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TMI Blog2023 (5) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent/Assessee shall be entitled to exemption/benefit under Section 80(P)(2) - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural Credit Society nor a Primary Co-operative Agricultural & Rural Development Bank. And since assessee is engaged in banking business, the assessee is not eligible for deduction u/s 80P(4) of the Act. Aggrieved by the action of the Ld.CIT(A)/NFAC, the assessee is before us. 5. We have heard both the parties and perused the records. At the outset, the Ld. AR of the assessee brought to our notice that the assessee is a Credit Co-operative Society, and is only providing credit facilities to its members and its claim for deduction of Rs.99,59,604/- u/s 80P(2)(a)(i) of the Act was denied on the ground that the assessee is neither a Primary Agricultural Credit Society nor a Primary Cooperative Agricultural & Rural Development Bank but is a Cooperative Bank. Therefore, as per the section 80P(4) of the Act, the assessee is not entitled for the deduction u/s 80P of the Act. However, according to the Ld. AR, the issue is no longer res-integra since in assessee's own case for AY. 2010-11, this Tribunal in ITA. No.6903/Mum/2013 for AY 2010-11 dated 29.01.2016 was pleased to uphold the action of the Ld. CIT(A) allowing similar claim of deduction u/s 80P of the Act by holding as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers of a specific group and the area of operation was also limited to the acceptance of deposits of the members and providing credit facilities only to the members, which have been held as not falling under the banking activities as defined in the Banking Regulation Act. Therefore, respectfully following the aforesaid decisions of the ITAT Pune and Panaji Benches, the appellant also cannot be held as a Cooperative Bank hence the deduction claimed u/s 80P(2)(a)(i) cannot be denied to it. The AO is accordingly directed to allow the deduction claimed by the appellant." 6. Further, we have also perused the judgment of the jurisdictional High Court in the case of Quepem Urban Cooperative Credit Society Ltd vs. ACIT [2015] 377 ITR 272 (Bom), which was relied upon by the Ld Counsel for the assessee for the proposition that such lending activities do not constitute banking activities as the same are transacted between the cooperative society and the members of the society. Since, no public is involved the definition of "banking‟ does not cover such activities. As such, there is no Reserve Bank of India‟s approval for conducting such banking activities in this case. He a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cooperative credit society and is not a bank for the purpose of Section 80P(4) of the Act?" Apart from the fact that against the relied upon decision in the case of M/s. Quepem Urban Co-operative Credit Society Ltd. (supra) the Special Leave Petition has been dismissed, having heard learned counsel appearing on behalf of the respective parties, the issue involved in the present appeal is squarely covered against the Revenue in view of the decision of this Court in Mavilayi Service Cooperative Bank Limited and Others Vs. Commissioner of Income Tax, Calicut and Another (2021) 7 SCC 90. This Court, in the aforesaid decision has specifically observed and held that primary Agricultural Credit Societies cannot be termed as Co-operative Banks under the Banking Regulation Act and, therefore, such credit societies shall be entitled to exemption under Section 80(P)(2) of the Income Tax Act, 1961. Ms. Aakansha Kaul, learned counsel appearing on behalf of the appellant/Revenue has tried to submit that the respondent/Assessee will fall under the definition of Cooperative Bank as their activity is to give credit/loan. However, it is required to be noted that merely giving credit to its mem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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