TMI Blog2021 (9) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... Madhukar G. Hegde, CA ORDER PER N. V. VASUDEVAN, VICE PRESIDENT This appeal is by the Revenue directed against the order dated 31.12.2019 of CIT(A)-3, Bangalore, relating to AY 2016-17. 2. The Assessee in this case is a Co-operative registered under section 6(1) of the Karnataka Souharda Co-operative Act, 1997. The assessee claimed deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 (hereinafter called the Act ), on a sum of ₹ 2,88,21,118/-. The relevant provisions of Sec.80P(2)(a)(i) of the Act, provides for the following deduction: Section 80P Deduction in respect of income of Co-operative Societies: 80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely :- (a) in the case of a co-operative society engaged in- (i) carrying on the business of bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... versed the order of the AO by following the decision of the Hon ble Karnataka High Court in the case of M/S.SwabhimaniSouhardaCredit Co-operative Ltd., Vs. Government of India 3 others W.P.No.48414 of 2018 Judgment dated 16.1.2020 wherein it was held that the entities registered under the Karnataka SouhardaSahakari Act, 1997 fit into the definition of Cooperative Society as enacted in Sec.2(19) of the Act and therefore subject to all just exceptions, are entitled to stake their claim for the benefit of Sec.80P of the Act. 6. Aggrieved by the order of the CIT(A), the Assessee is in appeal before the Tribunal. The learned DR relied on the order of the AO. The learned counsel for the Assessee drew my attention to the fact that in the case of Udaya Souhardha Credit Co-operative Society Ltd. (Supra), on which the Revenue authorities placed principal reliance, the Tribunal has in paragraph-8 has specifically observed that the learned DR has raised a few valid points which cannot be outrightly ignored. The tribunal has also observed that the arguments so raised were the arguments on the issue for the first time before the Tribunal and observed that these legal arguments goes to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, are entitled to stake their claim for the benefit of Sec.80P of the Act. 9. We have considered the rival submissions. Sec.2(19) defines co-operative societies for the purpose of the Act and the same is as follows: Definitions. 2. In this Act, unless the context otherwise requires,- (19) co-operative society means 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 ; 10. The Hon ble Karnataka High Court in the case of SwabhimaniSouharda Credit Co-operative Ltd.(supra) after considering the aforesaid definition of Co-operative society made the following observations: (i) the object of enacting sec.80P of the 1961 Act may be defeated if a restrictive meaning is assigned to the definition of co-operative society as given u/s.2(19) inasmuch as the invokability of the provisions of sec.80P is dependent upon the entity seeking the benefit thereunder being a co-operative society; going by the text and context of these provisions, one can safely conclude that all entities that are registered under the enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), 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 'cooperative' is employed not as an adjective but as a noun; the definition of other relative concepts in the dictionary clauses of these Acts strengthens this view; this apart, sec.7 of the 1997 Act provides that the entity registered as a 'co-operative' shall be a body corporate, notwithstanding the conspicuous absence of the word 'society' as a postfix; sec.9 of the 1959 Act makes the entity once registered u/s.8 thereof a body corporate; both the entities have perpetual succession by operation of law; thus on registration be it under the 1959 Act or the 1997 Act, a legal personality is donned by them, so that inter alia they can own and possess the property; (f) the employment of the word Sahakari in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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