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TMI Blog2020 (3) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... r is thus permitted to file a statutory appeal challenging the order of assessment before the Commissioner of Income Tax (Appeals) within a period of three (3) weeks from today. No recovery of the demand in relation to issue (ii), that is, in relation to deduction claimed under Section 80P be enforced till such time the appeal is disposed by the first appellate authority. - Writ Petition No.5600 of 2020 WMP. Nos.6557 & 6558 of 2020 - - - Dated:- 5-3-2020 - THE HONOURABLE DR. JUSTICE ANITA SUMANTH For Petitioner : Mr.C.Prakasam for Mr.S.Karthikeyan For Respondent : Mr.A.P.Srinivas, Senior Standing Counsel ORDER Mr.A.P.Srinivas, learned Senior Standing Counsel accepts notice and is armed with instructions in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs were called upon to produce various details in support of their claims and a specific question raised for their response was as follows: '4. Is the society having associate/nominal member. If yes, whether the society is carrying on business with them? If so, please show cause why the deduction u/s.80P cannot be denied in view of the decision of the Jurisdictional ITAT in the case of M/s S1234 Udyapatti PACCS Ltd., Udyapatti P.O, Salem - 636 140 in ITA No.2332/Chny/2017. Wherein the ITAT followed the decision of Hon'ble Supreme Court in the case of Citizen Co-operative Society Ltd Vs. Assistant Commissioner of Income-tax, Circle - 9(1), Hyderabad reported in [2017] 84 taxmann.com 114 (SC) and denied deduction u/s.80P.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the judgement, where a distinction is made between Nominal Members and Ordinary Members. Paragraph 24 reads as follows: 'Undoubtedly, if one has to go by the aforesaid definition of 'co-operative bank', the appellant does not get covered thereby. It is also a matter of common knowledge that in order to do the business of a co-operative bank, it is imperative to have a licence from the Reserve Bank of India, which the appellant does not possess. Not only this, as noticed above, the Reserve Bank of India has itself clarified that the business of the appellant does not amount to that of a co-operative bank. The appellant, therefore, would not come within the mischief of sub-section (4) of Section 80P.' 27. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led challenging the order of the Division Bench in Ammapet (supra) (Special Leave to Appeal (c) No.17745 of 2019 dated 17.01.2020), wherein the Department has withdrawn the Special Leave Petition on account of low tax effect. The question of law has been kept open. In such circumstances, the order of the Division Bench of this Court would hold the field till such time it is modified or reversed. The relevant portion of the order is as follows: '12. Admittedly, the assessee society is registered under the provisions of the TNCS Act. It defines the word 'members' under Section 2(16) to mean a person joining in the application for the registration of society and a person admitted to the membership after registration in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral and rural development activities'. What was excluded was the 'cooperative banks' and admittedly, the assessee society is a primary agricultural cooperative credit society and therefore, would be entitled to the benefit of Section 80P of the Act. 15. Further, for the assessment year 2014-15, the decision in the case of Citizen Cooperative Society Limited was relied upon by the Revenue before the Tribunal, which, in paragraph 6.1 of its order dated 28.2.2018 for the assessment year 2014-15, extracted the operative portion of that judgment. In that case, the Hon'ble Supreme Court found that the society carried on certain activities, which were contrary to the provisions of the Andhra Pradesh Mutually Aided Cooperative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances, the Assessing Officer fell into an error in not granting any relief to the assessee society, which was rightly granted by the CIT (A) as confirmed by the Tribunal. In addition to that, the Assessing Officer has not pointed out that loans have been disbursed to all and sundry in terms of the provisions of the TNCS Act and in terms of Clause (b) to Sub-Section (4) of Section 80P of the Act, the society has an area of operation, operates within the taluk and will provide long term credit for agricultural and rural development activities as well. The CIT (A) rightly granted the relief to the assessee as confirmed by the Tribunal. We do not find any good ground to entertain these appeals. 18. Accordingly, the above tax case appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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