TMI Blog2019 (7) TMI 1521X X X X Extracts X X X X X X X X Extracts X X X X ..... nd there is no distinction made between duly registered member and nominal, associate and sympathizer member. Following the decision of Co-ordinate Bench of the Tribunal in the case of Jankalyan Nagri Sahakari Pat Sanshta Ltd., [ 2012 (9) TMI 288 - ITAT, PUNE] and following the same hold that the assessee is eligible for deduction u/s 80P(2)(d) of the Act in respect of the amount invested in PDCC i.e., Co-operative Banks and other Banks. In the view that in the present case, the ratio of decision of the High Court in the case of M/s. S-1308 Ammapet Primary Agricultural Co-operative Bank Ltd. [ 2019 (1) TMI 116 - MADRAS HIGH COURT] would be applicable. Therefore following the ratio of the decisions cited herein above and the decision of Hon ble Bombay High Court hold that assessee is eligible for deduction u/s 80P of the Act. Thus, the grounds of the assessee are allowed. - 1431/PUN/2018, 1361/PUN/2018, 1386/PUN/2018, 1430/PUN/2018, 1517/PUN/2018, 1940/PUN/2018 - - - Dated:- 3-7-2019 - SHRI ANIL CHATURVEDI, AM For the Appellant : Shir Kishore Phadke Sl.No.1, 4., Shri B.C. Malakar Sl.No.2., Shri Pramod Shingte Sl.No.3 6, Shri Sharad Shah Sl.No.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounting to ₹ 18,38,878/-. The IT authorities erred in treating the appellant as a 'Business Financer' instead of a mere Credit Co-operative Society (i.e. PAT-SANSTHA) dealing with members. 3. Further, the learned CIT(A)-6, Pune erred in law and on facts in not allowing the deduction u/s 80P(2)(d) of the ITA,1961 on account of the interest received from Pune District Central Co-operative Bank. The learned IT-Authorities ought to have appreciated that deposits were kept with co-operative banks from safety and prudence perspective. 4. Alternatively and without prejudice to Ground No. 1, 2 3, the learned IT Authorities erred in law and on facts by not allowing proportionate deduction u/s 80P of the ITA, 1961 to the extent of eligible income earned; against the taxation of total income of ₹ 18,38,878/-. 4. Similar grounds have been raised in the all the remaining appeals by different assessees i.e., ITA Nos.1361, 1386,1430 1517/PUN/2018 for A.Y. 2015-16 and ITA No.1940/PUN/2018 for A.Y. 2014-15. Though the grounds are worded differently but the crux of the grounds is denial of claim of deduction u/s 80P of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a Co-operative Bank namely i.e., the primary object or principal business of which is the transaction of banking business and that assessee society can be treated as a Cooperative Bank and also nature of the activity shows that it has taken the character of the Co-operative Banks which were not eligible for deduction u/s 80P of the Act by virtue of share capital, surplus reserves and surpluses which were invested in banks other than mentioned in Sec.80P(2)(d) of the Act. He noted that since the assessee had invested surplus funds with PDDC i.e., Co-operative Banks and other Banks assessee was not eligible for deduction u/s 80P(2)(d) of the Act. He accordingly denied the claim of deduction of ₹ 18,38,878/- u/s 80P of the Act. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who upheld the order of AO by observing as under : 6. The submissions have been gone through. It is seen that Sec.80P is applicable only to the assessees which are co-operative societies and which are involved in the activities mentioned in the subsection- 2(1) and (b) of sec.80P. The appellant is a co-operative society as it is registered under the Maharashtra Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and separate from co-operative bank. It is also held that the co-operative credit society cannot be said to be a primary cooperative bank within the meaning of Banking Regulation Act 1949 relying on the principal of interpretation that there is no intendment in interpreting the statutes and has to be strict as the definitions in Sec.80P(4) are legislation by reference. 6.1.3 The Supreme Court in the case of The Citizen Co-operative Society Ltd. Vs. ACIT Cir-3, Hyderabad in the Civil Appeal No.10245/2017 dtd.8/8/2017 held that 80P(2)(a)(i) recognizes two kinds of co-operative societies namely i) Those carrying on the business of banking and ii) those providing credit facilities to its members. It further held that in order to do the business of a cooperative bank, it is imperative to have a license from the RBI and therefore held that the business of the appellant in that case does not amount to that of a co-operative bank and held that the appellant would not come within the mischief of Sec.80P(4). 