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TMI Blog2023 (5) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... for AY 2014-15.The main grievance of the assessee is against the action of the Ld. CIT(A) in confirming the action of the AO denying deduction u/s 80P(2)(a)(i) of the Income Tax Act, 1961 (hereinafter "the Act"). The assessee society claims to be a Primary Agricultural Credit Society (hereinafter "PACS") on the strength of a certificate issued by the Registrar of the Co-operative Societies as PACS. According to the assessee society it provides credit only to its members and consequently it claimed that the credit facility provided to the members amounting to Rs.1,00,08,043/- are eligible for deduction u/s 80P(2)(a)(i) of the Act. However, the AO denied the claim of the assessee inter-alia on the reason that the Primary Agricultural Credit Societies are permitted only to provide financial accommodation to its members and that also for agriculture purposes; and for purposes connecting with agriculture activity only. According to AO, since the assessee provides banking facilities to general public it is a Co-operative Bank, and therefore, by virtue of section 80P(4) of the Act, deduction under section 80P of the Act is not available; and thus he denied the claim of deduction u/s 80P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to say, returns filed beyond the period stipulated under section 139(1) or section 139 (4), as the case may be, as well as section 142 (1) or section 148, as the case may be. There are no cases among these appeals where returns were not filed. There are cases where claims have been made along with the returns and the returns were filed within time. Still further, there are cases where returns were filed belatedly, that is to say, beyond the period stipulated under subsection 1 or 4 of section 139; and, there are also returns filed after the period with reference to sections 142(1) and 148 of the IT Act. 19. Section 80A(5) provides that where the assessee fails to make a claim in his return of income for any deduction, inter alia, under any provision of Chapter VIA under the heading "C.- Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder. Therefore, in cases where no returns have been filed for a particular assessment year, no deductions shall be allowed. This embargo in section 80A(5) would apply, though section 80P is not included in section 80AC. This is so because, the inhibition against allowing deduction is worded in quite similar te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudication in terms of the provisions of the IT Act. In all such situations, it cannot be treated that a return filed at any stage of such proceedings could be treated as non est in law and invalid for the purpose of deciding exemption under section 80P of the IT Act. We thus answer substantial questions of law B and C formulated and enumerated above." 4. In the light of the Hon'ble High Court decision (supra), the reasons given by Ld. CIT(A) about the omission on the part of assessee in filing the return of income u/s 139(1)/142(1)/148 of the Act cannot be a ground for these AY's before us. So the action of Ld. CIT(A) cannot be sustained in the light of the Hon'ble High Court decision (supra). 5. Coming to the other reason given by the Ld. CIT(A) to deny the claim of deduction under section 80P of the Act claim was that the assessee society cannot be termed as Primary Agricultural Credit Society [PACS] even though, there was a certificate of the Registrar of Co-operative Societies. According to him (as well as the AO), the assessee society terming itself to be a Primary Agricultural Credit Society was unsustainable because according to them, a Primary Agricultural Credit Socie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n "members" is not defined in the Act. Since a cooperative society has to be established under the provisions of the law made by the State Legislature in that regard, the expression "members" in Section 80-P(2)(a)(i) must, therefore, be construed in the context of the provisions of the law enacted by the State Legislature under which the cooperative society claiming exemption has been formed. It is, therefore, necessary to construe the expression "members" in Section 80-P(2)(a)(i) of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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