M/s. Tamilnadu Co-operative Housing Federation Ltd., CHENNAI V. ACIT, CHENNAI

CO 3/CHNY/2014

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9355 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 17-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S BHARATH
• Assessee Lawyers: S KAMARAJ
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . , . . ! , ' # [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.2185/MDS/2013 & C.O.NO.03/MDS/2014 [IN I.T.A.NO. 2185/MDS/2013] / ASSESSMENT YEAR : 2007-08 THE ASSTT. COMMISSIONER OF INCOME-TAX BUSINESS CIRCLE VII CHENNAI VS. M/S TAMILNADU COOPERATIVE HOUSING FEDERATION LTD 40 RITHERDON ROAD CHENNAI - 7 [PAN AABFS 8827 N] ( $% / APPELLANT) ( &'$% /RESPONDENT/ CROSS OBJECTOR) DEPARTMENT BY : SHRI S. BHARATH, CIT ASSESSEE BY : SHRI S. KAMARAJ, CA / DATE OF HEARING : 13-02-2014 / DATE OF PRONOUNCEMENT : 20-02-2014 ( / O R D E R PER BENCH THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECT IONS BY ASSESSEE FOR ASSESSMENT YEAR 2007-08, ARE DIRECTED AGAINST THE ORDER I.T.A.NO.2185/13 C.O.03/14 :- 2 -: OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II CHEN NAI, DATED 30.8.2013, PASSED IN APPEAL NO.254&324/2013-14, IN PROCEEDINGS UNDER SECTION 143(3) R.W.S 147OF THE INCOME-TAX ACT , 1961 (IN SHORT THE ACT). 2. THE GROUNDS RAISED IN THE APPEAL READ AS FOLLOWS: 2. THE LEARNED COMMISSIONER OF INCOME TAX (A) ERRE D IN DELETING THE DISALLOWANCE MADE BY THE AO OF DEDUCTI ON .CLAIMED BY THE ASSESSEE U/S 80P TO THE TUNE OF RS. 46.72 CRORES. 2.1 THE ID CIT(A) OUGHT TO HAVE NOTED THAT AS PER C LAUSE (VIIA) OF SEC. 2(24), INSERTED BY THE FINANCE ACT 2006, W .E.F 1.4.2007 WHICH DEFINES INCOME INCLUSIVELY TO INCLUDE PROFITS AND GAINS OF ANY BUSINESS OF BANKING (INCLUDING PROVIDING CREDIT FACILITIES) CARRIED ON BY COOPERATIVE SOCIETIES. HENCE, AS PER THIS SECTION, PROVIDING CREDIT FACILITIES TO THE CONSTITUENTS IS TO BE CONSTRUED BROADLY AS THE BUSINESS OF BANKING. 2.2 THE ID CIT(A) OUGHT TO HAVE NOTED THAT WITH EFF ECT FROM 01.04.2007 SEC.80P WAS AMENDED BY THE FINANCE ACT A ND SUB-SECTION (4) WAS INTRODUCED WHEREBY ALL COOPERAT IVE BANKS OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR P RIMARY COOPERATIVE AGRICULTURAL & RURAL DEVELOPMENT BANK ARE NOT ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. THE ASSE SSEE STATES ITSELF TO BE A COOPERATIVE SOCIETY ENGAGED IN THE B USINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND HENC E FALLS WITHIN THE DEFINITION