TMI Blog2022 (10) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... ct needs to be examined de novo in the light of the judgement of the Hon ble Apex Court, referred supra. Therefore, the issue raised on merits is restored to the files of the AO.Appeals filed by the assessee are partly allowed for statistical purposes. - ITA No.664 & 665/Coch/2022 - - - Dated:- 26-10-2022 - SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER For the Appellant : Smt. Telma Raj, A.R. For the Respondent : Smt. J.M. Jammuna Devi, Sr. D.R. ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: These 2 appeals by assessee are directed against different orders of CIT(A), NFAC, Delhi for the assessment years 2016-17 2017-18. The grounds in these appeals are common in nature, hence, these appeals are clubbed together, heard together and disposed of in same order for the same of convenience. The assessee has raised following grounds:- 1. The order of the learned CIT [A] upholding the Order of the Assessing Officer is against law, facts and circumstances of the case. 2. The CIT [A] erred in upholding the view of the Assessing Officer that though the appellant is a co-operative society, it is not eligible for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome from Other Sources and resultantly disallowing the claim of deduction u/s 80P. Aggrieved, the assessee has filed the present appeal. 3. The Ld. D.R. relied on the order of Ld. CIT(A). 4. We have heard the rival submissions and perused the materials available on record. After hearing both the parties, we are of the opinion that similar issue came for consideration before this Tribunal in the case of The Kizhathadiyoor Service Coop Bank Ltd. Vs. ITO in ITA No.525/Coch/2014 dated 20.7.2016, wherein held as under: 7 We have heard the rival submissions and perused the material on record. The details of the total interest and how the AO had treated them as incomes from other sources are tabulated below: Interest from cooperative societies AY 2009-10 Meenachil Taluk Cooperative Employees Coop Society 22,67,391/- MRMPCS cooperative society 11,41,250/- Kerala State Cooperative Consumer Federation 6,18,749/- Rubco Cooperative Society 1,63,864/- Raidco Cooperat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding of the coordinate Bench of the Tribunal in the case of the Muttom Service Cooperative Bank Ltd (supra) read as follows: 5. We have considered the rival submission on either side and also perused the material available on record. We have also carefully gone through the order of the lower authority. No doubt, the latest judgment in Totgar s Co-operative Sale Society Ltd vs ITO (supra), the Apex court found that the deposit of surplus funds by the cooperative society is not eligible for deduction u/s 80P(2). In the case before the Apex Court in Totgar s Co-operative Sale Society Ltd vs ITO (supra), the assessee co-operative society was to provide credit facility to its members and market the agricultural produce. The assessee is not in the business of banking. Therefore, this Tribunal is of the opinion that the judgment of the Apex court in Totgar s Co- operative Sale Society Ltd (supra) is not applicable in respect of the co-operative society whose business is banking. Admittedly, the assessee has invested funds in state promoted treasury small savings fixed deposit scheme. Since Government of India has withdrawn India Vikas Patra, as a small savings instrument, funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. Others Vs. CIT (431 ITR 1) wherein held as under:- It is important to note that though the main object of the primary agricultural society in question is to provide financial assistance in the form of loans to its members for agricultural and related purposes, yet, some of the objects go well beyond, and include performing of banking operations as per rules prevailing from time to time , opening of medical stores, running of showrooms and providing loans to members for purposes other than agriculture. (para 15) Court in Citizen Cooperative Society Ltd. [397 ITR 1] held as follows: 13. If the income of a society is falling within any one head of exemption, it has to be exempted from tax notwithstanding that the condition of other heads of exemption are not satisfied. A reading of the provisions of Section 80-P of the Act would indicate the manner in which the exemption under the said provisions is sought to be extended. Whenever the legislature wanted to restrict the exemption to a primary cooperative society, it was so made clear as is evident from clause (f) with reference to a milk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, the legislature expressly says so - which is not the case with section 80P(2)(a)(i); (V) That section 80P(4) is in the nature of a proviso to the main provision contained in section 80P(1) and (2). This proviso specifically excludes only co-operative banks, which are co-operative societies who must possess a licence from the RBI to do banking business. Given the fact that the assessee in that case was not so licenced, the assessee would not fall within the mischief of section 80P(4). (para 21) Ratio decidendi of Citizen Cooperative Society Ltd. (supra), must be given effect to. Section 80P, being a benevolent provision enacted by Parliament to encourage and promote the credit of the co-operative sector in general must be read liberally and reasonably, and if there is ambiguity, in favour of the assessee. A deduction that is given without any reference to any restriction or limitation cannot be restricted or limited by implication, as is sought to be done by the Revenue in the present case by adding the word agriculture into Section 80P(2)(a)(i) when it is not there. Further, section 80P(4) is to be read as a proviso, which proviso now specifically excludes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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