9911796707
TMI Blog2024 (6) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... ts under section 143(3) of the Income Tax Act, 1961 (hereinafter "the Act") for Assessment Years (AYs.) 2010-11 and 2011-12 respectively. 2. The only issue involved in the instant appeals, Shri Jose Jacob, the learned counsel for the assessee, would, inform us is the entitlement of the assessee to deduction u/s. 80P(1) r.w.s. 80P(2)(a)(i) of the Act, claimed in the entirety of it's profit for the relevant year. The same stands denied to it on account of applicability of s. 80P(4); the Revenue claiming it to be in the business of banking. The assessee, unsuccessful up to the stage of Hon'ble High Court, has finally succeeded before the Hon'ble Apex Court which, vide it's order dated 14.09.2023 (in Civil Appeal No(s). 10069 of 2016 / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank, 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 Act, 1949 has to be relied upon. It states that a co-operative society in the context of a co-operative bank is in relation to or as a banking company. Thus, co-operative bank shall be construed as references to a banking company and when the definition of banking company in clause (c) of Section 5 of the BR Act, 1949 is seen, it means any company which transacts the business of banking in India and as already n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BARD Act, 1981 then it would 62 not be entitled to the benefit of deduction under sub-section (4) of Section 80P of the Act. 15.9. Section 56 of the BR Act, 1949 begins with a non-obstante clause which states that notwithstanding anything contained in any other law for the time being in force, the provisions of the said Act, shall apply to, or in relation to, co-operative societies as they apply to, or in relation to, banking companies subject to certain modifications. The object of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56 of the BR Act, 1949. In the instant case, as already noted in A.P. Varghese case, the Kerala State Co-operative Bank being declared as a state co-operative bank by the Kerala State Government in terms of NABARD Act, 1981 and the appellant society not being so declared, would imply that the appellant society is not a state co-operative bank. 15.12. In fact, in Citizen Co-operative Society Ltd., this Court held that the appellant therein was having both members as well as nominal members who were depositing and availing loan facilities from the appellant therein and therefore, appellant therein was not entitled to the benefit of Section 80P of the Act as it was functioning as a co-operative bank. But, the appellant herein is not a co-op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 clarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 4.2 The only other disallowance, which the subject matter of the assessee's appeal, is the payment to staff retirement benefit, disallowed with reference to ss. 36(1)(iv)/(v) are not met. The 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 wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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