OF A COOPERATIVE BANK. 2.3 RELIANCE IS PLACED ON THE DECISION OF THE ITAT COCHIN BENCH IN THE CASE OF KERALA STATE COOPERATIVE AGRIC ULTURAL RURAL DEVELOPMENT BANK LIMITED 10 TAXMAN 145, WHERE IN IT WAS HELD THAT A FEDERATION DOING BANKING ACTIVITIES WITH COOPERATIVE CREDIT SOCIETIES OR PAT PEDHIS WHO ARE ITS MEMBERS AND WHICH IS LOCATED IN AN URBAN AREA IS ALSO NOT E NTITLED FOR DEDUCTION U/S 80P. IN THE INSTANT CASE, THE ASSESSE E IS LOCATED IN A METRO CITY (CHENNAI) AND IS DOING THE BUSINESS OF BANKING. I.T.A.NO.2185/13 C.O.03/14 :- 3 -: 2.4 THE ID CIT(A) FAILED TO NOTE THAT THE KERALA HI GH COURT IN THE CASE OF KERALA COOPERATIVE CONSUMERS FEDERATION LIMITED VS CIT 170 ITR 455 HAS HELD THAT THE WORDS 'PROVIDING CREDIT FACILITIES' OCCURRING IN SEC. 80P(2)(A)(I) SHOULD BE CONSTRUED AS SIMILAR OR AKIN TO THE 'CARRYING ON THE BUSINESS OF BANKING.' RELIANCE IS ALSO PLACED ON THE DECISION O F THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF U.P COOPERATIVE CANE UNION 114 ITR 70, WHEREIN IT WAS H ELD THAT THE EXPRESSION 'PROVIDING CREDIT FACILITY' DOE S TAKE ITS COLOR FROM THE ACTIVITY OF BANKING. ' 3. IN THE COURSE OF HEARING, THE REVENUE VEHEMENTLY A RGUES THAT THE CIT(A) OUGHT TO HAVE AFFIRMED THE DISALLOW ANCE IN QUESTION OF ` 46.72 CRORES IN VIEW OF THE FACT THAT THE ASSESSE E IS COVERED BY THE PROVISIONS OF SECTION 80P(4) INTRODUCED IN THE ACT WITH EFFECT FROM 1.4.2007 RELEVANT TO IMPUGNED ASSESSMENT YEAR 2007- 08. ACCORDINGLY, IT PRAYS FOR ACCEPTANCE OF THE APPEAL. 4. PER CONTRA, THE SUBMISSIONS OF THE ASSESSEE ARE TH AT IT IS ONLY A CO-OPERATIVE CREDIT SOCIETY WHICH PROVIDES C REDIT FACILITIES TO ITS AFFILIATED MEMBERS FOR CONSTRUCTION OF HOUSES ETC. AND NOT A CO- OPERATIVE BANK AS POSTULATED BY RELEVANT STATUTORY PROVISION. TO SUPPORT FINDINGS OF THE CIT(A), IT QUOTES THE PLEAD INGS IN THE CROSS OBJECTIONS AND CASE LAW OF TAX APPEAL NOS.442, 443 AND 863 OF 2013 CIT VS JAFARI MOMIN VIKAS CO-OP CREDIT SOCIETY LTD (GUJ. HIGH COURT) DATED 15.1.2014, [2013] 38 TAXMANN.COM 322 (CHENNAI TRIB) ITO VS THE KASIPALAYAM PRIMARY AGRICULTURAL CO-OPERATIVE B ANK LTD. AND I.T.A.NO.2185/13 C.O.03/14 :- 4 -: AHMEDABAD TRIBUNAL DECISION DATED 31.1.2014 IN I. T.A.NO.410/ AHD/2013 ITO VS MEGHRAJ TALUKA PRIMARY TEACHERS CO-OPERATIVE CREDIT SOCIETY LTD & OTHERS. IN LIGHT THEREOF, THE ASSESSEE PRAYS FOR CONFIRMING THE SAME. 5. THE ASSESSEE, THE TAMILNADU CO-OPERATIVE HOUSING FEDERATION LTD., IS A SOCIETY REGISTERED UNDER STAT E CO-OPERATIVE LAWS. IT PROVIDES CREDIT FACILITY TO ITS MEMBERS FOR CONS TRUCTION OF HOUSES IN RURAL AS WELL AS URBAN AREAS. ON 5.2.2008, THE AS SESSEE HAD FILED ITS RETURN DISCLOSING INCOME AS ` NIL BY RAISING A CLAIM OF DEDUCTION U/S 80P PERTAINING TO TOTAL INCOME OF ` 46,72,73,961-. THE SAME WAS SUMMARILY PROCESSED. 