TMI Blog2018 (12) TMI 1672X X X X Extracts X X X X X X X X Extracts X X X X ..... he RBI clarifying that the activity of the assessee do not fall under the activity of cooperative bank then the AO shall allow the claim of deduction u/s.80P(4) of the Act. Whether the assessee is a cooperative society or not? - HELD THAT:- In many cases, the Tribunal has held that the stand of the Revenue that a Souharda is a cooperative but not a co operative society under the ACT and hence, not eligible for deduction u/s.80P. In a recent order in the matter of M/s. Udaya Souharda Credit Co operative Society Ltd [ 2018 (8) TMI 1063 - ITAT BANGALORE] it was noted that Karnataka State has notified Karnataka Co Operative Societies Act, 1959 as well as the Karnataka Souharda Sahakari Act, 1997 and both Acts are in force. Therefore, conversion from one into another is possible. Thereafter the Tribunal held that the deduction u/s.80P can only be applied to a cooperative society registered under the Karnataka Co- Operative Societies Act, 1959 and thereafter the matter was restored back to the AO for fresh decision after making necessary enquiry and investigation. - Decided in favour of assessee for statistical purpose - I.T.A Nos.2606 & 2607/Bang/2017 (Assessment Years : 2013- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax [Appeals] ought to have allowed deduction under section 80 P [2] of the Act proportionately, in so far as the income attributable to the activities of the appellant which are not in violation of the provisions of section 80 P [2] of the Act on the facts and circumstances of the case. 7. Without prejudice the learned authorities below ought to have allowed the corresponding expenditures proportionately on income earned by the appellant from investments which was claimed as deduction under section 80 P [2] [d] of the Act, on the facts and circumstances of the case. The assessee has raised the following grounds for AY 2014-15 : 1. The order of the learned Commissioner of Income-tax [Appeals] - 5 in so far it is against the appellant is opposed to law, weight of evidence, facts and circumstances of the Appellant's case. 2. The appellant denies itself liable to be assessed on total income of ₹ 78,01 ,335/- as against the returned income by the appellant of Rs.NlL/- after claiming eligible deduction under section 80 P [2] of the Act, on the facts and circumstances of the case. 3. The learned Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies itself liable to be charged to interest under section 234 B of the Income Tax Act under the facts and circumstances of the case. Further the levy of interest under section 234 B of the Act is also bad in law as the period, rate, quantum and method of calculation adopted on which interest is levied are all not discernible and are wrong on the facts of the case. 02. The Assessing Officer has concluded that the assessee is a cooperative bank falling u/s.80P(2)(d) of the Act, in para 6 and 7 of the order, as under : 6. The assessee fulfils all the criteria laid down in section 5(cci) and is consequently a primary co-operative bank referred to in section 5(cci) of the Banking Regulation Act, 1949, referred to in Explanation below sub-section (4) of section 80P. Hence, the Provisions of section 80P(4) are attracted as per which the assessee is not eligible for claiming a deduction under section 80P(2)(a)(i) of the Income Tax act, 1961. 7. As per the details furnished by the assessee, it has earned net interest income of ₹ 17,65,921 from deposits in ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (4) of Section 80P. 05. On the other hand the Ld. DR relies on para 24 and submitted that the activity of the assessee falls within the four corners of banking. If the assessee does not have the banking licence, but still the core activity of the assessee would continue to be that of banking activity. 06. We have heard the rival contentions and perused the material on record. As per para 24 of the Hon ble Supreme Court in Citizen Cooperative Society (supra), which is reproduced supra, it is incumbent upon any society / bank to have the licence from RBI for the purposes of doing the business of banking. In the case before the Hon ble Supreme Court, the assessee had obtained a certificate from the RBI clarifying that the assessee s business does not fall under the category of cooperative bank. In our view, it will be equitable in the interest of justice if the matter is remanded back to the file of the AO with a direction to verify the activities of the assessee and further the assessee is directed to furnish the certificate / circular from the RBI to the effect that the activity / business functions of the assessee do not attract the Banking Regulations Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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