TMI Blog2023 (8) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid decision rendered in assessee s own case and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following the orders passed by the Co ordinate Bench of the Tribunal in assessee s own case [ 2023 (5) TMI 1238 - ITAT MUMBAI] we are of the considered view that the assessee is entitled to claim deduction under section 80P(2) of the Act. Accordingly, the grounds no. 2-6 raised in assessee s appeal are allowed. - ITA No. 1239/Mum./2023 And ITA No. 1240/Mum./2023 - - - Dated:- 27-7-2023 - Shri G.S. Pannu, President, And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Hasmukh Ravaria For the Revenue : Smt. Mahita Nair ORDER The present appeals have been filed by the assessee challenging the separate impugned orders of even date 15/02/2023, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [ learned CIT(A) ] for the assessment years 2013 14 and 2014 15. 2. Since both appeals pertain to the same assessee involving similar issues arising out of a similar factual matrix, therefore, as a matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is against the disallowance of deduction claimed under section 80P(2) of the Act. 5. The brief facts of the case as emanating from the record are: The assessee is a co-operative credit society run by the employees of M/s Rashtriya Chemicals and Fertilisers Ltd. The main activity of the co-operative society is to provide credit facilities to its members. For the year under consideration, the assessee filed its return of income on 25/09/2013 declaring a total income of Rs. 54,640 after claiming a deduction of Rs. 87,25,521 under section 80P(2)(a) of the Act. The return filed by the assessee was selected for scrutiny and statutory notices under section 143(2) as well as section 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, the assessee was asked to explain as to why the deduction claimed under section 80P of the Act be not disallowed in view of the amended provisions of section 80P(4) of the Act. In response thereto, the assessee submitted that the assessee is primarily engaged in the business of providing credit facility to its members and it raises funds through share capital and deposit from members only. It was further submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under section 80P(2) of the Act. From the perusal of the record, it is evident that the AO denied the deduction claimed by the assessee under section 80P of the Act by applying the provisions of section 80P(4) of the Act since the assessee is providing credit facilities to its members. We find that the Co ordinate Bench of the Tribunal in assessee s own case in Rashtriya Chemicals And Fertilisers Employees‟ Co operative Credit Society v/s ITO, in ITA No.765/Mum./2022, vide order dated 30/05/2023 for the assessment year 2012-13, inter-alia, by following the decision rendered in the assessment year 2010-11 allowed the claim of the assessee under 80P of the Act. The relevant findings of the Co ordinate Bench, in the aforesaid decision, are reproduced as under:- 5. We have heard both the parties and perused the records. At the outset, the Ld. AR of the assessee brought to our notice that the assessee is a Credit Co-operative Society, and is only providing credit facilities to its members and its claim for deduction of Rs. 99.59,604/- u/s 80P(2)(a)(i) of the Act was denied on the ground that the assessee is neither a Primary Agricultural Credit Society nor a Primary Co- o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Even the bye laws of the appellant does not provide for the banking activities. The facts of the instant case are almost similar to the decisions relied upon by the appellant particularly, the facts in the case of (a) ITO vs. Jankalyan Nagri Sahakari Pat Sanstha 24 taxman.com 127 Pune Tribunal, and (b) DCIT vs. Jayalkshi Mahila Vividodeshagala Souharda Sahakari Ltd 23 taxmann.com 313 Panaji Tribunal, where the activities of the assessees were limited to the members of a specific group and the area of operation was also limited to the acceptance of deposits of the members and providing credit facilities only to the members, which have been held as not falling under the banking activities as defined in the Banking Regulation Act. Therefore, respectfully following the aforesaid decisions of the ITAT Pune and Panaji Benches, the appellant also cannot be held as a Cooperative Bank hence the deduction claimed u/s 80P(2)(a)(i) cannot be denied to it. The AO is accordingly directed to allow the deduction claimed by the appellant. 6. Further, we have also perused the judgment of the jurisdictional High Court in the case of Quepem Urban Cooperative Credit Society Ltd vs. ACIT [2015] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missed the said appeal preferred by the Revenue, relying upon its earlier decision in the case of M/s. Quepem Urban Co- operative Credit Society Ltd. Vs. Assistant Commissioner of Income Tax. 377 ITR 272, the Revenue has preferred the present appeal. The High Court considered the following question of law- Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified as claimed by the assessee on the ground that the assessee, a co- operative credit society and is not a bank for the purpose of Section 80P(4) of the Act? Apart from the fact that against the relied upon decision in the case of M/s. Quepem Urban Co-operative Credit Society Ltd. (supra) the Special Leave Petition has been dismissed, having heard learned counsel appearing on behalf of the respective parties, the issue involved in the present appeal is squarely covered against the Revenue in view of the decision of this Court in Mavilayi Service Cooperative Bank Limited and Others Vs. Commissioner of Income Tax, Calicut and Another (2021) 7 SCC 90. This Court, in the aforesaid decision has specifically observed and held that primary Agricultural Credit Societies cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Co ordinate Bench in the aforesaid decision, the Hon‟ble Supreme Court in a recent decision in PCIT v/s Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd. [2023] 150 taxmann.com 173 (SC), held that a taxpayer who is merely giving credit to its members cannot be said to be the Co-operative Banks/Banks under the Banking Regulation Act and the banking activities under the Banking Regulation Act are altogether different. Therefore, the Hon‟ble Supreme Court held that the assessee, a co-operative credit society, could not be termed a Bank/Co-operative Bank and that being a credit society, it was entitled to exemption under section 80(P)(2) of the Act. 10. From the perusal of the statement of facts filed by the assessee before the learned CIT(A), we find that the assessee specifically placed reliance upon the decision of the Tribunal in its own case for the assessment year 2010-11, whereby the grant of deduction under section 80P(2)(a) of the Act was upheld. We further find that despite taking note of the aforesaid submission on page 16 of the impugned order, the learned CIT(A) completely ignored the same and did not consider the decision of the Tribunal rendered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance of deduction made by the Assessing Officer of Rs. 95,20,610 claimed u/s. 80P(2)(a) of the Act. The CIT(A) failed to appreciate that the Appellant Society was engaged in the business of extending credit facility to it members only and as such, could not by any stretch of imagination be considered as a Co operative Bank. 5. In the facts and circumstances of the case, the PCIT(A) erred in upholding the disallowance of deduction made by the Assessing Officer of Rs. 50,000 claimed u/s. 80P(2)(c) of the Act. The CIT(A) failed to appreciate that the Appellant Society was within the monetary limit as provided by the said section and was, therefore, eligible to claim deduction under the said sub-section as such. 6. The Appellant prays for consequential relief in respect of interest u/s. 234B, 234C, 234D and 244A of the Act. 7. The Appellant craves leave to add, alter, delete, modify or amend any of the above grounds of appeal, if necessary, at any time till or during the hearing of the appeal. 16. The only dispute raised by the assessee, in the present appeal, is against the disallowance of deduction claimed under section 80P(2) of the Act. Since a similar issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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