TMI Blog2021 (9) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... ored to the files of the A.O. The A.O. is directed to examine the claim of deduction u/s 80P of the I.T.Act afresh and decide the issue in accordance with law. Thus we set restore the issue to AO to examine the claim u/s. 80P of the Act as directed by the Tribunal- Appeal filed by the assessee is treated as allowed for statistical purposes. - ITA No.193/Bang/2021 - - - Dated:- 20-9-2021 - SHRI GEORGE GEORGE K, JUDICIAL MEMBER For the Appellant : Sri.Prakash Hegde, CA For the Respondent : Sri.Ganesh R.Ghale, Standing Counsel ORDER This appeal at the instance of the assessee is directed against the CIT(A) s order dated 26.03.2021. The relevant assessment year is 2015-2016. 2. The grounds raised read as follows:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 18.12.2017. The Assessing Officer made the following additions / disallowance (i) interest income of ₹ 1,31,555, and (ii) disallowance of exemption claimed u/s 80P of the I.T.Act amounting to ₹ 25,10,956. 3.1 The Assessing Officer added interest income of ₹ 1,31,555 on account of difference in interest income earned by the assessee and declared in the return of income. As regards the denial of deduction u/s 80P(2) of the I.T.Act amounting to ₹ 25,10,956, the Assessing Officer stated that in view of section 80P(4) of the I.T.Act, the assessee is not entitled to the benefit of deduction u/s 80P of the I.T.Act since it is a co-operative bank. The assessee s plea that it is a co-operative society in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of section 80P of the I.T.Act. In this context, the learned AR relied on the judgment of the Hon ble jurisdictional High Court in the case of Swabhimani Souharda Credit Cooperative Limited v. Government of India reported in (2020) 421 ITR 670 (Kar.). 6. The learned Departmental Representative had submitted that the assessee is not entitled to the benefit of deduction u/s 80P(2)(a)(i) of the I.T.Act in respect of interest earned from co-operative banks. In this context, the learned DR relied on the order of the ITAT in the case of M/s.Jyothi Pattin Souharda Sahakari Niyamati v. Pr.CIT in ITA No.650/Bang/ 2020 (order dated 13.08.2021). 7. I have heard rival submissions and perused the material on record. The primary reason for the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose 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 ; 7. As can be seen from the aforesaid definition of Co-operative society under the Act, any co-operative society registered under any other law of any State for registration of co-operative society is also regarded as cooperative society under the Act. Souhardas also operate on the principle of co-operation and adopt the principles of co-operation. Cooperative Societies and Co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is also true that the unabated party politics in the co-operative movement is also a big hindrance to its progress. Realizing the vital role of the cooperative movement in the progress of the society, the Central Planning Commission set up a committee by appointing Shri Chaudari Brahmaprakash as its head with a task of drafting a Model Cooperative Act which will prevent interference of the governments. This committee, after a detailed study of the Cooperative Acts of various states, drafted a Model Cooperative Act in 1991 and Central Government recommended the state governments to adopt this. Accordingly, in 1997 a bill on parallel cooperative act was tabled in the state legislature of Karnataka. Demanding an early approval of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cooperatives is almost minimal. 11. The above discussion would show that souharda co-operatives are also one form of co-operative societies registered under a law in force in the State of Karnataka for registration of co-operative societies. Therefore the conclusion of the revenue authorities that co-operative societies and cooperatives are different and that co-operative registered as Souharda Sahakari cannot be regarded as co-operative societies is unsustainable. We therefore hold that the Assessee should be allowed deduction u/s.80P(2)(a)(i) of the Act, as the ground on which the same was denied to the Assessee is held to be incorrect. However, the other conditions for allowing deduction u/s. 80P(2)(a)(i) of the Act needs to be exami ..... X X X X Extracts X X X X X X X X Extracts X X X X
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