TMI Blog2018 (6) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... e treated as an entity falling within the restrictions imposed in Sec. 80P(4) of the Act. So however, if the findings of the Assessing Officer are to the contrary, he shall be free to take appropriate action as per law. - decided in favour of assessee for statistical purposes. - ITA Nos. 1044 And 1045/MUM/2017 - - - Dated:- 27-6-2018 - SHRI SAKTIJIT DEY, HON BLE JUDICIAL MEMBER AND SHRI Dr. A.L. SAINI, HON BLE ACCOUNTANT MEMBER For The Assessee : ShriB.N. Rao And Shri Vyoma Rao,CAs. For The Department : Shri Saurabh Kumar Rai, DR ORDER PERDr.A.L. SAINI, ACCOUNTANT MEMBER The captioned two appeals filed by the assessee, pertaining to Assessment Years 2012-13 2013-14, are directed against the separate or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing business and not doing a banking business. 4. The Learned CIT (A) has pointed out that the Assessing officers finding in Para 2 i.e. the Appellant is maintaining a running account in the Mumbai District central co-operative Bank having a Cash credit facility as also availing a term loan from that bank. The AO was therefore of the view that the appellant is a co-operative bank and therefore the deduction u/s.80P is not available in view of section 80P(4) and confirmed the same without appreciating the basic conditions to treat the appellant is co-op bank. Please Note that; i) All the state co-operative banks and all the district central co-operative banks are different from the primary co-operative banks. ii) All prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own case in ITA Nos. 1237 6251/MUM/2013 for the Assessment Years 2009-10 2010-11, whereby the Tribunal has set aside the order passed by the ld.CIT(A) and directed the Assessing Officer to examine and consider as to whether or not the assessee s activities are in compliance with the Maharashtra State Co-operative Act, 1960 as also the Maharashtra State Co-operative Regulations, 1961. If it is so found, then, in the absence of any licence from the Reserve Bank of India, the assessee cannot be treated as an entity falling within the restrictions imposed in Sec. 80P(4) of the Act. So however, if the findings of the Assessing Officer are to the contrary, he shall be free to take appropriate action as per law. Therefore, ld. Authorized Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 getting the deduction provided under Section 80P of the Act is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 person can earn from him; that there a prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amined 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 examine and consider as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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