9911796707
TMI Blog2021 (10) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Banking Regulation Act, 1949? (ii) On the facts and circumstances of the case and law, the Ld. CIT(A) erred in not appreciating the fact that the sub clause (viia) to clause 24 of Section 2 of the Act clearly indicate that profits and gains of any business of banking (including providing credit facilities) carried on by a cooperative society with its members is income of the cooperative society providing credit facilities to its members. (iii) The appellant craves leave to amend, modify and alter any grounds of appeal during the course of hearing of this case." 2. Briefly stated, the assessee which is a co-operative credit society had e-filed its return of income for A.Y. 2013-14 on 27.09.2017, declaring an income of Rs. 2,73,760/-. The case of the assessee was thereafter selected for scrutiny assessment u/s 143(2) of the Act. 3. Assessment was thereafter framed by the A.O vide his order passed u/s 143(3), dated 18.09.2015, wherein after declining the assessee‟s claim for deduction of Rs. 1,36,39,920/- u/s 80P of the Act, its income was determined by the A.O at Rs. 1,39,13,680/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). Observi ..... 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) of the Act. However, the aforesaid view taken by the A.O was vacated by the CIT(A). On further appeal by the revenue, the Tribunal relying on a plethora of the judicial pronouncements/orders had upheld the view taken by the CIT(A) and concluded that the assessee‟s claim for deduction u/s 80P(2)(a)(i) was in order. The Tribunal while concluding as hereinabove had observed as under: "3. In brief, the relevant facts are that the respondent assesee is a Co-Operative Society registered under the Maharashtra Co-Operative Societies Act, 1960. The society is run by the employees of Bharat Petroleum Corporation Ltd. and its main activity is providing credit facilities to its members only, who happen to be the employees of Bharat Petroleum Corporation Ltd. The society is giving loans to its members and also accepting deposits from its members. In the return of income filed for A.Y. 2010-11, it declared a gross total income of Rs. 80,98,490/- which was claimed as exempt in terms of Section 80P(2)(a)(i) of the Income Tax Act, 1961. The A.O. denied the claim of the assessee for exemption under Section 80P(2)(a)(i) of the Act on the basis of the provisions of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of CIT vs. Jafari Momin Vikas Co. Op. Credit Society Ltd. [2014] 362 ITR 331 (Guj). In this context the following discussion in the judgment of Hon‟ble Gujarat High Court is relevant:- "The Assessing Officer held that by virtue of section 80P(4), the respondent-assessee would not be entitled to the benefits of deduction under section 80P. The Commissioner (Appeals) as well as the Tribunal reversed the decision of the Assessing Officer on the premise that the respondent-assessee not being a bank, exclusion provided in sub-section (4) of section 80P would not apply. This, irrespective of the fact that the respondent would not fall within the expression "primary agricultural credit society". Had this been the plain statutory provisions under consideration in isolation, in our opinion, the question of law could be stated to have arisen. When, as contended by the assessee, by virtue of sub-section (4) only co-operative banks other than those mentioned therein were meant to be excluded for the purpose of deduction under section 80P, a question would arise why then the Legislature specified primary agricultural credit societies along with primary co-operative agricultural and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not apply. In the result, the tax appeals are dismissed. 7. Apart from this, the Hon‟ble Karnataka High Court in the case of CIT vs. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha in Income Tax Appeal No. 5006/2013 dated 5th February, 2014 also considered a similar issue. The following discussion in the judgment of Hon‟ble Karnataka High Court is relevant:- "Section 80P of the Act deals with the deduction of income of a society. In the case of any assessee being a Co-operative society, the whole of the amounts of profits and gains of business attributable to any of other activities referred to sub-section (2) of Section 80P shall be deducted in computing the total income of the assessee. In other words, the said income is not taxable. It is a benefit given to the Co-operative society. Section 80P(4) was introduced by Finance Act, 2006 with effect from 01.04.2007 excluding the said benefit to a Co-operative Bank. The said provision reads as under:- "(4) The provisions of this section shall not apply in relation to any cooperative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. (a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
