TMI Blog2014 (8) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... ociety was a primary agricultural credit society , but AO had not given a concrete finding on the basis of the evidence available on the record that the assessee society was a cooperative bank carrying on banking business. It also appears that the decision of Jayalakshmi Mahila Vivododeshagala Souharda Sahakari Ltd. [ 2012 (8) TMI 185 - ITAT PANAJI] was not brought to the notice of neither the AO nor the Ld. CIT(A). In the present case, it is also not clear what happened to the order of the Ld. CIT(A) for the A.Y. 2007-08 which has been followed by the Ld. CIT(A) while deciding the issue for the year under consideration. We therefore, in the absence of clear facts available on the record, deem it appropriate to set aside this issue back to the file of the Assessing Officer to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes. - SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER For the Assessee : Shri S.M. Jain For the Department : Shri N.A. Joshi - D.R. ORDER PER N.K. SAINI, A.M. This is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose. It was also stated that the assessee was basically a cooperative bank engaged in business of providing credit facilities to its Members for land development only. However, the Assessing Officer was of the view that for claiming deduction u/s 80P(2)(a)(i) of the Act, followings points are to be considered:- 1. That Part-Business of Form 3CD of Audit Report states that the Nature of business of the Society is Banking Business (forms part of this order as Annexure A ) 2. The Auditor in his report being OBSERVATION AS ON 31/03/2009 also confirms that Assessee is Cooperative society carrying on the business of banking or providing credit facilities to it s members (forms part of this order as Annexure B ) 3. As per PART V of Banking Regulation Act, 1949 ------ primary agricultural credit society means a cooperative society,--- (1) the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including the market of crops); and (2) the bye-laws of which do not permit admission of any other cooperative society as member 4. The As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embers engaged in agriculture for carrying-out agricultural activities and majority of the loans were given against the land only. It was further submitted that the assessee was a land development bank and its entire banking funds were regulated and controlled by its Apex Bank and the income of the assessee was exempted u/s 80P(2)(a)(i) of the Act which was fully covered by the exceptions provided by section 80P(4) of the Act. Reliance was placed on the decision of the ITAT Cochin Bench in the case of Kerala State Cooperative Agricultural Rural Development Bank Ltd. Vs. ACIT reported in 139 TTJ 585. Ld. CIT(A) did not find merit in the submissions of the assessee by observing as under:- 6.3 I have considered the order of the Assessing Officer and submission of the appellant and I find that the appellant claimed its income of Rs. 60,85,941/- fully exempted u/s 80P(2)(a)(i). The Assessing Officer denied the claim of the appellant holding that the assessee society is a co-operative bank carrying on banking business and is not entitled for deduction u/s 80P as provided in sec. 80P(4). During the course of the appellate proceeding, the appellant mainly repeated its same argument tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for A.Y. 2007-08 vide order dated 11/03/2010 had given conclusive finding that the Assessing Officer had justifiably denied the assessee s claim of deduction u/s 80P(2)(a)(i) of the Act for the reason that the conditions prescribed in section 80P(4) of the Act are not fulfilled. Now the assessee is in appeal. 8. Learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the issue under consideration is squarely covered by the decision of the ITAT Panaji Bench in the case of DCIT Vs. Jayalakshmi Mahila Vivododeshagala Souharda Sahakari Ltd. reported at (2012) 137 ITD 163. 9. In his rival submissions, learned D.R. strongly supported the orders of the authorities below. 10. We have considered the submissions of both the parties and carefully gone through the material available on record. It is noticed that the ITAT Panaji Bench in the aforesaid referred to case of DCIT Vs. Jayalakshmi Mahila Vivododeshagala Souharda Sahakari Ltd. has followed the decision of the ITAT Bangalore Bench in the case of ACIT, Circle-3(1), Bangalore Vs. M/s. Bangalore Commercial Transport Credit Cooperative Society Ltd. in I.T.A.No 1069/B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to its members. This view is clarified by Central Board of Direct Tax vide its Clarification No. 133 /06/2007-TPL dated 9-5-2007. The difference between a co-operative bank and a co-operative society are as follows: - Nature Cooperative Society registered under Banking Regulation Act 1949. Cooperative society registered under Karnataka Cooperative Societies Act 1959 Registration Under the Banking Regulation Act, 1949 and Cooperative Societies Act 1959 Cooperative Societies Act, 1959 Nature of business 1. As defined in section 6 of Banking Regulation Act. 2. Can open savings bank account, current account, overdraft account, cash credit account, issue letter of credit, discounting bills of exchange, issue cheques, demand drafts (DD), Pay Order, Gift cheques, lockers, bank guarantees etc. 3. Co-operative Banks can act as clearing agent for cheques, DDs, pay orders and other forms. 4. Banks are bound to follow the rules, regulations and directions issued by Reserve Bank of India (RBI) 1. As per the bye-law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial accommodation to its members only for agricultural purposes or it is a cooperative bank doing banking business. In the present case, the Assessing Officer quoted the submissions of the learned authorized representative of the assessee that somewhere he stated that the assessee society was a bank carrying on banking business and somewhere he stated that the assessee society was a primary agricultural credit society , but the Assessing Officer had not given a concrete finding on the basis of the evidence available on the record that the assessee society was a cooperative bank carrying on banking business. It also appears that the decision of the ITAT Panaji Bench reported in DCIT Vs. Jayalakshmi Mahila Vivododeshagala Souharda Sahakari Ltd. (supra) was not brought to the notice of neither the Assessing Officer nor the Ld. CIT(A). In the present case, it is also not clear what happened to the order of the Ld. CIT(A) for the A.Y. 2007-08 which has been followed by the Ld. CIT(A) while deciding the issue for the year under consideration. We therefore, in the absence of clear facts available on the record, deem it appropriate to set aside this issue back to the file of the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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