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2020 (1) TMI 358 - HC - Income TaxDeduction u/s 80P(2) - assessee are Co-operative Societies registered under the Kerala Co-operative Societies Act, 1969 - Claim for deduction denied by AO by treating them as Co-operative Banks and not as Primary Agricultural Credit Societies - contention of the appellants is that, in view of the circular No.133/6 of 2007 dated 09.05.2007 issued by the Central Board of Direct Taxes in order to ascertain whether a cooperative society is conducting the business of banking, what shall be considered is whether it is a co-operative bank within the meaning of Part V of the Banking Regulation Act, 1949 and that the criteria shall not be as stated by the Full Bench of this Court in Mavilayi [2019 (3) TMI 1580 - KERALA HIGH COURT] - HELD THAT:- The aforesaid contention is misconceived. Clarificatory circulars are issued by Government departments for the guidance of the officers. Such circulars or instructions do bind the department and its officers. But they do not bind the Court in interpretation of statutory provisions. Circulars issued by a Government department cannot have any primacy over the decision of the jurisdictional High Court. Circulars and instructions thus issued will not survive, if they are contrary to the decision of a Constitutional Court. If a circular provides an interpretation of law that runs contrary to the interpretation given by the jurisdictional High Court, it no longer survives. Circulars or instructions given by the department are no doubt binding on the authorities under the Act, but when the Supreme Court or the High Court has declared the law on the question arising for consideration, it will not be open to a party to contend that the circular should be given effect to and not the view expressed in the decision of the Supreme Court or the High Court. Any direction issued by the Government in a circular would be mere expression of its opinion. But, once a provision has been interpreted by the superior court, then it will not be open to the assessee to project an interpretation on the concerned provision in tune with the circular, but against the law laid down by the Court. It is true that, when the Tribunal passed the orders, the decision in Mavilayi (supra) was not in existence. But, the decision in Chirakkal [2016 (4) TMI 826 - KERALA HIGH COURT] was then in force. In view of the decision in Chirakkal (supra), it was not necessary for the Tribunal to consider the effect of the circular issued by the department. A circular issued by the department is not binding on the Income Tax Appellate Tribunal also - Decided in favour revenue
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