6. WE FIND FROM THE CASE FILE THAT ON 1.3.2012, THE AS SESSING OFFICER FORMED REASONS TO BELIEVE THAT DEDUCTION AV AILABLE U/S 80P DOES NOT APPLY IN ASSESSEES CASE BY VIRTUE OF SU B-SECTION(4) INSERTED BY THE LEGISLATURE IN THE ACT WITH EFFECT FROM 1.4.2007 RELEVANT TO THE IMPUGNED ASSESSMENT YEAR. PER ASSESSING OFF ICER, THIS DEDUCTION COULD BE AVAILED ONLY BY A CO-OPERATIVE S OCIETY WHICH IS A PRIMARY AGRICULTURAL SOCIETY OR A PRIMARY CO-OPERAT IVE AGRICULTURAL AND RURAL DEVELOPMENT BANK WHEREAS THE ASSESSEE WAS A CO-OPERATIVE SOCIETY ACCEPTING DEPOSITS AND GRANTING LOANS TO IT S MEMBERS. I.T.A.NO.2185/13 C.O.03/14 :- 5 -: THEREAFTER, ON 26.3.2013, HE FRAMED RE-ASSESSMENT A ND DISALLOWED THE AFORESAID AMOUNT BY DENYING DEDUCTION. HE HELD IN THE RE-ASSESSMENT ORDER THAT THE ASSESSEE IS NOT IN BANKING BUSINESS BUT PROVIDED CREDIT FACILITY TO ITS MEMBERS. IN HIS VIEW, A CO-OPERATI VE FEDERATION DOING BANKING ACTIVITIES WITH CO-OPERATIVE CREDIT SOCIETI ES OR PAT PEDHIS WHO ARE MEMBERS LOCATED IN URBAN AREAS IS NOT ENTITLED FOR RELIEF UNDER THE PROVISIONS OF SECTION 80P R.W.S 2(24)(VIIA) OF THE ACT FROM ASSESSMENT YEAR 2007-08. 7. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL. IN THE LOWER APPELLATE PROCEEDINGS, THE CIT(A) HAS FIRST EXAMINE D AT LENGTH THE RELEVANT STATUTORY PROVISION I.E 80P OF THE ACT PRE SCRIBING DEDUCTION TO CO-OPERATIVE SOCIETIES AND HOLDS THAT THE SAME RECO GNIZES VARIOUS CLASSES OF CO-OPERATIVE SOCIETIES FOR THE PURPOSE O F AFORESAID RELIEF. SECONDLY, HE TAKES INTO CONSIDERATION SECTION 2(19) OF THE ACT TO HOLD THAT ANY REGISTERED CO-OPERATIVE SOCIETY UNDER STAT E OR CENTRAL LAW IS ALSO A RECOGNIZED SOCIETY U/S 80P OF THE ACT. THE REAFTER, THE CIT(A) DISCUSSES AT LENGTH NATURE AND AMBIT OF A CO-OPERAT IVE SOCIETY VIS--VIS THEIR ESTABLISHMENTS/ADMINISTRATION INCLUDING THR EE TIER ADMINISTRATIVE SYSTEM UNDER STATE/CENTRAL LAWS AND DRAWS A DISTINC TION BETWEEN A CO- OPERATIVE SOCIETY AND A CO-OPERATIVE BANK TO CONCLU DE THAT THE FORMER I.T.A.NO.2185/13 C.O.03/14 :- 6 -: ONE IS A TERM HAVING MORE WIDER CONNOTATION THAN A CO-OPERATIVE BANK AS PER THE BANKING REGULATION ACT. THEREAFTER, HE OPINES THAT