TMI Blog2019 (2) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Kerala Cooperative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2). Thus we hold that the assessee-society is entitled to the benefit of deduction u/s. 80P of the Act Validity of certificate issued under the Kerala Co-operative Societies Act, 1969, categorizing the assessee as a Primary Agricultural Credit Society (PACS) - Held that:- In the instant case the classification of assessee-society as PACS is admittedly done by the Joint Registrar of Co-operative Societies, who is a competent authority under the KCS Act. The certificate stating that the assessee is classified as a Primary Agricultural Credit Society was issued by the Assistant Registrar. Therefore, the classification was not done by the Assis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the assessment, the assessee preferred appeal before the first appellate authority. The CIT(A), following the judgment of the Jurisdictional High Court in the case of Chirakkal Service Co-operative Bank Ltd. (384 ITR 490) held that the assessee is entitled to deduction u/s. 80P(2) of the I.T. Act and directed the Assessing Officer to allow deduction u/s. 80P of the Act. The CIT(A) has also held that the decision in the case of M/s.Citizen Co-operative Society Ltd. v. ACIT, Hyderabad is not applicable to primary agricultural credit societies, in view of the order of the Cochin Bench of the Tribunal in the case of ITO v. M/s.Maruthonkara Service Co-operative Bank Ltd. [ITA No.474/Coch/2017]. 5. Aggrieved by the order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach of them, as made available to this court as part of the paper books, clearly show that they have been classified as primary agricultural credit societies by the competent authority under the provisions of that Act The parliament having defined the term 'co-operative society' for the purposes of the BR Act with reference to, among other things, the registration of a society under any State law relating to co-operative societies for the time being; it cannot but be taken that the purpose of the societies so registered under the State Law and its objects have to be understood as those which have been approved by the competent authority under such State law. This, we visualise as due reciprocative legislative exercise by the Parliam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not contain any finding of fact to the effect that the bye- laws of any of the appellant or its classification by the competent authority under the KCS Act is anything different from what we have stated herein above. For this reason, it cannot but be held that the appellants are entitled to exemption from the provisions of section 80P of the IT Act by virtue of sub- section 4 of that sect; on. In this view of the matter, the appeals succeed. 17. In the light of the aforesaid, we answer substantial question A in favour of the appellants and hold that the Tribunal erred in law in deciding the issue regarding the entitlement of exemption under section 80P against the appellants. We hold that the primary agricultural credit societies, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KCS Act, the certificate of registration is to be issued by the Registrar sealed and signed by him. (iii) As per Rule 4 of KCS Rules, the registration certificate should be issued by the Registrar in Form 3. (iv) As per Rule 11 of KCS Rules, the Registrar is maintaining the record of the cooperative societies registered by him. This record was not verified by the CIT(A), Thrissur. 7.1 We have heard the learned DR and learned AR on this issue. It is to be noted that deduction u/s 80P(2) was disallowed only for the reason that the Department has filed a SLP before the Hon ble Apex Court as against the judgment of the Hon ble Kerala High Court in the case of Chirakkal Service Co-operative Bank Ltd. (supra) . The Hon ble Kerala High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) for exercising all the powers of Registrar. In other words, in the instant case the classification of assessee-society as PACS is admittedly done by the Joint Registrar of Co-operative Societies, who is a competent authority under the KCS Act. The certificate stating that the assessee is classified as a Primary Agricultural Credit Society was issued by the Assistant Registrar. Therefore, the classification was not done by the Assistant Registrar, hence the certificate issued is valid as per law. Hence, grounds No.4 to 10 raised by the Revenue are dismissed. 8. The Cross Objection filed by the assessee is only supportive of the CIT(A) s order for grant of deduction u/s 80P(2). Since we have already dismissed the Revenue s appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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