TMI Blog2014 (8) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... entertain the Revenue's contention that section 80P(4) would exclude not only the co-operative banks other than those fulfilling the description contained therein but also credit societies, which are not co-operative banks. In the present case, the respondent-assessee is admittedly not a credit co-operative bank but a credit co-operative society. Exclusion clause of sub-section (4) of section 80P, therefore, would not apply. See The Asst. Commissioner of Income Tax Versus M/s Bangalore Commercial Transport Credit Co-operative Society Ltd.[2011 (4) TMI 1222 - ITAT BANGALORE]. The assessee is a co-operative society, engaged in providing credit facilities to its members - Decided in favour of assesse. - ITA No.1736/Bang/2013 - - - Dated:- 1-8-2014 - SHRI RAJPAL YADAV AND SHRI JASON P. BOAZ, JJ. For the Appellant : Shri K. Ashok Rao, C.A. For the Respondent : Shri M.K. Biju, JCIT (DR) ORDER Jason P. Boaz (Accountant Member).- This appeal by the assessee is directed against the order, dated January 30, 2014, of the Commissioner of Income-tax (Appeals), Mysore, relating to the assessment year 2010-11. The assessee has also separately filed a stay petition (S.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by a co-operative society with its members the assessee's activity was also income . The Assessing Officer observed that the deduction from gross total income of certain receipts is available only to primary agricultural credit societies or primary co-operative agricultural and rural development banks ; and that the benefit of such deduction is not available to institutions like the assessee- society. The Assessing Officer also referred to Part V, section 56(b), (cci), (ccv) and (ccvi) of the Banking Regulation Act to hold that, if one of the two conditions of the appellant, i.e., its primary object should be banking or its principal business must be transaction in banking business, is sufficient to bring the appellant into the concept of a banking institution. The Assessing Officer referred to the objects of the assessee-society in its bye-laws that the activities of the assessee fall within the provisions of section 56(b), 56(cci), 56(ccv) and 56(ccvi) of Part V of the Banking Regulations Act, 1949 and held that, broadly, they are in the nature of banking activity. 4. In the light of the abovementioned observations, the Assessing Officer held that the appellant was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of the said sub-section, co-operative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949. In Part V of the Banking Regulation Act, 'cooperative bank' means a State cooperative bank, a Central cooperative bank and a primary cooperative bank. 9.2 From the above section, it is clear that the provisions of section 80P(4) has got its application only to co-operative banks. Section 80P(4) does not define the word 'co-operative society'. The existing section 80P(2)(a)(i) shall be applicable to a co-operative society carrying on credit facility to its members. This view is clarified by the Central Board of Direct Taxes vide its clarification No. 133/06/2007-TPL, dated May 9, 2007. The difference between a co-operative bank and a co-operative society are as follows : Nature Co-operative society registered under the Banking Regulation Act, 1949. Co-operative society registered under the Karnataka Co-operative Society Act, 1959. Registration Under the Banking Regulation Act, 1949 and Co-operative Societies Act, 1959. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tute is applicable only to co-operative banks and not to credit co-operative societies. The intention of the Legislature of bringing in co-operative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a cooper ative society and not a co-operative bank, the provisions of section 80P(4) will not have application in the assessee's case and therefore, it is entitled to deduction under section 80P(2)(a)(i) of the Act. Hence, we are of the view that the order of the Commissioner of Income-tax (Appeals) is correct and in accordance with law and no interference is called for. 6. The hon'ble Gujarat High Court in the case of CIT v. Jafari Momin Vikas Co-op. Credit Society Ltd. by judgment, dated January 15, 2014, Tax Appeal No. 442 of 2013 with Tax Appeal No. 443 of 2013 and Tax Appeal No. 863 of 2013 [2014] 362 ITR 331 (Guj) had to deal with the following question of law (page 332) : 'Whether the hon'ble Tribunal is correct in allowing deduction under section 80P(2)(a)(i) to the assessee's society even though the same is covered under section 80P(4) read with section 2(24)(viia) being income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e allowable to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. For the purpose of the said sub-section, co-oper ative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949. 3. In Part V of the Banking Regulation Act, co-operative bank means a State co-operative bank, a Central co-operative bank and a primary co-operative bank. 4. Thus, if the Delhi Co-op. Urban Thrift and Credit Society Ltd. does not fall within the meaning of co-operative bank as defined in Part V of the Banking Regulation Act, 1949, sub-section (4) of section 80P will not apply in this case. 5. The issues with the approval of Chairman, Central Board of Direct Taxes. 7. From the above clarification, it can be gathered that sub- section (4) of section 80P will not apply to an assessee which is not a co-operative bank. In the case clarified by the Central Board of Direct Taxes, Delhi Co-op. Urban Thrift and Credit Society Ltd. was under consideration. The circular clarified that the said entity not being a cooperative bank, section 80P(4) of the Act would ..... X X X X Extracts X X X X X X X X Extracts X X X X
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