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2014 (12) TMI 380 - AT - Income TaxValidity of rectification order u/s 154 – Eligibility for deduction u/s 80P(2)(a)(i) - Whether the credit cooperative societies are cooperative banks as the deduction u/s. 80P(2)(a)(i) of the Act was available to credit co-operative societies providing credit facilities to its members – Assessee under a mistake could not file for the claim of deduction, rectification application filed for the purpose - Held that:- CIT(A) was rightly of the view that the co-operative banks are not entitled to deduction u/s 80P(2)(a)(i) as per the amendment to section 80P(4) by Finance Act, 2006 w.e.f. 01.04.2007 - the meaning of co-operative credit society is separately given and it does not include co-operative bank other than co-operative land mortgage bank – also, CBDT circular bearing No.3/2008 dated 12.03.2008 also makes it clear that the amendment to section 80P(4) has withdrawn the deduction u/s 80P in respect of co-operative banks - the amendment to section 36(1)(viia) by Finance Act, 2007 w.e.f. 01.04.2007 also provides that the deduction in respect of bad debts shall be allowable also to co-operative banks - credit co-operative societies are not covered by the meaning of Cooperative Banks as defined in part V of the Banking Regulation Act, 1949 and are entitled to deduction u/s 80P(2)(a)(i) of the Act - similar issue has been decided in ITO v. Jankalyan Nagri Sahakari Pat Sanstha Ltd. [2012 (9) TMI 288 - ITAT, PUNE] - the CIT(A) was justified that co-operative society is not a co-operative bank and therefore, the assessee credit co-operative society is entitled to deduction u/s 80P(2)(a)(i) of the Act. Also in CIT v. Smt. Archana R. Dhanwatey [1981 (1) TMI 27 - BOMBAY High Court] it was held that under the I.T. Act, 1961, the authorities are obliged to act in accordance with law - Tax has to be collected as per the provision of the Act - If an assessee, under a mistake, misconceptions or on being not properly instructed is over assessed, the concerned authority under the Act is obliged, required to assist such an assessee by ensuring that only legitimate taxes are determined as collectible - If particular levy is not permissible under the Act, the tax cannot be collected – thus, the CIT(A) was justified in holding that the assessee is eligible for deduction u/s.80P(2)(a)(i) of the Act and the assessee society is eligible for deduction u/s 80P(2)(a)(i) of the Act – thus, the order of the CIT(A) is upheld – Decided against revenue.
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