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TMI Blog2021 (12) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that instead of following the assessee's own case and dismissing the appeals of the assessee or alternatively follow Mavilayi Service Co-operative Bank Ltd. without examination of a few details and grant the status of Society for enabling the assessee for deduction under Section 80P(2), the matter requires to be reconsidered by the Tribunal. These questions could be answered in favour of the assessee to the limited extent that the matter requires reconsideration by the Tribunal on the claim of assessee as a Co-operative Society and the entitlement to deduction under Section 80P(2) of the Act. The assessee and the Department are given liberty to place additional materials, now brought on record in the appeals before the Tribunal for decision and consideration. - ITA NO. 30 OF 2017, 2 OF 2017, 6 OF 2017, 31 OF 2017 - - - Dated:- 24-9-2021 - THE HONOURABLE MR.JUSTICE S.V.BHATTI AND THE HONOURABLE MR.JUSTICE VIJU ABRAHAM APPELLANTS: SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPT AND SRI.K.M.V.PANDALAI INCOME TAX DEPARTMENT RESPONDENTS: ADVS. JOSE JACOB AND JAZIL DEV FERDINANTO OTHER PRESENT: SC CHRISTOPHER ABRAHAM JUDGMENT S.V. Bhatti, J. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate that the Appellant, not being a primary cooperative bank, central cooperative bank or a state cooperative bank, is not a cooperative bank and accordingly cannot be denied the benefit conferred on a cooperative society under Section 80P of the Act? c. Whether on the facts and in the circumstances of the case, and in law the Appellate Tribunal was justified in treating the Appellant as a 'co-operative bank' and denying the benefit under Section 80P(2)(a)(i) of the Act, without considering the Information received under RTI from the Registrar of Cooperative Societies and NABARD stating that the Appellant is not a 'co-operative bank' and instead is a 'State Land Development Bank' in accordance with Section 2(v) of NABARD Act, 1981 or a 'Co-operative Credit Society' in accordance with Section 5(ccii) of Part V of Banking Regulations Act, 1949? d. Whether the Appellate Tribunal committed an error in failing to appreciate that the Appellant is a 'State Land Development Bank' as defined under NABARD Act, 1981 which is distinct from the Co operative Bank ? e. Whether on the facts and in the circumstances of the case, and in law the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is neither a primary agricultural credit society or a Primary Co operative agricultural and rural development bank, has not the ITAT erred in upholding the order of the CIT(A) granting deduction u/s 80P(2)(a)(i) treating it as a 'State Development Bank? 3.1 The assessee claims deduction under Section 80P(2) of the Income Tax Act, 1961 (for short 'the Act') and the claim was disallowed both by the Tribunal and the authorities as well in the orders referred to in the tabular statement. Hence, the appeals at the instance of the assessee. 3.2 The Tribunal while rejecting the deduction under Section 80P(2) remanded the matter to the Assessing Officer for consideration of assessee's entitlement for deduction as a rural land development bank. Hence, the appeals at the instance of the Revenue. 3.3 The counsel appearing for the parties agreed that the principal claim for deduction of assessee, i.e., entitlement of deduction under Section 80P(2) of the Act, would have bearing on the outcome of the appeals filed by the Revenue. ITA No.2 6/2017 4. It is matter of record that the assessee claimed deduction under Section 80P(2) of the Act for the Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that function at par with other commercial banks i.e. which lend money to members of the public. Thus, if the Banking Regulation Act, 1949 is now to be seen, what is clear from section 3 read with section 56 is that a primary co-operative bank cannot be a primary agricultural credit society as such co- operative bank must be engaged in the business of banking as defined by section 5(b) of the Banking Regulation Act, 1949, which means the accepting, for the purpose of lending or investment, of deposits of money from the public. Likewise, under section 22(1)(b) of the Banking Regulation Act, 1949 as applicable to co-operative societies, no co-operative society shall carry on banking business in India, unless it is a cooperative bank and holds a licence issued in that behalf by the RBI. As opposed to this, a primary agricultural credit society is a co-operative society, the primary object of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities. ..... ..... 45. To sum up, therefore, the ratio decidendi of Citizen Cooperative Society Ltd. (supra), must be given effect to. Section 80P of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, brought on record that the assessee is entitled to the claim as Co-operative Society registered under the Kerala Co-operative Societies Act, 1969 and merits acceptance of its claim for deduction under Section 80P(2) of the Act. There is consensus in the arguments of both sides that even for applying the principle of Mavilayi Service Cooperative Bank Ltd. case, independent of the judgment in ITA No.103/2011, a few details are examined, a finding recorded and then the principle laid down in Mavilayi Service Co-operative Bank Ltd. case could be applied. 6.1 We are of the view that instead of following the assessee's own case in ITA No.103/2011 and dismissing the appeals of the assessee or alternatively follow Mavilayi Service Co-operative Bank Ltd. without examination of a few details and grant the status of Society for enabling the assessee for deduction under Section 80P(2), the matter requires to be reconsidered by the Tribunal. These questions could be answered in favour of the assessee to the limited extent that the matter requires reconsideration by the Tribunal on the claim of assessee as a Co-operative Society and the entitlement to deduction under Section 80P(2) of ..... 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