TMI Blog2024 (5) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... it is in the business of banking notwithstanding the area restrictions for it s operations inasmuch as the same are applicable only qua it s members. Rather, in such a case, being in the business of banking, even income on provision of credit to non-members would stand to be deductible u/s. 80P(2)(a)(i). The bye-laws of the assessee-society are not on record, neither stand referred to in their orders by the Revenue authorities. It is only with reference thereto would it stand to be determined as to if: (a) the assessee is a co-operative bank; and (b) the assessee is in the business of banking. The matter, accordingly, is restored to the file of AO for, on a perusal of it s bye-laws, and after affording due opportunity of hearing to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit Society (PACS) under the Kerala Cooperative Societies Act, 1969 (Kerala Act), is admittedly in the business of banking. Though, however, it is not a co-operative bank , i.e., within the meaning of the term u/s. 80P(4) of the Act, only which would operate to exclude it from the purview of s. 80P of the Act. The Revenue authorities have, however, denied deduction u/s. 80P(1) r/w s. 80P(2)(a)(i), claimed on the entirety of it s profit, on the ground of the assessee being, in substance, not a PACS inasmuch as the bulk of it s lending is not for agriculture and allied purposes, the defining attribute of a PACS, which though is irrelevant for the purpose of eligibility for deduction u/s. 80P(1) r/w s. 80P(20(a)(i), even as explained in Mavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stand to be determined as to if: (a) the assessee is a co-operative bank; and (b) the assessee is in the business of banking. 3.2 The matter, accordingly, is restored to the file of the Assessing Officer (AO) for, on a perusal of it s bye-laws, and after affording due opportunity of hearing to the assessee, issue specific finding/s on the two aspects afore-stated, and decide accordingly, allowing or, as the case may be, disallowing wholly or partly, the assessee s claim for deduction u/s. 80P(1) r/w s. 80P(2)(a)(i) of the Act. We make it clear that the assessee shall be allowed deduction u/s. 80P only if it is not a cooperative bank, i.e., as per the definition provided in Explanation below s. 80P(4). Two, where it s bye-laws permit it to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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