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TMI Blog2024 (6) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court. Even as we would ordinarily have, as a matter of abundant caution, made the allowance of deduction u/s. 80P(1) r/w s. 80P(2)(a)(i) subject to no change therein impacting the assessee s claim of not being a cooperative bank, there being no reference in the assessment or the appellate orders to any clauses of the bye-laws, so that the same, as indeed the assessee s activities remain the same as for the earlier years. The matter thus gets settled in assessee s favour and we accordingly hold it to be eligible for deduction as claimed as the only reason we find in the order by the Revenue authorities, denying the said deduction is of the assessee being a co-operative bank. This decides the principal ground/s, both qua the assessee and Revenue s appeal for both the years. Payment to staff retirement benefit, disallowance with reference to sec 36(1)(iv)/(v) - HELD THAT:- Fund/s is admittedly not approved, validating the disallowance/s. So, however, as explained by Shri Jacob during hearing, the said disallowance/s would stand subsumed in the larger deduction u/s. 80P(1) that would, on account of the disallowance/s, be available. We wholly agree inasmuch as the said deduction is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either in a district or in a State, respectively, the primary object of which is the financing of other co-operative societies in the district or the State respectively. Further, NABARD Act, 1981 does not define banking business. Hence, reliance is to be placed, on the definition of banking business in terms of clause (w) of Section 2 of NABARD Act, 1981 which means the RBI Act has to be seen. When the RBI Act is perused, it is noted that clause (i) of Section 2 defines co-operative bank , co-operative credit society , director , primary agricultural credit society , primary co-operative bank and primary credit society to have the meanings respectively assigned to them in Part V of the BR Act, 1949. Therefore, we have to again fall back on Part V of the BR Act, 1949 which has defined a co-operative bank in Section 56 (c)(i)(cci) to be a state co-operative bank, a central co-operative bank and a primary co-operative bank and central co-operative bank and state co-operative bank to have the same meanings as NABARD Act, 1981. 15.8. Since the words bank and banking company are not defined in the NABARD Act, 1981, the definition in sub-clause (i) of clause (a) of Section 56 of the BR Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 56 is to provide a deeming fiction by equating a co-operative society to a banking company if it is a co-operative bank within the meaning of the said provision. This is because Chapter V of the BR Act, 1949, deals with application of the Chapter to co-operative societies which are co-operative banks within the meaning of the said chapter. For the purpose of these cases, what is relevant is that throughout the BR Act, 1949, unless the context otherwise requires, - references to a banking company or the company or such company shall be construed as references to a co-operative bank. Therefore, while considering the meaning of a co-operative bank inherently, such a cooperative society must be a banking company then only it would be construed as a cooperative bank requiring a licence under Section 22 of BR Act, 1949 in order to function as such a bank. 15.10. Further, while considering the definition of a co-operative bank under Section 56(cci) of the BR Act, 1949, to mean a state co-operative bank, a central co-operative bank and a primary co-operative 63 bank which is defined in (ccviii) thereof, to have meanings respectively assigned to them in the NABARD Act, 1981 would i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the public. 15.14. Therefore, when the definition of co-operative bank in Section 56 of BR Act, 1949 is viewed in terms of Sections 2(u) of the NABARD Act, 1981, it is clear that only a state co-operative bank would be within the scope and meaning of a banking company under Section 2(c) of the BR Act, 1949 on obtaining licence under Section 22 of the said Act. Conclusion: In the instant case, although the appellant society is an apex co- operative society within the meaning of the State Act, 1984, it is not a co-operative bank within the meaning of Section 5(b) read with Section 56 of the BR Act, 1949. In the result, the appeals filed by the appellant are allowed and the order(s) of the Kerala High Court and other authorities to the contrary are set aside. Consequently, we hold that the appellant is entitled to the benefit of deduction under Section 80P of the Act. The questions for consideration are answered accordingly. In this view of the matter, he would continue, the assessee s case is fully covered by the decision by the Hon'ble Apex Court in it s case for AY 2007-08. On a query by the Bench, it was clarified by him that the assessee is not, as it s name suggests, an ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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