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TMI Blog2021 (4) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 05.04.2018, the AO has not provided reasons in writing as to why the income chargeable to tax has escaped assessment for the year in question. As the AO has not adhered to strict procedure mandated by the law in this regard, the notice and the assessment order both have to be disregarded and set aside. 4. Without prejudice to the above, the Learned AO has wrongfully initiated action under section 147 beyond four years from the end of the relevant assessment year, without satisfying the requirements of the first proviso thereunder. Therefore, the notice issued u/s 148 has no force of law, lacks jurisdiction and is liable to be set aside. 5. The appellant craves leave to add, alter, substitute and/or delete any or all of the grounds of appeal urged above. 6. For the above and other grounds to be urged during the hearing of the appeal, the Appellant prays that the appeal be allowed in the interest of equity and justice. 2. With regard Common issues in these appeals are with regard to deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 (hereinafter called 'the Act'). The other ground in ITA No.128/Bang/2020 for Assessment Year 2011-12 is with regard to reopeni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he is also in agreement with the proposition put forward by the bench but when the matter is restored back to the file of CIT(A), he Should be directed to examine the applicability of the judgement of Hon'ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT as reported in 397 ITR 1 also because as per page no. 15 of the paper book, it is shown in the Income and Expenditure Account of the assessee for the present year that assessee has received an amount of Rs. 11 700/- towards Nominal Membership Fee and therefore, it has to be seen as to whether the full amount or part amount of interest income for which deduction is claimed u/s 80P is earned by the assessee from the nominal members or not in the present year and therefore, the issue regarding the applicability of this judgement of Hon'ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT (supra) should also be examined by CIT(A). In the rejoinder, the, ld. AR of assessee also agreed that the CIT (A) may be directed to examine the facts of present case in the light of this judgement of Hon'ble Apex Court also. 4. In view of the above discussion, I set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed deduction u/s 80P of the I.T.Act, which was disallowed by the Assessing Officer by observing as under:- "4.1 The AO during the course of scrutiny proceedings has observed that he claimed a deduction ofRs. 54,lB,036/- u/s 80P(2).According to the AO, the benefit of deduction u/s.80P(2)(a)(i) of the Act was available only to a co- operative society and since the Assessee is only a Souharda Sahaks registered under the Karnataka Souharda Sahakari Act, 1997 and sinnce under the said Act, Co-operative Societies are not being registered, the Assessee should not be allowed the benefit of deduction u/s.80P(2)(a)(i) the Act. According to the AO, Cooperative and Co-operative Societies are different entities. If the cooperative wants to convert itself into a co- operative society, it has to be converted as per the amended provisions Karnataka Souharda Sahakari Act,1997 as amended by Act 13/2004. Similarly, under the Karnataka Cooperative Societies Act, 1959 'Co-operative' has been defined according to which the cooperative means co-operative registered under the Karnataka Souharda Sahakari Act 1997. The AO has made reference to the fact that under the Karnataka Souharda Sahakar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in subsection (2) in computing the total income of the assessee." The other provisions of this section being not of much relevance to the question being treated, are not reproduced, although they too have been looked into. Sec. 2( 19) which finds a place in the Dictionary Clause of the 1961 Act reads as under: '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;' The provisions of sec. 80P are enacted by the Parliament for promoting the co-operative movement in the Country in tune with what Father of the Nation Mahatma Gandhi preached to the countrymen; this Section needs to be liberally construed ' to effectuate the legislative object of encouraging & promoting the growth of co-operative movement vide Kanga: & Palkhivala's The Law and Practice of Income Tax, 10th Edition, LexixNexis at p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tnership between cooperatives and also collaboration between co-operatives and other institutions; 4. registration of' co-operatives, union co-operatives and Federal Co-operative in furtherance of the objectives specified above; 5. Conversion of co-operative societies registered under the Karnataka Co-operative Societies Act, 1959 as a cooperative under the proposed legislation. Hence the Bill." (e) the preamble to the 1959 Act reads as under: '((Whereas it is expedient (to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies) in the State of Karnataka; Be it enacted by the Karnataka State Legislature in the Tenth Year of the Republic of India as follows-" Similarly, the preamble to the 1997 Act reads as follows: «Whereas it is expedient to provide for recognition, encouragement and voluntary formation of co-operatives based on self-help) mutual aid, wholly owned, managed and controlled by members as accountable, competitive, self-reliant and economic enterprises guided by co-operative principles and for matters connected 'therewith; Be it enacted by the Karnataka. State Legis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;co-operation'; as already mentioned above both the 1959 Act and the 1997 Act employ this terminology; the 1997 Act is woven with the principles of co-operation; sec.4 of this Act bars registration of an entity unless its main objects are to serve the interest of the members in the area of co-operation and its bye-laws provide for economic and social. betterment of its members through self-help and mutual in accordance with the co-operative principles; this apart, even sub-section (2) of sec.4 is heavily loaded with cooperative substance. In the above circumstances, these writ petitions succeed; a declaration is made to the effect that the entities registered under the Karnataka Souharda Sahakari Act, 1997 fit into the definition of "co-operative society" as enacted in sec. 2(19) of the Income Tax Act, 1961 and therefore, subject to all just exceptions, petitioners are entitled. to stake their claim for the benefit of sec.80P of the said Act; a Writ of Certiorari issues quashing the impugned notice dated 30.03.2018 other legal consequences accordingly do follow. It is needless to mention that the other provisions of sec.80P of 1961 Act and their effect on the claim of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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