9911796707
TMI Blog2023 (12) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,253/- received from Baroda Rajasthan Gramin Bank Ltd, and interest amounting to Rs. 18,12,954/-from Central Cooperative Bank. The AO being not satisfied with the reply of the assessee hold that the condition laid down in section 80P(2)(d) has not been satisfied. The AO has stated that interest received from Baroda Gramin Bank Ltd. is not allowable deduction u/s 80P(2)(d) of the Act as this entity is not a cooperative society as provided u/s 80P(2)(d) of the Act. He further stated that the interpretation of section 22 of RRB (Regional Rural Bank) Act by the assessee, that the section only says so with reference to taxation of region rural bank under I.T. Act, 1961 and not taxation of assessee which is undisputedly not a Regional Rural Bank. Therefore, it is not the case of the RRB wherein vide CBDT Circular No. 61201(F. No. 273(3) 144/2009-IT(A-1) dated 20.09.2010, and the RRB are not eligible for deduction u/s 80P from A.Y. 2007-08 onward and also the Circular No. 319 dated 11.01.1982 seeming any RRB to be co- operative society stands withdrawn from application w.e.f. assessment year 2007-08. Also as per clause 22.02 of Circular No. 141.2006 dated 28.12.2006 of the Finance Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the banks invested in Regional Rural Banks. This court is of the opinion that the revenue's contention is unsustainable. Section 80P in certain terms categorically deems Regional Rural Banks of which description Baroda Rajasthan Regional Rural Banks answer (c) as Cooperative Societies for purposes of Income Tax. In the absence of non-obstante clause, the mere fact that a restrictive condition was imposed in relation to a Cooperative Bank for regulating the benefit of Section 80P does not in any manner alter the pre-existing situation. By virtue of Section 22, Regional Rural Banks continue to be deemed Cooperative Societies and all the consequences that flow from it." 5.1.3 Having considered the above facts and following the decision of Hon'ble High Court cited (supra), the addition so made is directed to be deleted. As a result, ground no. 1 is allowed." 4. The Ld. DR supported the assessment order and contended that the appellant assessee is a registered cooperative society under the Rajasthan Cooperative Societies Act and engaged in the business of trading in milk and other milk products. The assessee has claimed deduction u/s 80P(2)(d) of the Act, on interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. We have also perused the various provisions of Regional Rural Bank Act 1976. Baroda Rajasthan Kshetriya Gramina Bank was set up under the provisions of under the provisions of Regional Rural Bank Act. Section 22 of the Regional Rural Bank Act provides that Regional Rural Bank to be deemed to be a co-operative society for purpose of the Income-tax Act, 1961. In our considered view the Circular of CBDT cannot override the provisions of the Act of Parliament. Even the careful reading of the Circular No. 6 of CBDT make it clear that exemption is withdrawn with respect to Regional Rural Banks are not eligible for deduction under section 80P of the Income-tax Act, 1961 from the assessment year 2007-08 onwards, and not the co-operative societies. The assessee before us is the cooperative society and not the Regional Rural Bank. Therefore, considering the provisions of section 22 of Regional Rural Bank Act, wherein the status of the banks established are of the co-operative society the assessee is entitled for the exemption on the interest earned on the deposits. In the result the ground No. 1 & 2 of the appeal are allowed." As the facts of the A.Y. 2014-15 are similar to the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erted to provide that the provisions of the said section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative society for agricultural land and rural development bank. Accordingly, the AO has been justified in disallowing exemption claimed u/s 80P(2)(d) of the Act. 8. In the latest judgment the Hon'ble Apex Court in the case of "Kerala State Co-Operative Agricultural & Rural Development Bank Ltd. v. Assessing Officer", [2023] 154 taxmann.com 305 (SC) has observed as under: "15.13. Further, under the provisions of the State Act, 1984, 'agricultural and rural development bank' means the Kerala Cooperative Central Land Mortgage Bank Limited, registered under Section 10 of the Travancore-Cochin Co-operative Societies Act, 1951, which shall be known as Kerala State Co-operative Agricultural and Rural Development Bank Limited i.e. the appellant herein. Thus, from conjoint reading of all the relevant statutory as alluded to herein above, it is quite clear that the appellant is not a co-operative bank within the meaning of subsection (4) of Section 80P of the Act. The appellant is a co-operative credit so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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