TMI Blog2016 (11) TMI 1603X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2009-10 the assessee has accepted the CIT(A)’s order and no further appeal was preferred to the Tribunal. The assessee’s contention that to the extent of withdrawals made by the employees from unrecognized provident fund should be allowed as deduction u/s. 37 of the I.T. Act was never raised before any of the authorities below. Hence, this plea of the assessee is rejected. - ITA Nos. 182 & 26/Coch/2015, ITA Nos. 101 & 236/Coch/2015 - - - Dated:- 3-11-2016 - S/SHRI B P JAIN, AM GEORGE GEORGE.K, JM For the Appellant : Shri Balakrishnan K. Shri Aneesh Viswanathan, CA For the Respondent : Shri A. Dhanaraj, Sr. DR ORDER PER BENCH: These appeals, at the instance of the Assessee and the Revenue, are directed against the separate orders of the CIT(A), Trivandrum for the assessment years 2010- 11 and 2011-12. 2. Common issues are raised in these appeals and they pertain to the same assessee, hence, these appeals were heard together and are being disposed off by this consolidated order for the sake of convenience and brevity. 3. We shall take up the assessee s appeal first. I.T.A. Nos. 182 26/Coch/2015 : AYs 2010-11 2011-12 4. Though sev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers and therefore, it does not get excluded from the newly inserted sub-section (4) of Sec. 80P. He also stated that KASCARD is in the business of providing credit facilities to its members not as a co-operative society by virtue of its nature of business of providing credit facilities to its members. It is not a co-operative bank not only account of the fact that BR Act does not apply to it, but also due to the fact that:- (i) It is deemed to be a credit society under BR Act. (ii) It is not required to hold a banking licence under RBI Act. (iii) Provisions regarding CRR, SLR and other regular norms of RBI and BR Act are not applicable to it. (iv) Its business and objects are to provide credit facilities to its member under its constitution and (v) The work bank in its name is a misnomer because it is permitted to, use this word, which means it is not considered as a bank since it is not undertaking any regular banking activities. The provisions of newly inserted sub-section 4 to section 80P are specific on the point that the provisions of section 80P shall not apply in relation to any cooperative bank other than a primary agricultural credit society or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2 The assessee being aggrieved, is in appeal before us. The Ld. Counsel for the assessee submitted that as per the RTI information received from NABARD, the assessee is not a co-operative bank. The Ld. AR contended that since the assessee is not a co-operative bank, the provisions of section 80P(4) does not have application and therefore, the assessee is entitled to the benefit of deduction u/s. 80((2) of the Act. 5.3 The Ld. DR, on the other hand, submitted that the Tribunal order which has been relied on by the CIT(A) for deciding the issue in favour of the Revenue, has been upheld by the Hon ble High Court of Kerala vide judgment dated 26/11/2015. in I.T,A. No. 103/2011. 5.4 We have heard the rival contentions and perused the material on record. The Hon ble High Court of Kerala has categorically held in assessee s own case for the assessment year 2007-08 (supra) that the assessee is not a primary agricultural credit society and it is a co-operative bank. The Hon ble High Court further held that the assessee is not entitled to deduction u/s. 80P(2) of the Act, in view of introduction of section 80P(4) of the Act with effect from 01/04/2007. The relevant finding of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is a primary agricultural credit society. 5.5 In view of the above finding of the Hon ble High Court of Kerala, we hold that the order of the CIT(A) in denying the benefit of deduction u/s. 80P(2) of the Act is correct and is in accordance with law. It is ordered accordingly. Hence, the grounds relating to disallowance of deduction u/s. 80P(2)(a)(i) of the Act are rejected. (ii) Whether the authorities below are justified in disallowing the contribution made to unrecognized Superannuation Fund. 6. The CIT(A) had confirmed the disallowance made by the Assessing Officer by observing as under:- With regard to the second ground of appeal on Staff retirement benefit, it is seen that the fund is not recognized provident fund or superannuation fund as mentioned in section 36(1)(iv) nor an approved gratuity fund as mentioned in section 36(1)(v) of the Act. By virtue of the provisions of section 40A(9) the claim of deduction for any payment made not in accordance with section 36(1)(iv) or 36(1)(v) of the Act is not an allowable expenditure. The claim of deduction can be allowed only when the same is allowable under the Act. But, the appellant is of the view that the fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is stipulated that the provisions of this section shall not apply in relation to any cooperative bank, other than a primary agricultural credit society or a primary cooperative agricultural and rural development bank. 3. The learned Commissioner of Income tax (Appeals) ought to have noted that from the activities performed by the assessee and from the geographical area of its operation that the assessee is neither a primary agricultural credit society nor a primary co- operative agricultural and rural development bank. Even while performing its functions as land development bank the assessee is a co-operative bank. Deduction u/s 80(P)(2)(a)(i) is available only for co-operative societies and not for co-operative societies functioning as land development banks. 4 The learned Commissioner of Income tax (Appeals) has erred in allowing the deduction u/s 80 (P) (2) (a) (i) to the extent of ₹ 15,03,48,379/- as it is apparent from the reading of section 80 P(4) that once the assessee is hit by the provisions of section, it has to be either a primary agricultural credit society or a primary co-operative agricultural and rural development bank. 5. For these and other grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d deduction u/s 80P(2)(a)(i) of the Act, the revenue has filed these appeals. The ld DR, apart from relying on the grounds raised, submitted that the Hon ble Kerala High Court in assessee s own case for the AY 2007-08 had held that it is not a primary cooperative agricultural and rural development bank. Therefore, it was submitted that the directions of the CIT(A) to allow deduction u/s 80P(2) with regard to the activities confined to rural development bank, is erroneous. 7.4 On the other hand, the ld AR submitted that the Tribunal for the AY 2007-08 had held that the activities of the assessee, as a rural development bank is entitled to deduction u/s 80P(2) of the Act. It was submitted that this finding of the Tribunal has not been challenged by the revenue before the Hon ble High Court and had attained finality. It was contended that the CIT(A), for the relevant year, has only followed the directions given by the Tribunal in assessee s own case for Assessment Year 2007-08, hence, it was prayed that the Tribunal s order should not be interfered with. 7.5 We have heard the rival submissions and perused the material on record. During the course of hearing, on a query from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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