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TMI Blog2021 (3) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... term Co-operative Society . AO in the impugned assessment order had clearly held that the assessee is providing credit facilities to its members and interest paid to members on their deposits. As further stated by the A.O. that the entire interest income received is out of operational income of the assessee. As mentioned earlier, the solitary reason for denying the claim of deduction u/s 80P(2) was that the assessee cannot be termed as a cooperative society coming within the definition of section 2(19) since it is registered under the Karnataka Souharda Sahakari Act, 1997. Since have held in view of the above judicial pronouncement that the assessee is a cooperative society though it is registered under the Karnataka Souharda Sahakari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s 80P(2) of the I.T.Act. The first appellate authority was of the view that since the assessee is registered under the Karnataka Souharda Sahakari Act, 1997, the same cannot be termed as a Co-operative Society coming within the definition of section 2(19) of the I.T.Act, and hence, deduction u/s 80P(2) cannot be granted. 5. Aggrieved by the order of the CIT(A), the assessee has preferred this appeal before the Tribunal. The learned Counsel for the assessee submitted that the issue in question is squarely covered by the judgment of the Hon ble Karnataka High Court in the case of M/s.Swabhimani Souharda Credit Co-operative Ltd. v. Government of India reported in 421 ITR 670 (Kar.). This judgment of the Hon ble High Court was followed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal in the case of Siddartha Pattina Souharda Sahakari Niyamitha v. ITO in ITA No.1234/Nang/2019 (order dated 26.07.2019). The relevant finding of the Tribunal reads as follow:- 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) co-operative society means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies ; 7. As can be seen from the aforesaid definition of Co-operative society under the Act, any co-opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continued almost until early 1980s. 9. Keeping this in mind, the Central Government setup a committee under the Chairmanship of Shri Ardhanarishwaran, which submitted its report in 1987. It attributed the failure of the cooperative movement to the excessive interference of the governments. It is also true that the unabated party politics in the co-operative movement is also a big hindrance to its progress. Realizing the vital role of the cooperative movement in the progress of the society, the Central Planning Commission set up a committee by appointing Shri Chaudari Brahmaprakash as its head with a task of drafting a Model Cooperative Act which will prevent interference of the governments. This committee, after a detailed study ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. The Souharda Cooperatives enjoy functional autonomy in design and implementation of their Business plans, customer service activities, etc., 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 cooperatives are different and that co-operative registered as Souharda Sahakari cannot be regarded as co-operati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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