TMI Blog2023 (11) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, then also the AO has required to disallow only the income even for the reason that the activities of the assessee does not fall within the purview of section 80P(2) of the Act. In our view, admittedly, the assessee can only claim the deduction in respect of the gross total income earned by the assessee from the activities mentioned in sub-section (2) of Section 80P of the Act. Undoubtedly, the activities of the insurance do not form a part and parcel of carrying on the business of banking and providing credit facilities to its members. In our considered opinion, the activities of the insurance do not fall within the realm of the banking activities as banking activities are separate and distinct from the insurance activities. The banking activities are regulated by the Banking Regulations Act, 1949 and the insurance activities are governed by the Insurance Regulation of Development Authority Act, 1999. The banking and insurance activities are two separate and distinct activities, governed by two different Acts and hence, it cannot be presumed that insurance activities were subsumed in banking activities. The banking activities are quite different than the insurance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 17 December, 2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way for the cause of substantial justice. We accordingly hold that impugned delay in filing this appeal is neither intentional nor deliberate but due to the circumstances beyond its control. The same stands condoned. Case is now taken up for adjudication on merits. 3. The grounds raised by the assessee read as under : 1) The order of the learned CIT (A) is erroneous both on facts and in law. 2) The learned CIT (A) erred in confirming the action of the Assessing Officer in rejecting the deduction u/s 80P(2) of the I.T.Act. 3) The leaned CIT (A) ought to have seen that the appellant is entitled for deduction u/s 80P of the I.T.Act and the claim for deduction of Rs. 38,22,781/- should have been allowed by the learned CIT (A). 4) The learned CIT (A) erred in holding that the appellant is not eligible for deduction u/s 80P (2) on the ground that the activities of the appellant also include micro insurance premium, NPS contribution, loan insurance premium etc. 5) The learned CIT (A) ought to have seen that the exemption is allowable u/s 80P and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) of the Act and passed assessment order dt. 23.12.2019. 5. Feeling aggrieved with the order of Assessing Officer, assessee filed appeal and thereafter, it was migrated to the ld.CIT(A), NFAC, Delhi, who dismissed the appeal of the assessee by observing as under : 6.5 During the appellate proceedings, the appellant has mainly relied on the argument that these incidental services were provided to members like provident fund, Life Insurance for the benefit of members and were in a bona fide faith claimed as allowable. The appellant has also stressed that it has provided services to members only. 6.6 From the records, it is seen that out of total receipts of Rs. 16,01,11,047/-, interest on loan is only Rs. 91,66,381/- whereas receipts related to the income from services narrated by Assessing Officer are given below : Receipts (Insurance) Amount (Rs.) Micro Insurance premium from MACS 96,40,434/- NPS Contribution from MACS 40,02,554/- Loan Insurance premium I year Aviya 8,44,243/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be called an income derived out of an activity pertaining to credit cooperative society and this is an activity outside the p purview of the objects for which the deduction was allowed. The assessee claimed deduction u/s 80P to the extent of Rs. 38,22,781/-. Since the income was earned from the businesses which are not covered u/s 80P of the Act, the assessee is not eligible for deduction u/s 80P by the assessee is disallowed and the same is added back to the returned income. 8. The contention of the ld. AR before us is that the Assessing Officer has disallowed the receipt instead of the income earned by the assessee on the said amount. Therefore, the order passed by the ld.CIT(A) is not in accordance with the law. 9. Per contra, the ld.DR has submitted that the assessee has been earning income from the activities which are not fallen within the purview of section 80P of the Act as the primary activities of the assessee are referring to the insurance services and therefore, the Assessing Officer was rightly denied the deduction claimed by the assessee. 10. We have heard the rival submissions and perused the material on record. 10.1 Section 80P of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablished by or under a Central, State or Provincial Act (being a company or corporation engaged in supplying milk, oilseeds, fruits or vegetables, as the case may be, to the public), the whole of the amount of profits and gains of such business; (c) in the case of a co-operative society engaged in activities other than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as does not exceed, (i) where such co-operative society is a consumers' co-operative society, one hundred thousand rupees; and (ii) in any other case, fifty thousand rupees. Explanation. In this clause, consumers' co-operative society means a society for the benefit of the consumers; (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income; (e) in respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence, it cannot be presumed that insurance activities were subsumed in banking activities. The banking activities are quite different than the insurance activities and therefore, the contention of the assessee that the activities carried out by the assessee, being the insurance activities, would fall within the banking activities is devoid of merit and we do not agree with the said contention. 13. The activities of the assessee are primarily in the nature of insurance activities as mentioned by the Assessing Officer and confirmed by the ld.CIT(A). In view of the above, we do not find any reason to state that the assessee is entitled to any deduction under section 80P(1) of the Act. Having held that in our opinion, the Assessing Officer is only entitled to disallow the deduction claimed by the assessee in the return of income with respect to insurance business. For the above said purposes, we deem it proper to remand back the matter to the file of Assessing Officer for the limited purpose with a direction to disallow the deduction claimed by the assessee in return of income which is directly relatable to the insurance activities, as it do not fall under section 80P(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
