TMI Blog2012 (11) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Appellant : Shri Sunil Ganoo For the Respondent : Shri S.K.Singh ORDER PER R.K.PANDA, AM: This appeal filed by the Revenue is directed against the order dated 28.09.2011 by the CIT(A), Aurangabad, relating to A.Y. 2007-08. 2. Facts of the case in brief are that the assessee is a cooperative society constituted under the Maharashtra State Co-op Societies Act, 1960, and is engaged in the business of providing credit facilities to its members. It filed its return of income on 31.10.2007 declaring Nil income after claiming deduction of ₹ 19,21,181/- u/s.80(P)(2)(a)(i) of the Income Tax Act, 1961. On being questioned by the Assessing Officer during the assessment proceedings regarding the allowability of claim of deduction u/s.80(P) it was claimed that the primary object of the Society is to provide financial accommodation to members only. It was argued that the provisions of Banking Regulation Act 1949 are not applicable to the assessee, there is no control or supervision of the RBI and there is no cheque clearing facility available to the assessee. Therefore, it is not a Co-op Bank but a Co-op Society engage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to carry on banking business but it can carry on banking business until it is granted a licence or notified that a licence cannot be granted to it. (viii) The appellant is carrying on the banking activity as defined in section-5 of the Banking Regulation Act as per which Banking means the accepting for the purpose of lending or investment of deposits of money from the public repayable on demand or otherwise and withdrawal by cheque, draft order or otherwise . However, the term transaction in banking business will include not only the business enumerated in section 5B of Banking Regulation Act, 1949 but also those activities. This view is supported by the decisions in the case of CIT vs. Ahmednagar District Central Co-operative Bank Ltd. (2003) 264 ITR 38, CIT vs. Baroda Peoples Co-operative Bank Ltd. 280 ITR 282 (Guj.). 4. In appeal the Ld. CIT(A) allowed the claim of deduction u/s.80P(2)(a)(i) made by the assessee. While doing so, he considered the amendment to section 80P(4) by the Finance Act, 2006 w.e.f. 01.04.2007, the Banking Regulation Act, 1949, the CBDT Circular bearing No.2 of 2008 dated 12.03.2008 and the CBDT Clarification bearing F.No.133/06/07- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co-op Society is not a Co-op Bank and is entitled to deduction u/s.80P(2)(a)(i). He accordingly submitted that this being a covered matter, the appeal filed by the Revenue should be dismissed. 6. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We find the coordinate Bench of the Tribunal in the case of ITO vs. Jain Nagari Sahakari Pat Sanstha Ltd. (supra), while allowing the claim of deduction u/s.80(P)(2)(a)(i), has held as under: 5. After hearing both the sides, we find the coordinate Bench of the Tribunal in the case of ITO Vs. Jankalyan Nagri Sahakari Pat Sanstha Ltd. (Supra) while upholding the order of the CIT(A) and dismissing the appeal filed by the revenue has held as under : 4. We have heard the rival submissions of the parties and perused the records. In this case, as per the facts on record, the assessee is a Cooperative Credit Society. Section 80P has undergone an amendment w.e.f.1.4.2007 by insertion of Sub-sec. (4) which reads as under : (4) The provisions of this section shall not apply in relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to be considered. In the opinion of the A.O, as the nature of the activities of the assessee Credit Society are analogous to the banking activities, which are more specifically describe in the Banking Regulation Act and hence, assessee partakes the character of Primary Co-operative Bank as defined in clause (ccii ) of the Banking Regulation Act 1949. Clause (cci ) of Sec 5 of BR Act defines the Co-operative Bank means State Co-operative Bank, Central Co-operative Bank and Primary Co-operative Bank. 7. The primary co-operative Bank is treated as Co-Operative Bank in view of Cl. (cci) of sec 5 of the B. R. Act, 1949. Definition of Primary Co-operative Bank is given in cl. (cci) of sec. 5 of B. R. Act, 1949, which reads as under; Primary co-operative bank means a co-operative society other than a primary agricultural credit society (i) The primary object or principal business of which is the transactions of banking business; (ii) The paid-up share capital and reserves of which are not less than one lack of rupees; and (iii) The by-laws of which do not permit admission of any other cooperative society as a member: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank and as the Primary Co-operative Bank is included in the definition of the Cooperative Bank and hence, is not entitled to the benefits of Sec. 80P(2)(a)(i)of I. T. Act. In our opinion, this is not the correct interpretation. It is well settled principle in the interpretation of the taxing provisions that the same are to be strictly construed and there is n room for any intendment. There is no presumption as to tax. Nothing is to be read or nothing is to be implied. One has to fairly look into language used by the Parliament. The Parliament has adopted the definition of the Co-operative Bank by referring the same as given in the Banking Regulation Act, 1949. It is called Legislation by reference and we have to give the strict interpretation while interpreting the effect of Sub-sec. (4) to Sec. 80 P. In our opinion, Co-operative Credit Society is distinct and separate from the Co-operative Bank nor it can be said as a Primary Co-operative Bank within the meaning of Banking Regulation Act, 1949. Hence, the assessee being a Co-operative Credit Society is entitled for deduction u/s. 80 P(2)(a)(i) of the Act. We accordingly uphold the order of the Ld CIT(A). 10. In result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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