9911796707
TMI Blog2020 (3) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... against the order of the CIT(A), dated 17.06.2019. The relevant assessment year is 2016-2017. 2. The assessee has raised following grounds:- 1. The Assessee is a Souharda Credit Co-Operative Limited registered with Registrar of Co-Operative Societies, under the Karnataka Souharda Sahakari Act of 1997. 2. Activities of the Assessee were not regulated by RBI and also Part V of Banking Regulation Act are not applicable to Co - operative Society. 3. Co-Operative Societies are not permitted to use the word 'bank', 'banker', 'banking' and also Co-Operative Societies are not required to submit Annual return to RBI every year. 4. The Assessee is carrying on the business of accepting deposits, advancing loans etc. and that was confined to its members only. 5. The Area of Operation of the Assessee is limited to Bangalore only, as restricted by bye law of the Society. 6. The Learned Assessing Officer has erred in disallowing the deduction claimed, to the conclusion that the society is not eligible for Deduction u/s 80P of Income Tax Act. While disallowing Sec.80P to the Appellant Society the Assessing Officer has stated that the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative society is also regarded as co-operative society under the Act. Souhardas' also operate on the principle of cooperation and adopt the principles of co-operation. Cooperative Societies and Co-operatives are all founded on the principle of co-operation. Ultimately the Income Tax Appellate Tribunal SMC-C Bench has passed the order in favor of assessee and against the Revenue. B. My assessee also relies on the latest Income Tax Appellate Tribunal C Bench decision in the case of Udaya Souharda Credit Co-Operative Society Ltd Vs The Income Tax Officer, Ward 5(2)(4)-Bangalore (ITA No 2831/Bang/2017) dated 17th August, 2018. Here it has been held that it cannot be out rightly decided that the Co-Operative and Co-Operative Society registered under Karnataka Souharda Sahakari Act, 1997 and Karnataka Cooperative Societies Act, 1959 respectively are different or otherwise, and hence the matter is to be restored to the AO to ascertain the impact of registration under Souharda Act as Co- Operative and also to decide whether is eligible for deduction u/s 80P of the Act. Ultimately the Income Tax Appellate Tribunal C Bench has passed the order in favor of assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction u/s 80P(2)(a)(i). In the order it is clearly mentioned that interest income from bank deposits received by the society is the income attributable to carrying on the business of Society. Thus the addition made by AO needs to be deleted. 10. Any other ground of appeal which may be taken at the time of hearing with the previous approval of this Hon'ble Tribunal. PRAYER WHEREFORE, the Appellant Assessee most humbly prays that this Hon'ble Authority be pleased to : (a) SET ASIDE the Order dated 28-12-2019 passed by the Assessing Officer, Ward No.6(2)(1), Bangalore, vide No.ITBA/AST/S/143(3)/2018-19/1014489468(1); (b) SET ASIDE the Order dated 17-06-2019 passed by the learned Commissioner of Income Tax (Appeals) Bengaluru-6, in ITA No.10511/ClT(A)-6/Bangalore/2018-19; (c) DECLARE that the Assessee is entitled for deduction under Sec.80(P)(2)(a)(i) of the Income Tax Act, 1961, and consequently delete the additions of ₹ 19,15,582/- made by AO in his order dated 28-12-2019. 3. Briefly stated the facts of the case are that the assessee is a Co-operative Society registered under the Karnataka Souharda Sahakari Act, 1997. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . DR of revenue that the earlier Tribunal order rendered by the Division Bench of the Tribunal in the case of M/s. Udaya Souharda Credit Cooperative Society Ltd. (supra) should be followed in preference to the later decision of SMC bench of the Tribunal rendered in the case of Siddartha Pattina Souharda Sahakari Niyamitha Vs. ITO (supra), I find that in this later case, the SMC bench of the Tribunal has duly considered the earlier decision of the Division Bench of the Tribunal rendered in the case of M/s. Udaya Souharda Credit Co-operative Society (supra) and it is also noted that ld. CIT(A) and AO in that case has examined the whole issue in the light of Karnataka Souharda Sahakari Act, 1997. Because of this reason, it was held by the SMC bench of the Tribunal that issue has to be decided by the Tribunal and it cannot be remanded to the AO as was canvassed by the Revenue and hence, this argument has not merit that even now, the matter should be restored back to the AO for fresh decision although the SMC bench of the Tribunal has decided the issue. Regarding the judgment of Hon ble Allahabad High Court rendered in the case of CIT Vs. Hari Nath and Co. (supra) on which reliance was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned DR relied on a decision of the ITAT Bangalore Bench in the case of M/s. Millennium Credit Cooperative Society Ltd. Vs. ITO ITA Nos. 2606 2607/Bang/2017 in which the Tribunal followed the decision of ITAT Bangalore Bench in the case of M/s. Udaya Souharda Credit Co-operative Society Ltd. ITA No.2831/Bang/2017 order dated 17.8.2018 in which the issue whether souharda registered under the Karnataka Souharda Sahakari Act, 1997 can be regarded as co-operative society entitled to benefit of deduction u/s.80P(2)(a)(i) of the Act was remanded to the AO for fresh consideration. We are of the view that in the present case, the AO and CIT(A) have already considered this issue in the light of the Karnataka Souharda Sahakari Act, 1997 and therefore this issue has to be decided by me and cannot be remanded to the AO as was canvassed by the Revenue. 6. I have considered the rival submissions. Sec.2(19) defines cooperative societies for the purpose of the Act and the same is as follows: Definitions. 2. In this Act, unless the context otherwise requires,- (19) cooperative society means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of the governments. This committee, after a detailed study of the Cooperative Acts of various states, drafted a Model Cooperative Act in 1991 and Central Government recommended the state governments to adopt this. Accordingly, in 1997 a bill on parallel cooperative act was tabled in the state legislature of Karnataka. Demanding an early approval of this bill by both the houses of Karnataka Legislature, a committee Souharda Samvardhana Samithi under the chairmanship of Justice Rama Jois came into existence. It was due to the combined efforts of Sahakara Bharathi Karnataka and Souharda Samvardhana Samithi, The Karnataka Souharda Sahakari Act 1997 (KSSA, 1997) was passed in the legislature. With the consent of The President of India, it was enforced from January 2001. Preamble to the Act reads thus:- An Act to provide for recognition, encouragement and voluntary formation of Cooperatives based on self-help, mutual aid, wholly owned, managed and controlled by members as accountable, competitive, self-reliant and economic enterprises guided by cooperative principles and matters connected therewith; WHEREAS it is expedient to provide for recognition encouragement and voluntar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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