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TMI Blog2017 (12) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee pointed out that the dispute came up for the first time in the assessment proceedings for Assessment Year 2009-10 and it is only thereafter that the assessments for the preceding Assessment Years 2007-08 to 2008-09 were reopened, which are also in appeal before the Tribunal. So far as the appeals for the other two assessment years, namely, Assessment Years 2010-11 and 2011-12 are concerned, the dispute is on similar lines arising in the scrutiny proceedings in terms of Sec. 143(3) of the Act. 2. In this background, it was a common point between the parties that the appeal of the assessee in ITA No. 1237/Mum/2013 for the Assessment Year 2009-10 be taken as the lead case. This appeal is directed against the order of CIT(A)-24, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt, the assessee-society does not have a licence from the Reserve Bank of India and, therefore, it cannot be construed as a co-operative bank. Insofar as the restriction contained in Sec. 80P(4) of the Act, it seeks to prohibit the exemption u/s 80P of the Act with respect to any co-operative bank except a primary agricultural credit society or a primary co-operative agricultural and rural development bank. In the absence of any licence from the Reserve Bank of India, it can be straightaway deduced that the assessee does not fall within the restrictions contained in Sec. 80P(4) of the Act, as also noted by the Hon'ble Supreme Court in the case of The Citizen Co-operative Society Ltd. through its Managing Director, Hyderabad, Civil A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co-operative bank, an aspect which is now well-settled by the judgment of the Hon'ble Supreme Court in the case of The Citizen Co-operative Society Ltd. (supra). 6. Apart from above, the discussion in the orders of the lower authorities do not establish whether the activities of the assessee are confined to its members or not. At this stage, we may refer to the following discussion in the judgment of the Hon'ble Supreme Court in the case of The Citizen Co-operative Society Ltd. (supra) which clearly suggests that more is required to conclude whether or not assessee is entitled to exemption u/s 80P of the Act :- "25) So far so good. However, it is significant to point out that the main reason for disentitling the appellant from g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f activity by the appellant, it is remarked by the Assessing Officer that the activity of the appellant is in violation of the Co-operative Societies Act. Moreover, it is a co-operative credit society which is not entitled to deduction under Section 80P(2)(a)(i) of the Act. 26) It is in this background, a specific finding is also rendered that the principle of mutuality is missing in the instant case. Though there is a detailed discussion in this behalf in the order of the Assessing Officer, our purpose would be served by taking note of the following portion of the discussion: "As various courts have observed that the following three conditions must exist before an activity could be brought under the concept of mutuality; that no p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , what is required to be examined is whether or not the activities of the assessee are confined to its members so as to fall within the provisions of Sec. 80P(2)(a)(i) of the Act. Pertinently, Sec. 80P(2)(a)(i) of the Act, so far as is relevant for the present case, deals with exemption with regard to the income earned by co-operative society from providing credit facilities to its members. The aforesaid was put to the learned representative for the assessee who submitted that the assessee had no objection if the matter is restored back to the file of the Assessing Officer for proper verification on this aspect. 8. We, therefore, in view of the aforesaid discussion, set-aside the order of the CIT(A) and direct the Assessing Officer to exam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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