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TMI Blog2020 (3) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... rative Thrift and Credit Society and challenges an order of assessment for Assessment Year 2017-18 dated 10.12.2019 rejecting the claim of deduction under Section 80P of the Income Tax Act, 1961 (in short 'Act'). 3. I have had an occasion to consider an identical issue in a batch of writ petitions filed by several Primary Agricultural Co-operative Societies, and in the case of K.2058, Saravanmpatti Primary Agricultural Co-operative Credit Society Ltd., Vs. The Income Tax Officer (W.P.Nos.17 of 2020 etc. batch dated 31.01.2020), while dealing with a claim of deduction under Section 80P of the Income Tax Act by the Co-operative Societies, I have stated as follows: '23. The issue that arises in W.P.Nos.1124, 1123, 1127, 1131, 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dentity. 25. However, the officer draws a distinction between the two classes of members - B class members are non-shareholding members admitted only for the purpose of availing loans against specified securities. Non-refundable admission fee is remitted by them and the duration of their membership is restricted to a maximum of three years. B class members are not allotted shares and their membership does not carry with it the right to vote and participate in elections, become office bearers or participate in General Body Meetings. They also do not hold any right to the profits or gains of the Society, while shareholding members, i.e., A class members enjoy all the aforesaid rights denied to the B class members. 26. The Assessing Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be entitled to deduction under Section 80P. The reasoning was that under the TNCS Act, a member and an associate member are one and the same and an associate member has also been held to be holding the character of a member. The Division Bench has taken the view that as far as the State of Tamil Nadu is concerned, the TNCS Act equates both members and associate members and places them on par. Thus, the distinction carved out by the Supreme Court would not be applicable in these cases. 29. In several of the orders of assessment impugned before me (W.P.Nos.1131, 1136, 1141, 1145 AND 1420 of 2020) the Assessing Officer, making reference to the order of the Division Bench of the Madras High Court, has stated that the orders have not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion between A Class members and B Class members. For the purpose of being entitled to a relief under Section 80P of the Act, all that is required is that the cooperative society should answer the description of a society engaged in carrying on the business of providing credit facilities to its member. Once the description is answered, then automatically, the benefit of Section 80P of the Act would stand attracted subject to the provisions contained in Sub-Section (2) of Section 80P of the Act. 14. Further, it is to be pointed out that in terms of Sub-Section (4) of Section 80P of the Act, which was inserted vide the Finance Act, 2006 with effect from 01.4.2007 i.e from the assessment year 2007-08, the 'primary cooperative agricultura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction 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 ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 32. In the light of the fact that the questions of law in this regard are still at large, the petitioners are directed to file a statutory appeal before the Commissioner of Income Tax (Appeals) within a period of three(3) weeks from today. However, let no recovery of the demand relating to this issue be enforced till the disposal of the appeals. 4. In view of the identity of facts and legal position, the aforesaid order is equally applicable to the present case as well. The petitioner is thus permitted to file a statutory appeal challenging the order of assessment before the Commissioner of Income Tax (Appeals) within a period of three (3) weeks from today. No recovery of the demand in relation to deduction claimed under Section 80P b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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