9911796707
TMI Blog2014 (3) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... Y.2008-09, the assessee had claimed the benefit of deduction u/s.80P(2) of the Income Tax Act, 1961 (herein after referred to as 'the Act'). In the AY.2009-10, the Assessing Officer treated the assessee as co-operative bank and deduction claimed by the assessee u/s.80P(2) was dis-allowed. On the basis of findings of the Assessing Officer in AY.2009-10, notice u/s.148 was issued to the assessee for the AY.2008-09. The Assessing Officer vide assessment order dated 06-03-2013 passed u/s.143(3) r.w.s.147 held that the assessee is not eligible for deduction u/s.80P and assessed the income of the assessee as `2,51,74,970/-. Against the assessment order, the assessee preferred an appeal before the CIT(Appeals). The CIT(Appeals) held that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld the issue in favour of the assessee. The relevant extract of the order of the Tribunal is re-produced herein below: "5. We have heard the submissions made by the representatives of both the sides. We have also perused the orders of the authorities below as well as the decisions on which the ld.AR has placed reliance. The assessee is an agricultural co-operative credit society registered under the Tamil Nadu Co-operative Societies Act, 1961. The assesseesociety was established in the year 1968 and the members of the society are agriculturists. The primary activity of the society is accepting deposits from its members and advancing loans to its members. The assessee has been enjoying the benefit of deduction u/s.80P till the amendment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem under the Banking Regulation Act, 1949. We find that the issue whether credit co-operative societies are same as co-operative banks has been dealt in detail by the Bangalore Bench of the Tribunal in the case of ACIT Vs. M/s.Balgalore Commercial Transport Credit Co-operative Society Ltd., (supra). After comparative analysis of the 'co-operative banks' and 'co-operative societies' on various parameters, the Tribunal came to the conclusion that the activities of both the organizations and the compliances to be made under various Acts for both the organizations are varied. The sub-section 4 to section 80P is applicable only to co-operative banks and not to credit co-operative societies. The decision of the Bangalore Bench of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only co-operative banks other than those mentioned therein were meant to be excluded for the purpose of deduction under section 80P, a question would arise why then Legislature specified primary agricultural credit societies along with primary cooperative agricultural and rural development banks for exclusion from such exclusion and in other words, continued to hold such entity as eligible for deduction. However, the issue has been considerably simplified by virtue of CBDT circular No.133 of 2007 dated 9.5.2007. Circular provides as under:- "Subject: Clarification regarding admissibly of deduction under section 80P of the Income-Tax Act, 1961. 1. Please refer to your letter No. DCUS/30688/2007, dated 28.03.2007 addressed to Chairman, Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illing the description contained therein but also credit societies, which are not cooperative banks. In the present case, 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. In the result, Tax Appeals are dismissed". The Revenue has tried to establish that the assessee although a credit co-operative society is carrying banking business and is thus not eligible. In our opinion, the assessee is not a co-operative bank. The activities in the nature of accepting deposits, advancing loans etc., carried on by the assessee are confined to its members only and that too in a particular geographical area. The activities of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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