TMI Blog2012 (4) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Commissioner of Income Tax (Appeals)-V, Bangalore dated 26.05.2011 for Assessment Year 2007-08. 2. The facts of the case, in brief, are as under : 2.1 The assessee, a credit co-operative society, registered under the Co-operative Society Act, filed its return of income for Assessment Year 2007-08 on26.10.2007 declaring NIL income after claiming deduction u/ 80P(2)(a)(i) of the Income Tax Act, 1961 (herein after referred as the Act) to the extent of ₹ 51,90,360. The case was taken up for scrutiny by issue of notice u/ 143(2) on 22.9.2008 which was duly served on the assessee on 23.9.2008. The Assessing Officer completed the assessment by order u/s. 143(3) dt.23.10.2009. In doing so, the Assessing Officer denied th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The CIT(A) has erred in granting deduction under section 80P(2)(a)(i) relying on the decision of the Hon'ble ITAT, Bangalore B Bench in ITA No.1069/Bang/2010 dated 8/4/2011 in the case of M/s. Bangalore Commercial Transport Credit Cooperative Society Ltd., as the said case has not reached finality. 3. The CIT(A) has not appreciated the facts that the main motto of the co-operative society is lending for its members, which is in the nature of banking transaction and comes under the purview of section 80P sub-section 4 of the IT Act, as inserted in Finance Act, 2006 to be effective from 1/4/2007. 4. The CIT(A) has not appreciated the fact that the provisions of section 80P(4) is equally applicable to the assessee who is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulation Act, 1949 (10 of 1949); (b) primary cooperative agricultural and rural development bank means a society having its area of operation confined to a taluk and the principal object of which is to provide for long term credit for agricultural and rural development activities. 9.1 The above sub-section 4 of section 80P provides that deduction under the said section shall not be available to any cooperative bank other than a primary agricultural credit society or rural development bank. For the purpose of the said sub-section, cooperative 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 Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns issued by Reserve Bank of India (RBI). 1. As per the bye laws of the cooperative society. 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. Society cannot act as clearing agent, for cheques, DDs, pay orders and other forms. 4. Society are bound by rules and regulations as specified by in the cooperative societies act. Filing of returns Cooperative banks have to submit annual return to RBI every year. Cooperative banks have to submit annual return to RBI every year. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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