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TMI Blog2020 (11) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... ated order is passed. 2. We take up the Appeal in ITA No.263/Bang/2020. The assessee has argued Ground No.3 regarding disallowance of claim of deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961 (the Act). The other grounds and additional grounds are not relevant at this stage and are only academic in nature which are not argued before us, accordingly these grounds are dismissed. The effective ground No.3 is as under : " 3. The ld. CIT (Appeals) was not justified in law in confirming the disallowance of Rs. 20,43,170 under the provision of Section 80P(2)(a)(i) of the Act on the facts and circumstances of the case." 3. The Assessing Officer has disallowed the claim of deduction made under Section 80P(2)(a)(i) of the Act on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies;' The provisions of sec.80P are enacted by the Parliament for promoting the co-operative movement in the Country in tune with what Father of the Nation Mahatma Gandhi preached to the countrymen; this Section needs to be liberally construed to effectuate the legislative object of encouraging & promoting the growth of co-operative movement vide Kanga & Palkhivala's The Law and Practice of Income Tax, 10th Edition, Lexix Nexis at page 1656; it is more so because the right to form a co-operative society itself is made a Fundamental Ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 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 Sahakari Bill, 1997 has the following as the Statement of Objects & Reasons: "1. the recognition, encouragement and voluntary formation of co-operatives based on self help, mutual aid, wholly owned, managed and controlled by members as accountable, competitive, self-reliant and economic enterprises guided by co-operative principles specified therein; 2. removing all kinds of restrictions that have come to clog the free-functioning of the cooperatives and the controls and interference by the Government except registration and cancellation; 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f some difference in their nomenclature and functionality, the subject matter being the same; (e) the word 'co-operative' is defined by sec.2(d-2) of 1959 Act as under: "2(d-2): 'Co-operative' means a Co-operative registerd under the Karnataka Souharda 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 co-operative 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 194 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the principles of co-operation; sec.4 of this Act bars registration of an entity unless its main objects are to serve the interest of the members in the area of co-operation and its bye-laws provide for economic and social betterment of its members through self-help & mutual aid in accordance with the cooperative principles; this apart, even sub-section (2) of sec.4 is heavily loaded with co-operative substance. In the above circumstances, these writ petitions succeed; a declaration is made to the effect that the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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