6.1.4 Considering the facts of the appellant s case, the appellant also cannot be treated as a Co-operative bank as it does not have the license from the RBI to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Citizen Co-operative Society (supra) are different and are therefore not applicable to the present facts. He submitted that the Citizen Co-operative Society (supra) was with respect to the Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995. He submitted that there is a difference in the meaning of member as per Andhra Pradesh Mutually Aided Cooperative Societies Act the definition of member as per the Maharashtra Co-operative Societies Act, 1960. He submitted that as per Maharashtra Co-operative Societies Act, Members include a nominal, associate or sympathizer member which is different in Andhra Pradesh Mutually Aided Co-operative Societies Act. He submitted that on the contrary, the Maharashtra Co-operative Societies Act with respect to the definition of Members was somewhat similar to that of Tamilnadu Co-operative Societies Act, 1983. In support of his contentions, he placed on record the comparative chart of the different relevant clauses in the Acts of Societies applicable in Maharashtra, Tamilnadu and Andhra Pradesh. He further submitted that the Madras High Court in the case of PCIT Vs. M/s. S-1308 Ammapet Primary Agricultural Co-operative Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Pat Sanshta Ltd., (supra) has decided the issue in assessee s favour by noting as under : 8. It is pertinent to note here that the definition of the Co-operative Credit Society is given in Clause (ccii) of Sec. 5 which reads as under : co-operative credit society means a Co-operative Society, the primary object of which is to provide financial accommodation to its members and includes a co-operative land mortgage bank; 9. The Banking Regulation Act, 1949 defines of Co-operative bank in cl.(cci) of sec. 5 (as inserted by sec. 56 of the said Act) and Cooperative Credit Society is not included but its identity is kept separate by way of independent definition in view of Clause (ccii) of Sec. 5 of the Banking Regulation Act which defines what is meaning of Credit Co-operative Society . On plain reading of the Banking Regulation Act, 1949, nowhere it is suggested that the term Co-operative Bank also includes Co-Operative Credit Society also. Meaning of any term or expression is to be ascertained in the context of provisions of referred Act. As per Sub-sec. (4) of Sec. 80P of the I. T. Act, Co-operative Bank means State Co-operative Bank, a Central Co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -operative Societies Act, 1983. The difference in the definition pointed out by Ld.A.R. has not been controverted by Ld. D.R. I thus find force in the argument of Ld.A.R. that the ratio of decision in the case of Citizen Co-operative Society (supra) will not be applicable to the present case. I further find that Hon ble Madras High Court in the case of M/s. S-1308 Ammapet Primary Agricultural Co-operative Bank (supra), after considering the decision of Citizen Co-operative Society (supra) has held as under : 11. We have elaborately heard the learned Senior Standing Counsel for the Revenue. 12. Admittedly, the assessee society is registered under the provisions of the TNCS Act. It defines the word 'members' under Section 2(16) to mean a person joining in the application for the registration of society and a person admitted to the membership after registration in accordance with the provisions of the Act, the Rules framed thereunder and the By-laws and includes an associate member. The expression 'associate member' is defined under Section 2(6) of the TNCS Act to mean a member, who possesses only such privileges and rights of a member and wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistrar of Mutually Aided Cooperative Societies, Ranga Reddy District. The Hon'ble Supreme Court found that the said society was not entitled to deduction under Section 80P of the Act. 16. It is noteworthy to point out that the Hon'ble Supreme Court in the decision in the case of Citizen Cooperative Society Limited also observed that in the light of insertion of Sub-Section (4) to Section 80P of the Act by the Finance Act, 2006, such deduction should not be admissible to a cooperative bank and that if it is a primary agricultural credit society or a primary cooperative agriculture and rural development bank, the deduction would still be provided. 17. In the preceding paragraphs, we have pointed out the definitions of the expressions 'members' and 'associate member' under the TNCS Act and held that an 'associate member' is also a 'member' in terms of Section 2(16) of the TNCS Act. Furthermore, the Assessing Officer himself found that the associate members are also admitted as members of the society. In such circumstances, the Assessing Officer fell into an error in not granting any relief to the assessee society, which ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
