TMI Blog2012 (11) TMI 1223X X X X Extracts X X X X X X X X Extracts X X X X ..... mber Appellant by : Shri. Nikhil Pathak Respondent by : Smt. Vinita Menon O R D E R Per R.S. Padvekar, JM This appeal is filed by the Revenue challenging the impugned order of the Ld. CIT(A) Aurangabad dated 29/06/2011 for the A.Y. 2008-09. 2. The Revenue has taken multiple Grounds and most of the Grounds are argumentative. The solitary issue which arises for our consideration is whether the present assessee Co-Operative Society is hit by the amendment by insertion of Sub-sec. 4 to Sec. 80P by the Finance Act 2006 and hence, is not entitled for deduction u/s. 80P of the Act as held by the A.O. 3. The facts which reveal from the record are as under. The assessee is a Co-operative Society engaged in providing credit facilities to its member. The assessment of the assessee Society was completed by the A.O. u/s. 143(3) of the Act determining total income at ₹ 50,43,534/-. The A.O disallowed the deduction of ₹ 50,43,534/- claimed by the assessee u/s. 80P(2)(a)(i) of the Act. The A.O. rejected the claim of the assessee u/s. 80P by giving the following reasons : (1) The appellant credit co-operative is a primary co-operative bank as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business enumerated in section 5B of Banking Regulation Act, 1949 but also those activities. This view is supported by the decisions in the case of CIT Vs. Ahmednagar District Central Co-operative Bank Ltd. (2003) 264 ITR 38, CIT Vs. Baroda Peoples Co-operative Bank Ltd. 280 ITR 282 (Guj.). 4. Aggrieved, the assessee carried the issue before the Ld CIT(A), who allowed the claim of the assessee. The reasons given by the Ld CIT(A) for allowing the claim of the assessee are as under : 7. I have carefully considered the assessment order of the A.O. and submissions of the appellant. The issue to be decided is whether the credit co-operative societies are co-operative banks as the deduction u/s 80P(2)(a)(i) is available to credit co-operative societies providing credit facilities to its members. The co-operative banks are not entitled to deduction u/s 80P(2)(a)(i) in view of amendment to section 80P(4) by Finance Act, 2006 w.e.f. 01/04/2007. The relevant portion of amended section 80P(4) reads as under 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 ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -operative Banks as defined in part-V of the Banking Regulation Act, 1949 and are entitled to deduction u/s 80P(2)(a)(i) of the Act. 7.5 The contentions raised by the A.O are not in accordance with the provisions of the Income Tax Act and circular and clarification issued by the CBDT. The decisions relied on by the A.O. are not applicable to the facts of the case of the appellant. 7.6 In view of the above discussion, I am of the considered view that the co-operative society is not a co-operative bank and therefore, the appellant credit co-operative society is entitled to deduction u/s 80P(2)(a)(i) of the Act. The A.O is not justified in disallowing the deduction u/s. 80P(2)(a)(i). The A.O. is directed to allow deduction u/s 80P(2)(a)(i) on gross total income of the society. The grounds raised by the appellant are allowed. Now the Revenue is in appeal before us. 5. We have heard the parties. We find that the issue arising in this appeal is squarely covered in favour of the assessee by the decision of ITAT B Bench, Pune in the case of ITO Vs. Jan Kalyan Nagari Sahakari Pat Sanstha Ltd., Order dated 26th June 2012. 6. In the case of Jan Kalyan Nagari Sahakari Pat Sans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of supplying them to its members, or (v) .. (vi) .. 6. Sub-section (4) was introduced for withdrawing the deduction to the Cooperative Bank other than Primary Agriculture Credit Society or Primary Cooperative Agriculture and Rural Development Bank. In view of Explanation below Sub-sec.(4) of Sec. 80P, the definition of the Co-operative Bank as assigned in Para 5 of the Banking Regulation Act is to be considered. In the opinion of the A.O, as the nature of the activities of the assessee Credit Society are analogous to the banking activities, which are more specifically describe in the Banking Regulation Act and hence, assessee partakes the character of Primary Co-operative Bank as defined in clause (ccii ) of the Banking Regulation Act 1949. Clause (cci ) of Sec 5 of BR Act defines the Cooperative Bank means State Co-operative Bank, Central Co-operative Bank and Primary Co-operative Bank. 7. The primary co-operative Bank is treated as Co-Operative Bank in view of Cl. (cci) of sec 5 of the B. R. Act, 1949. Definition of Primary Co-operative Bank is given in cl. (ccv) of sec. 5 of B. R. Act, 1949, which reads as under; Primary co-operative bank means a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank means State Co-operative Bank, a Central Co-operative Bank and a Primary Co-operative Bank. It is seen that Co-operative Bank is deprived of the benefit of the deduction u/s. 80P(2)(a)(i) of the Act. As per the interpretation given by the AO, assessee Co-Operative Credit Society partakes the character of the Primary Co-operative Bank and as the Primary Co-operative Bank is included in the definition of the Co-operative Bank and hence, is not entitled to the benefits of Sec. 80P(2)(a)(i) of I. T. Act. In our opinion, this is not the correct interpretation. It is well settled principle in the interpretation of the taxing provisions that the same are to be strictly construed and there is n room for any intendment. There is no presumption as to tax.Nothing is to be read or nothing is to be implied. One has to fairly look into language used by the Parliament. The Parliament has adopted the definition of the Co-operative Bank by refering the same as given in the Banking Regulation Act, 1949. It is called Legislation by reference and we have to give the strict interpretation while interpreting the effect of Sub-sec. (4) to Sec. 80 P. In our opinion, Cooperative Credit Society is di ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
