TMI Blog2020 (2) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... This appeal filed by the assessee is directed against the order of the CIT(A), dated 23.08.2019. The relevant assessment year is 2016-2017. 2. The assessee has raised the following grounds:- 1. That the impugned order is opposed to facts and law in so far as it is prejudicial to the interests of the Appellant. 2. That the ld.CIT(A) erred in confirming the order of AO and denying the deduction under section 80P(2), and in doing so: (a) He failed to appreciate that the business of the Appellant consists entirely of extending credit facilities to its members as given under section 80P(2). (b) He failed to appreciate that co-operative society defined under section 2(19) of the Income Tax Act also includes entities registered under Karnataka Souharda Sahakari Act, 1997 inasmuch as they also operate and adopt the principle of cooperation as required under the Act. (c) He misdirected himself in not following the decision of the jurisdictional ITAT in case of Siddartha Patina Souharda Sahakari Niyamitha (ITA No.1234/ Bang/2019) and failed to appreciate that the said decision was given after considering all other decisions on the subject and it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The benefit of deduction cs only be given to the cooperative societies and not to the cooperative. Therefore, the assessee is not eligible to claim deduction under section 80P(2) of the Act. 3. The CIT(A) confirmed this view taken by the Assessing Officer by observing that a co-operative society, which is registered under the Karnataka Co-operative Societies Act, 1959 is only entitled to claim deduction u/s 80P(2) and no other society is entitled to claim such deduction. Accordingly, he confirmed the order of the A.O. 4. Against the same, the assessee is in appeal before us. The learned AR strongly placed reliance on the judgment of the Hon ble Karnataka High Court in th case of M/s.Swabhimani Souharda Credit Co-operative Ltd. Ors. v. Government of India Ors. in Writ Petition No.48414 of 2018 (T-IT) dated 16th January, 2020, wherein the following question was considered by the Hon ble High Court of Karnataka :- Whether an entity registered under the Karnataka Souharda Sahakari Act, 1997 fits into the definition of co-operative society as enacted by sec. 2(19) of the Income Tax Act, 1961 for the purpose of section 80P thereof? 4.1 The Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat all entities that are registered under the enactments relating to co-operative societies, regardless of their varying nomenclatures need to be treated as co-operative societies; this view accords with the purposive construction of sec.80P r/w sec.2(19) of the 1961 Act; (c) in the State of Karnataka, there have been two statutes enacted by the State Legislature' that relate to registration regulation of co-operative societies viz., the Karnataka Cooperative Societies Act, 1959 ie., Karnataka Act No. 1-1 of 1959 and the Karnataka Souharda Sahakari Act, 1997 ie., Karnataka Act Nu.17 of 2000; both these Acts are enacted pursuant to Article 246(3) r/w Entry 32, List-II of Schedule VII of the Constitution of India; there is no other Entry to which this Act is relatable; the Legislative Entries being only the fields of legislation need to be very broadly interpreted, is the settled position of constitutional jurisprudence vide UJAGAR PRINTS, ETC. vs. UNION OF INDIA, AIR 1989 SC 516; Chapter X of 1997 Act containing sec.67 enacts important co-operative principles that animate and brood through almost all the provisions of this Act; (d) the Karnataka Souharda Sahakar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sahakari Act, 1997 (Karnataka Act 17 of 2000), and includes the Union Co-operative and the Federal Co-operative Similarly, the word 'co-operative' is defined by Sec. '2(e) of 1997 Act as follows: 2(e): Co-operative means a co-operative including a cooperative bank doing the business of banking registered or deemed to be registered under Section 5 and which has the words 'Souharda Sahakari' in its name (and for the purposes of the Banking Regulation Act, 1949 (Central Act 10 of 1949), the Reserve Bank of India Act, 1934 (Central Act 2 of 1934), the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (Central Act 47 of 1961) and the National Bank for Agriculture and Rural Development Act, 1981 (Central Act 67 of 1981), it shall be deemed to be a Co-operative Society . A close examination of these two definitions shows that they have abundant proximity with each other in terms of content and contours; it hardly needs to be stated that in both these definitions the word (co-operative' is employed not as an adjective but as a noun; the definition of other relative concepts in. the dictionary clauses of these Acts strengthens thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of the petitioner-like-societies have been left to be addressed by the concerned authorities. The learned DR submitted that keeping in view the above finding of Hon ble Karnataka High Court, the matter may kindly be set aside and restored back to the file of the Assessing Officer for fresh assessment as per the provisions of section 80P of the I.T.Act, 1961, in the light of the decision of the Hon ble Apex Court in the case of The Citizen Co-operative Society Limited and the decision of Hon ble Karnataka High Court and Hon ble Apex Court in the case of Totgars Co-operative Sale Society. 6. We have heard the rival submissions and perused the material on record. In view of the latest judgment of the Hon ble jurisdictional High Court in the case of M/s.Swabhimani Souharda Credit Co-operative Ltd. Ors. v. Government of India Ors. in Writ Petition No.48414 of 2018 (T-IT) dated 16th January, 2020 , wherein held that entities registered under the Karnataka Souharda Sahakari Act, 1997 fit into the definition of co-operative society as enacted in sec.2(19) of the Income Tax Act, 1961, and therefore, subject to all just exceptions, petitioners are entitled to stake their ..... X X X X Extracts X X X X X X X X Extracts X X X X
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