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TMI Blog2019 (12) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax effect relating to each ground of appeal (see note below) 1. The learned Assessing Officer's order is opposed to the Facts of the case and law. - 2. Because, the learned Commissioner of Income Tax (Appeals) erred in law as well as on facts while deciding, the assessee as ineligible to claim deduction claimed under section 80P(2)(a)(i) of the Income Tax Act, 1961. ₹ 10,94,809/- 3. Because, the learned lower authorities have erred in denying the deduction claimed under section 80P(2)(a)(i) of Income Tax Act, 1961. - 4. The assessee craves leave to add / alter any of the grounds of appeal before or at the time of hearing. - Total tax effect (see note below) ₹ 10,94,809/- 3. It was submitted by ld. AR of assessee that as per para no. 4.4 of the order of ld. CIT(A), the issue was decided by ld. CIT(A) on this basis that in preference to the order of the SMC bench of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Hon ble Karnataka High Court Dharwad Bench dated 23.10.2017 rendered in the case of Pr. CIT Vs. Vijay Souharda Credit Sahakari Ltd. in ITA No. 100056/2016 and pointed out that in this case, it was held by Hon'ble Karnataka High Court that no finding is forthcoming regarding the aspect of the activities carried out by the assessee, whether as a co-operative society or not and the matter was restored back to the AO for fresh decision after examining this aspect as to whether the assessee comes within the realm of co-operative society to get entitlement of deduction u/s. 80P(2)(a)(i) of the IT Act and it is also directed that the AO should examine the applicability of the judgment of Hon ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT as reported in 397 ITR 1. 4. I have considered the rival submissions. Regarding the judgment of Hon'ble Karnataka High Court rendered in the case of Pr. CIT Vs. Vijay Souharda Credit Sahakari Ltd. (supra) on which reliance was placed by ld. DR of revenue as per which the matter was restored back to AO to examine the applicability of the judgment of Hon ble Apex Court rendered in the case of The Citi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench or Division Bench. As per the subsequent decision of the SMC Bench of the Tribunal, it was held that as per the earlier decision of the Division Bench of the Tribunal, the matter was restored back to the AO for a fresh decision in the light of Karnataka Souharda Sahakari Act, 1997 and this was done by CIT (A) and AO as directed by the tribunal and because of this reason, SMC bench of the Tribunal held that now the issue has to be decided by the Tribunal at its own level instead of again restoring the matter back to the file of AO and after considering the various provisions of Karnataka Souharda Sahakari Act, 1997, the SMC Bench of the Tribunal came to the conclusion that souharda co-operatives are also one form of co-operative societies registered under a law in force in the State of Karnataka for registration of co-operative societies and therefore, the conclusion of the revenue authorities that co-operative societies and co-operatives are different and that co-operative registered as Souharda Sahakari cannot be regarded as co-operative societies is unsustainable. After holding so, the Tribunal restored back the matter to the AO for fresh decision regarding allowability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ves are all founded on the principle of cooperation. 8. Since the beginning of mankind the concept of co-operation has been the foundation for harmonious existence In India, the Cooperative Societies Act 1912 regulated formation, management, winding up and other supervision by the Government etc. This Act became the model for the provincial governments to form their own Cooperative Acts. Post-Independence, various state governments framed their own independent Cooperative Acts and the Central Government its Multi-State Cooperative Act. Accordingly, Karnataka State Cooperative Societies Act, 1959 (KSCS Act, 1959) regulates Cooperative societies in the state of Karnataka. A Panchayat, a Cooperative society and a School for every village were considered as the three pillars of the integrated community development. As time passed by, other aspects were included into the Cooperative act thus heralding the resurgence of a new era in cooperative movement. The state and the central governments were investing millions of rupees in the form of shares, grants, subsidy, contributions, government support, etc., but the expected results couldn t be achieved in cooperative movements. This co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on the needs of their members. Unlike other forms of cooperatives in India, the interference of State / Central in day-to-day operations of Souharda Cooperatives is almost minimal. 11. The above discussion would show that souharda co-operatives are also one form of co-operative societies registered under a law in force in the State of Karnataka for registration of co-operative societies. Therefore, the conclusion of the revenue authorities that co-operative societies and co-operatives are different and that co-operative registered as Souharda Sahakari cannot be regarded as co-operative societies is unsustainable. We therefore hold that the Assessee should be allowed deduction u/s.80P(2)(a)(i) of the Act, as the ground on which the same was denied to the Assessee is held to be incorrect. However, the other conditions for allowing deduction u/s. 80P(2)(a)(i) of the Act needs to be examined by the AO. I, therefore, remand the question of allowing deduction u/s. 80P(2)(a)(i) of the Act to the AO, except the issue already decided above. 4. Respectfully following this Tribunal order, I hold that the assessee s claim regarding deduction u/s. 80P(2)(a)(i) cannot be rejected on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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