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TMI Blog2020 (1) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... T R. Narayana Pisharadi, J The appellants/assessees are Co-operative Societies registered under the Kerala Co-operative Societies Act, 1969. The issue raised in these appeals relates to their claim for deduction under Section 80P(2) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). 2. The claim for deduction under Section 80P (2) of the Act made by the appellants was denied by the Assessing Officer by treating them as Co-operative Banks and not as Primary Agricultural Credit Societies. Aggrieved by the assessment orders thus passed by the Assessing Officer, the appellants filed appeals before the Commissioner of Income Tax (Appeals). The appellate authority, by following the judgment of this Court in Chirakka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovides that where, in the case of an assessee being a cooperative society, the gross total income includes any income referred to in sub-section (2) of that section, there shall be deducted, in accordance with and subject to the provisions of Section 80P, the sums specified in sub-section (2) thereof, in computing the total income of the assessee. Sub-section (4) of Section 80P provides that the provisions of Section 80P shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. 6. In Chirakkal Service Co-operative Bank (supra), a Division Bench of this Court held that, societies having been classified as Primary Agricultural Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has to extend the benefits available, merely looking at the class of the society as per the certificate of registration issued under the Central or State Co-operative Societies Act and the Rules made thereunder. On such a claim for deduction under Section 80P of the ITAct, the Assessing Officer has to conduct an enquiry into the factual situation as to the activities of the assessee society and arrive at a conclusion whether benefits can be extended or not in the light of the provisions under sub-section(4) of Section 80P". The Full Bench has further held as follows: "Moreover, the law laid down by the Division Bench in Chirakkal is not good law, since, in view of the law laid down by the Apex Court in Citizen Cooperative Society, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , what shall be considered is whether it is a co-operative bank within the meaning of Part V of the Banking Regulation Act, 1949 and that the criteria shall not be as stated by the Full Bench of this Court in Mavilayi (supra). 10. The aforesaid contention is misconceived. Clarificatory circulars are issued by Government departments for the guidance of the officers. Such circulars or instructions do bind the department and its officers. But they do not bind the Court in interpretation of statutory provisions. Circulars issued by a Government department cannot have any primacy over the decision of the jurisdictional High Court. Circulars and instructions thus issued will not survive, if they are contrary to the decision of a Constitutional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court or a High Court". 12. In Commissioner of Central Excise v. M/s Ratan Melting Wire Industries: (2008) 13 SCC 1, the Constitution Bench has held as follows: "Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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