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TMI Blog2014 (11) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the assessee on 17.9.2013 and the appeal ought to have been filed on or before 18.11.2013. It appears that on 11.11.13, Shri Nagappa planned to visit the tax consultant, Shri Ashok Mudnur at Belgaum to file appeal before the ITAT, Bangalore. However, on 10.11.2013, he was unwell and was advised by Doctor not to travel. On 22.11.13, he was hospitalized and operated on 30.12.13 for heart problems. Copy of the discharge summary of KLES Heart Foundation, Belgaum has also been filed in support of the averments in the affidavit. Thus, reasons for the delay have been explained to be due to ill-health of the Hon. Secretary of the assessee. 4. On perusal of the reasons given in the affidavit in support of the application for condonation of delay in filing the appeal, we are satisfied that delay in fling the appeal was occasioned due to a reasonable cause. Accordingly, delay in filing the appeal is condoned. 5. The only issue involved in this appeal by the assessee is denial of deduction u/s. 80P(2)(a)(i) of the Income-tax Act, 1961 [hereinafter referred to as "the Act" in short"] by the revenue authorities. 6. The assessee is a co-operative society registered under the Karnat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept of a banking institution. The AO referred to the objects of the assessee society in its bye laws that the activities of the assessee fall within the Banking Regulations Act and held that its activities are in the nature of banking activity. According to the AO, none of the criteria contemplated in sub-section (4) were fulfilled in the case of the assessee. 8. In the light of the above-mentioned observations, the AO held that the appellant was not entitled to exemption u/s 80P(2)(a)(i) of the Act and brought the same to tax. 9. On appeal by the assessee, the CIT(Appeals) upheld the action of the AP denying deduction u/s. 80P(2)(a)(ii) of the Act by considering the following decisions of ITAT relied upon by the assessee :- i) ACIT, Circle-3(1), Bangalore v. M/s Bangalore Commercial Transport Credit Co-operative Society Ltd. - ITA.No.1069/Bang/2010 dated 8/4/2011 [ITAT, Bangalore Bench 'B', Bangalore] ii) DCIT, Central Circle, Panaji v. Jayalakshmi Mahila Vividodeshagala Souharda Sahakari Ltd. ITA Nos. 1 to 3 (PNJ)/1012 dated 30/3/2012. iii) The Citizen Co-operative Society v. Addl. CIT, ITA Nos.1003 & 1004/HYD/2011 dated 2.7.2012. 10. Aggrieved by the order of the CIT(Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly to cooperative banks. Section 80P(4) does not define the word "cooperative society". The existing sub-section 80P(2)(a)(i) shall be applicable to a cooperative society carrying on credit facility to its members. This view is clarified by Central Board of Direct Tax vide its clarification No.133/06/2007-TPL dated 9th May, 2007. The difference between a cooperative bank and a cooperative society are as follows:- Nature Cooperative society registered under Banking Regulation Act, 1949 Cooperative society registered under Karnataka Cooperative Society Act, 1959. Registration Under the Banking Regulation Act, 1949 and Cooperative Societies Act, 1959. Cooperative Societies Act, 1959. Nature of business 1. As defined in section 6 of Banking Regulation Act. 2. Can open savings bank account, current account, overdraft account, cash credit account, issue letter of credit, discounting bills of exchange, issue cheques, demand drafts (DD), Pay Orders, Gift cheques, lockers, bank guarantees etc. 3. Cooperative Banks can act as clearing agent for cheques, DDs, pay orders and other forms. 4. Banks are bound to follow the rules, regulations and directions issued by Reserve Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 80P(4) rws 2(24) (viia) being income from providing credit facilities carried on by a co-operative society with its member?" The Hon'ble Court held as follows: "4. As per section 80P(4), the provisions of section 80P would not apply in relation to any co-operative bank other than primary agricultural credit society or primary co-operative agricultural and rural development bank. As per the explanation, the terms "cooperative bank" and "primary agricultural credit society" shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949. 5. Assessing Officer held that by virtue of section 80P(4), the respondent assessee would not be entitled to benefits of deduction under section 80P. CIT(Appeals) as well as the Tribunal reversed the decision of the Assessing Officer on the premise that the respondent assessee not being a bank, exclusion provided in sub-section(4) of section 80P would not apply. This, irrespective of the fact that the respondent would not fall within the expression "primary agricultural credit society". 6. Had this been the plain statutory provisions under consideration in isolation, in our opinion, the question of law could ..... X X X X Extracts X X X X X X X X Extracts X X X X
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