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TMI Blog2015 (11) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... co-operative society registered under the Karnataka State Co-operative Societies Act, 1959. It is engaged in providing credit facility to its members. The assessee had claimed deduction under section 80P(2)(a)(i) of the Act. Under section 80P(2)(a)(i) of the Act where the gross total income of a co-operative society includes income from carrying on the business of banking or providing credit facilities to its members, the same is allowed deduction. By the Finance Act, 2006 with effect from April 1, 2007, Sub-section (4) was inserted in section 80P which provides as follows : "(4) The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. Explanation.-For the purposes of this sub-section,- (a) 'co-operative bank' and 'primary agricultural credit society' shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949 (10 of 1949) ; (b) 'primary co-operative agricultural and rural development bank' means a society having its area of operation confined to a taluk and the principal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdictional High Court took the view that when the status of the assessee is a co-operative society and not a co-operative bank, the order passed by the Assessing Officer extending the benefit of exemption from payment of tax under section 80P(2)(a)(i) of the Act is correct and such an order is not erroneous and therefore, jurisdiction under section 263 of the Act cannot be invoked. 8. Aggrieved by the order of the Commissioner of Income-tax (Appeals), the Revenue has filed the present appeal before the Tribunal. 9. We have heard the learned Departmental representative and perused the material on record. The issue raised by the assessee in these appeals has already been considered and decided by this Tribunal in the case of Asst. CIT v. Bangalore Commercial Transport Credit Co-operative Society Ltd. in I. T. A. No. 1069/Bang/2010, wherein this Tribunal held that section 80P(4) 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 the commercial banks. Since the assessee is a co-operative society and not a co-operative bank, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Karnataka Co-operative Societies Act, 1959. Registration Under the Banking Regulation Act, 1949 and the Co-operative Societies Act, 1959. Co-operative Societies Act, 1959. Nature of business 1. As defined in section 6 of Banking Regulation Act. 1. As per the bye laws of co-operative society. 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. 2. Society cannot open savings bank account, current account, issue letter of credit, discounting bills of exchange, issue cheques, demand drafts, pay orders, gift cheques, lockers, bank guarantees, etc. 3. Co-operative banks can act as clearing agent for cheques, DDs, pay orders and other forms. 3. Society cannot 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 the Reserve Bank of India (RBI). 4. Society are bound by rules and regulations as specified by the Co-operative Societies Act. Filing of returns Co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank other than primary agricultural credit society or primary co-operative agricultural and rural development bank. As per the Explanation, the terms "co-oper ative bank" and "primary agricultural credit society" shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949. 5. The Assessing Officer held that by virtue of section 80P(4), the respondent-assessee would not be entitled to benefits of deduction under section 80P. The Commissioner of Income-tax (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, irre spective 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 be stated to have arisen. When, as contended by the assessee, by virtue of sub- section (4) only co-operative banks other than those mentioned therein were meant to be excluded for the purpose of deduction under section 80P, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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