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TMI Blog2021 (10) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... acceptance of deposits from Members and lending the same to the Members. For Assessment Year 2015-16, the assessee filed a return of income declaring total income of Rs. 3,43,160/-, after claiming deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 (hereinafter called 'the Act') of Rs. 56,89,445/-. In a revised return of income filed, the assessee revised the said deduction to Rs. 60,32,608/-. The assessee's claim for deduction under section 80P(2)(a)(i) of the Act was denied by the AO on the ground that the society had nominal members and hence the principle of mutuality is not satisfied. The AO relied on the decision of the Hon'ble Supreme Court in the case of Citizen Co-operative Society Appeal No.10245/2017, judgment dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was not entitled to the benefit of section 80P of the Act. In coming the aforesaid conclusion, the CIT(A) placed reliance on the decision of the ITAT Bengaluru Bench in the case of ITAT Bangalore Division Bench, in the case of Udaya Souharda Credit Co-operative Society Ltd. ITA No.2831/Bang/2017 order dated 17.8.2018 wherein it was held that cooperative registered under the Karnataka Souharda Sahakari Act, 1997, cannot be regarded as a co-operative society within the meaning of the Act. He did not decide the issues on merits raised by the Assessee with regard to deduction u/s.80P(2)(a)(i) and 80P(2)(d) of the Act. 5. Aggrieved by the order of the CIT(A), the assessee has preferred the present appeal before the Tribunal. It was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 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 cooperative society; going by the text and context of these provisions, one can safely conclude that 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; (ii) in the State of Karnataka, there ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2(d-2) of 1959 Act as under: "2(d-2): 'Co-operative' means a Co-operative registered 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 1949), the Reserve Bank of India Act, 1934 (Central Act 2 of 1934), the Deposit Insurance and Credit Guarantee Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an entity unless its main objects are to serve the interest of the members in the area of cooperation and its bye-laws provide for economic and social betterment of its members through self-help & mutual aid in accordance with the co- operative 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 SouhardaSahakari 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 claim for the benefit of sec.80P of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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