ASSISTANT COMMISSIONER OF INCOME TAX & ANR.
vs.SHIRODA URBAN COOPERATIVE CREDTI SOCIETY LTD. & ANR.
PANAJI TRIBUNAL
N. S. SAINI, AM & GEORGE MATHAN, JM.
ITA Nos. 448 & 449/PAN/2015, 450 to 452/PAN/2015
Mar 1, 2016
(2016) 46 cch 0221 PanajiTrib
Legislation Referred to
Section 80P(4), 5(cci)
Case pertains to
Asst. Year 2008-09 & 2012-13
Decision in favour of:
Assessee
Deduction u/s 80P(2)(a)(i)—Deduction in respect of income
of co-operative societies—Deduction of income earned on providing credit
facilities to members—Assessee was co-operative society and registered under
the Co-operative Act—Assessee claimed deduction of income earned on providing
credit facilities to its members as provided u/s 80P(2)(a)(i)—Case of assessee
was that, it was not carrying on business of banking—Assessee filed its return
of income at NIL after claiming deduction u/s 80P(2)(a)(i) for Rs.
3,26,15,907/-, Rs. 14,95,434/-, Rs. 18,25,206/-, Rs. 18,75,636/- & Rs.
18,75,636/- respectively—Assessee claimed that its society was entitled to
deduction u/s 80P(2)(a)(i) as it was Cooperative Society carrying on business
of banking or providing credit facilities to its members—AO rejected claim of
assessee for deduction u/s 80P(2)(a)(i) on ground that assessee was cooperative
bank, and not entitled to claim deduction by virtue of section 80P(4)—CIT(A)
allowed claim of assessee for deduction u/s80P(2)(a)(i)—Held, according to
impugned order, society and co-operative society were clearly words of
different hand distinct significance and membership was only open to society
and not to a co-operative society— As rightly pointed out on behalf of
Assessee, word society as referred to byelaw 9(d) would include co-operative
society— Besides qualifying condition 3 for being considered as Primary
Cooperative Bank wad that bye laws must not permit admission of any other
cooperative society— This was mandatory condition i.e. bye laws must
specifically prohibit admission of any other cooperative society to its
membership— Revenue had not been able to show any such prohibition in bye laws
of Assessee—Thus even aforesaid qualifying condition (3) for being considered
as primary cooperative bank was not satisfied— Thus, three conditions as
provided u/s 5 (CVV) of the Banking regulation Act, 1949, were to be satisfied
cumulatively and except condition (2) other two qualifying conditions were not
satisfied—Assessee could not be considered as co-operative bank for purposes of
Section 80P(4)—Thus, assessee was entitled to benefit of deduction available
u/s 80P(2)(a)(i)— Revenue’s Appeal dismissed.
Held
According to the impugned order, a society and a
co-operative society are clearly words of different hand distinct significance
and the membership is only open to society and not to a co-operative society.
As rightly pointed out on behalf of the appellant the word society as referred
to bye law 9(d) would include the co-operative society. This is so as the
definition of a society under the Co-operative Act is co-operative registered
under the Co-operative Act. Besides the qualifying condition 3 for being
considered as a Primary Cooperative Bank is that the bye laws must not permit
admission of any other cooperative society This is a mandatory condition i.e.
the bye laws must specifically prohibit admission of any other cooperative
society to its membership. The Revenue has not been able to show any such
prohibition in the bye laws of the appellant. Thus even the aforesaid
qualifying condition (3) for being considered as a primary cooperative bank is
not satisfied. Thus, the three conditions as provided under section 5 (CVV) of
the Banking regulation Act, 1949, are to be satisfied cumulatively and except
condition (2) the other two qualifying conditions are not satisfied. Ergo,
appellant cannot be considered to be a co-operative bank for the purposes of
Section 80P(4) of the Act. Thus, the appellant is entitled to the benefit of
deduction available under Section 80P(2)(a)(i) of the Act.(Para4)
Conclusion
Word society as referred included co-operative society
hence assessee could not be considered as co-operative bank for purposes of
Section 80P(4) of the Act.
