80P(2)(a)(i) of the Income Tax Act? 7. It is not disputed by the learned counsel on either side that the substantial question of law entertained in this appeal was considered by us in the decision in the case of AA 713 the Kodumudi Growers Cooperative Bank Ltd. Kodumudi Vs. ITO, Ward-II(1), Erode [TCA.No.1453 of 2008 dated 31.10.2018] wherein the assessee was a cooperative society and a similar view was taken by the Tribunal as in the impugned order. We allowed the appeal filed by the assessee in the said judgment wherein the relevant portions read thus : .............. 7. Thus, we are called upon to decide as to whether the assessee is entitled for deduction under Section 80P(2) of the IT Act in respect of the income earned from the sale under the PDS. 8. It is not in dispute that the fair price shops were set up pursuant to the direction issued by the Government of Tamil Nadu and communicated through the District Collector. The assessee, while filing the appeal befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Senior Standing Counsel for the Revenue, we have perused the registered By-laws of the society, from which, we find that under By-law No.3, the activities of the society are mentioned. By-law No.3 contains two Sub-Clauses namely (a), which deals with main activities of the appellant society and (b), which deals with ancillary activities of the appellant society. The activity of establishing a fair price shop clearly falls within the scope of By-law No.3(b)(2). Furthermore, the directives issued by the Government of Tamil Nadu, as communicated by the Registrar of Cooperative Societies, are binding on the appellant society. Hence, it cannot be said that the appellant carried on an activity, which was not authorized to be conducted by a credit society. 14. One more argument is advanced by the learned Senior Standing Counsel for the Revenue by contending that there were two categories of people, to whom the items under the PDS were sold. 15. We find that this argument is wholly unsubstantiated and factually incorrect. In this regard, we have earlier referred to the grounds of appeal as well as the written submissions given by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; has been interpreted by the Hon'ble Supreme Court to cover even the rent charged by the banks for hiring out safe deposit vaults to its customers and that in the circumstances, income earned by the assessee bank by way of commission/fees from its customers, being public sector undertakings, would be exempt under Section 80P(2)(a)(i) of the IT Act. Further, the Division Bench pointed out that such view was supported by Section 6(1)(b) of the Banking Regulation Act, 1949, which stated that in addition to the business of banking, a banking company may engage itself as agent for Government or Local Authority or any other person for giving receipts and discharges that is to say for collecting electricity bills from the customers for and on behalf of the Electricity Board and other organizations. 17. The case on hand is factually a better case since the By-laws themselves provide for such an activity as an ancillary activity by the cooperative society. Furthermore, the appellant society is bound by the directives issued by the Government as well as the Registrar of Cooperative Societies. In the instant case, the Revenue has not disputed the fact that the fair pric ..... X X X X Extracts X X X X X X X X Extracts X X X X
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