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TMI Blog2022 (8) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... is no dispute as to the fact that the above categories of persons mentioned above are nominal members of the societies as per bye-laws of the appellant society. The provisions of Maharashtra Cooperative Societies Act also permit admission of such nominal members. The term member has been defined by the Maharashtra Cooperative Societies Act to include a nominal members. The Hon ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] which dealt with the exemption u/s 80P in respect of society registered under the provisions of Kerala Cooperative Societies Act, while interpreting the term member of society after making reference to the judgement of the Hon ble Supreme Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sake of convenience and clarity, the facts relevant to the appeal in ITA No.1770/PUN/2018 for the assessment year 2010-11 are stated herein. 4. Briefly, the facts of the case are that the appellant is a cooperative-bank registered under the provisions of the Maharashtra Cooperative Act. It is engaged in the business of banking. The return of income for the assessment year 2010-11 was filed on 14.10.2010 declaring total income of Rs.9,46,40,949/-. Against the said return of income, the assessment was completed vide order dated 31.12.2012 at total income of Rs.11,01,49,880/-. Subsequently, a notice u/s 148 of the Income Tax Act, 1961 ( the Act ) was issued on 20.03.2017 served upon the appellant on 23.03.2017, as the Assessing Officer f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to become nominal member as per bye-laws of the appellant society. The term member of co-operative society includes nominal members as per the provisions of Maharashtra Cooperative Societies Act. Thus, it was submitted that the Assessing Officer was not justified in treating these categories of persons as non-members not allowing the exemption under clause (v) of sub-section (3) of section 194A of the Act. He also placed reliance on the decision of the Hon ble Bombay High Court in the case of Saraswat Co-operative Bank Ltd. vs. ITO in Tax Appeals No.3 to 9 11 of 2015 dated 07.03.2017 wherein the Hon ble Bombay High Court held that a cooperative bank is not liable to deduct TDS on the interest paid on deposits received from me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers. Now, it is settled position of law that the cooperative bank is also a specie of cooperative societies, is entitled to the benefit of general exemption provided to all the cooperative societies from deduction of tax on payment of interest to its members. But the issue in the present appeal relates to whether a nominal member, who is not a registered member of the society, can be treated as a member of the cooperative society whether the exemption is available under clause (v) of sub-section (3) of section 194A of the Act. There is no dispute as to the fact that the above categories of persons mentioned above are nominal members of the societies as per bye-laws of the appellant society. The provisions of Maharashtra Cooperative Societi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act in the light of the definition of that expression as contained in Section 2(n) of the Cooperative Societies Act. The said provision reads as under: 2. (n) Member means a person who joined in the application for registration of a society or a person admitted to membership after such registration in accordance with the provisions of this Act, the rules and the bye-laws for the time being in force but a reference to members anywhere in this Act in connection with the possession or exercise of any right or power or the existence or discharge of any liability or duty shall not include reference to any class of members who by reason of the provisions of this Act do not possess such right or power or have no such liability or d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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