THOUGH CO-OPERATIVE BANKS ARE DISTINCT CLASS OF CO-OPERATI VE SOCIETIES THEY STILL COME UNDER WIDER SCOPE OF THE LATTER SITUATION I.E CO-OPERATIVE BANKS ARE ALSO SOMETIMES CO-OPERATIVE SOCIETIES, BUT NOT VICE VERSA. IN THE END, HE TREATS THE ASSESSEE AS ELIGIBLE FOR IMPUGN ED DEDUCTION AS UNDER: IN VIEW OF THIS DEFINITION, ONE HAS TO SEE WHETHER THE ASSESSEE IS A CO-OPERATIVE BANK OR NOT. CLAUSE (B) OF THE EXPLANATION TO SECTION 80-P(4), IN ANY CASE, IS NOT APPLICABLE IN THE CASE OF ASSESSEE. IN CASE ASSESSE E IS A CO-OPERATIVE BANK, THE ASSESSEE WILL BE HIT BY SECT ION 80- P(4) BUT IN CASE ASSESSEE IS NOT A CO-OPERATIVE BAN K, IT WILL NOT HIT BY SECTION 80-P(4) AND THE ASSESSEE WI LL BE ENTITLED FOR THE DEDUCTION U/S.80P(2)(A)(I). THE CO - OPERATIVE BANK IS DEFINED IN PART V OF THE BANKING REGULATION ACT, 1949 AS UNDER: - SEC.5(CCI) 'CO-OPERATIVE BANK' MEANS A STATE CO- OPERATIVE BANK, A CENTRAL CO-OPERATIVE BANK AND A PRIMARY CO-OPERATIVE BANK: PERUSAL OF THE FACTS OF THE INSTANT CASE, CLEARLY SHOWS THAT THE ASSESSEE IS NOT A PRIMARY CO-OPERATI VE SOCIETY. THIS IS EVIDENT FROM THE FACTS THAT THE AS SESSEE IS AT THE APEX LEVEL IN THE STATE OF TAMIL NADU AND ITS M EMBERS ARE THE PRIMARY CO-OPERATIVE HOUSING SOCIETIES. THE REFORE, THE THIRD LIMB OF THE ABOVE DEFINITION OF 'CO-OPERA TIVE BANK' I.E. 'PRIMARY CO-OPERATIVE BANK' IS NOT APPLICABLE TO THE ASSESSEE'S CASE. FROM THE DEFINITION OF CO-OPERATIVE BANK IT IS APPA RENT THAT CO-OPERATIVE BANK MEANS 'A STATE CO-OPERATIVE BANK', 'A CENTRAL CO-OPERATIVE BANK' AND 'A PRIMARY CO- OP ERATIVE BANK'. AS MENTIONED ABOVE, THE ASSESSEE IS AN APEX BODY OPERATING AT THE STATE LEVEL AND ITS MEMBERS ARE PR IMARY CO- OPERATIVE HOUSING SOCIETIES AND HENCE THE ASSESSEE CAN I.T.A.NO.2185/13 C.O.03/14 :- 7 -: NOT CONSIDERED AS A 'PRIMARY CO-OPERATIVE SOCIETY'. THE ASSESSING OFFICER HAS NOT MADE OUT ANY CASE AS TO HOW THE ASSESSEE BECOMES A 'STATE CO-OPERATIVE BANK' OR A ' CENTRAL CO-OPERATIVE BANK'. FURTHER, NEITHER THE ASSESSEE'S NAME INCLUDES THE WORDS 'BANK ' / 'BANKER ' / 'BANKING ', NOR ITS ACTIVITIES ARE COMING UNDER THE PURVIEW OF RBI. THE REFORE, IT CAN NOT BE HELD THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BANKING. THE NEXT ISSUE TO BE SEEN IS WHETHER THE PRIMARY OBJECT OR PRINCIPLE BUSINESS OF THE ASSESSEE IS TRA NSACTIONS OF THE BANKING BUSINESS. IN CASE THE PRIMARY OBJECT S OR PRINCIPLE BUSINESS IS TRANSACTION OF BANKING BUSINE SS, THE ASSESSEE WILL BE CO-OPERATIVE BANK (SUBJECT TO THE NAME OF THE ASSESSEE AND THE RBI'S REGULATIONS, AS MENTIONE D ABOVE). THE BANKING BUSINESS HAS BEEN DEFMED UJS.5( B) OF THE BANKING REGULATION ACT AS UNDER: - SEC.5(B) 'BANKING' MEANS THE ACCEPTING, FOR THE PURPOSE OF LENDING OR INVESTMENT, OF DEPOSITS OF MONEY FROM THE PUBLIC, REPAYABLE ON DEMAND OR OTHERWISE, AND WITHDRAWAL BY CHEQUE, DRAFT, ORDER OR OTHERWISE: FROM THE ABOVE DEFINITION, IT IS CLEAR THAT THE BAN KING MEANS ACCEPTING THE DEPOSITS OF MONEY FROM THE PUBL IC WHICH IS REPAYABLE ON DEMAND OR OTHERWISE AND WITHD RAWAL OF THESE DEPOSITS BY CHEQUE, DRAFT OR OTHERWISE AND THESE DEPOSITS ARE ACCEPTED FOR THE PURPOSE OF LENDING OR INVESTMENT. THIS CLEARLY STATES THAT THE DEPOSITS M UST BE ACCEPTED FROM THE PUBLIC FOR THE PURPOSE OF LENDING OR INVESTMENT. THESE DEPOSITS MUST BE REPAYABLE ON DEM AND OR OTHERWISE AND COULD BE WITHDRAWN BY THE DEPOSITOR BY CHEQUE, DRAFT OR OTHERWISE. AS MENTIONED EARLIER, ANY SOCIETY REGISTERED WITH T HE CO-OPERATIVE SOCIETIES ACT, IS A 'CO-OPERATIVE SOCIETY' FOR THE PURPOSE OF SEC.80-P OF THE ACT. THE SECOND REQUIREMENT IS THE NATURE OF THE ACTIVITY. THE 'CO- OPERATIVE SOCIETY' SHOULD BE ENGAGED EITHER IN (I) BANKING BU SINESS OR (II) PROVIDING CREDIT FACILITIES, TO ITS MEMBERS. N O DOUBT, PROVIDING CREDIT FACILITIES TO THE MEMBERS IS AKIN TO THE BUSINESS OF BANKING, AS HELD BY SEVERAL COURTS. BUT PROVIDING CREDIT FACILITIES TO THE MEMBERS ALONE WI LL NOT CONSTITUTE THE BUSINESS OF BANKING. THE WORD BANKIN G BUSINESS IS MUCH MORE WIDER THAN JUST PROVIDING CRE DIT (LOAN) FACILITIES. THE BANKING ALSO INCLUDES THE AC TIVITIES LIKE I.T.A.NO.2185/13 C.O.03/14 :- 8 -: ACCEPTING THE DEPOSITS ETC. ABOVE ALL, THE BANKING ACTIVITY IS SUBJECT TO THE RBI RULES AND REGULATIONS (EXCEPT AT PRIMARY CO-OPERATIVE SOCIETIES LEVEL). THUS, UNLESS THE ACT IVITIES ARE GOVERNED BY RBI RULES AND REGULATIONS, IT CAN NOT B E SAID THAT THE CO-OPERATIVE SOCIETY IS ENGAGED IN THE BUS INESS OF BANKING. IN THE INSTANT CASE, THE ASSESSEE'S PRIMARY OBJECT IS TO FINANCE ITS MEMBER- 'PRIMARY CO-OPERATIVE HOUSING SOCIETIES' IN THE STATE OF TAMIL NADU. IT IS NOT PE RMITTED TO ACCEPT ANY DEPOSITS FROM THE PUBLIC OR ANY OTHER P ERSON. THE SOURCES OF FUNDS IN THE ASSESSEE'S HANDS ARE THE GOVERNMENT GRANTS AND BORROWINGS FROM OTHER SCHEDUL ED BANKS. THE ASSESSING OFFICER'S OBSERVATIONS THAT TH E ASSESSEE IS ACCEPTING THE DEPOSITS FROM THE PUBLIC IS NOT FACTUALLY CORRECT. THEREFORE, IT IS AMPLY CLEAR THA T THE ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF BANKING. FURTHER, AS MENTIONED ABOVE, IN ORDER TO ENGAGE IN THE BANKING BUSINESS, THE CO-OPERATIVE SOCIETY MUST CON TAIN THE WORDS 'BANK' OR 'BANKER' OR 'BANKING' IN ITS NA ME, WHICH IS NOT PRESENT IN THE PRESENT ASSESSEE'S CASE . THUS, IN NUTSHELL, THE WORDS 'CO-OPERATIVE BANK' ME ANS, - A CO-OPERATIVE SOCIETY HAVING THE WORDS 'BANK ' OR 'BANKER ' OR 'BANKING ' IN ITS NAME, AND ENGAGED IN THE BUSINESS OF BANKING AND COMING UNDER THE PURVIEW OF RBI (IN THE CASE OF APEX OR DISTRICT LEV EL CO-OPERATIVE BANKS), OR A CO-OPERATIVE SOCIETY HAVING ITS PAID UP SHARE CAP ITAL AND RESERVES OF NOT LESS THAN ONE LAKH OF RUPEES AND ENGAGED IN THE BUSINESS OF BANKING (IN THE CASE OF PRIMARY CO-OPERATIVE SOCIETIES). WHERE AS IN THE INSTANT CASE, THE ASSESSEE I. E. M/S. TAMIL NADU CO-OPERATIVE HOUSING FEDERATION LTD, IS THE APEX BODY AT THE STATE LEVEL. ALL ITS MEMBERS ARE P RIMARY CO-OPERATIVE HOUSING SOCIETIES IN THE STATE OF TAMI L NADU. THERE ARE NO DISTRICT LEVEL HOUSING SOCIETIES, AS T HE SYSTEM IS THE 2-TIER SYSTEM. THE ASSESSEE I.E. M/S. TAMIL NADU CO-OPERATIVE HOUSING FEDERATION LTD, CAN NOT B E CONSIDERED AS A 'CO-OPERATIVE BANK', BECAUSE NEITHER THE WORDS ' BANK ' OR ' BANKER ' OR 'BANKING' ARE INCORPORATED IN THE NAME, NOR THE ASSESSEE IS I.T.A.NO.2185/13 C.O.03/14 :- 9 -: NOT COMING UNDER THE PURVIEW O F RBI (THE TWO MANDATORY REQUIREMENTS OF A CO-OPERATIVE SOCIETY TO B E CAL L ED A 'CO - OPERATIVE BANK', AT THE APEX/DISTRICT LEVEL ). IN VIEW OF THE ABOVE TWO FACTS, THE ASSESSEE IS NOT PERMITTED TO DO THE BUSINESS OF BANKING. IN FACT, T HE ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF BANKING. THEREFORE, THE ASSESSEE, BEING THE APEX BODY AND NOT THE PRIMARY SOCIETY IN THE HIERARCHY, CAN NOT B E CONSIDERED AS A 'CO-OPERATIVE BANK' BY NO STRETCH O F IMAGINATION. ON THE OTHER HAND, THE ASSESSEE'S PRIM ARY OBJECT IS TO PROVIDE CREDIT FACILITIES (I.E. FINANC IAL ACCOMMODATION) TO ITS MEMBERS (WHO ARE THE PRIMARY CO- OPERATIVE HOUSING SOCIETIES IN THE STATE OF TAMIL N ADU). THEREFORE, THE ASSESSEE FALLS UNDER THE DEFINITION OF 'CO- OPERATIVE CREDIT SOCIETY', AS PROVIDED AT CLAUSE (CCII) OF 56 OF BANKING REGULATION ACT, AS APPLICABLE TO THE CO- OPERATIVE SOCIETIES. THUS, THE ASSESSEE SOCIETY IS ONLY A 'CO-OPERATI VE SOCIETY' SATISFYING THE REQUIREMENTS OF SUB-SECTION S (1) AND (2) OF SECTION 80-P OF THE ACT. SINCE THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF PROVIDING CREDIT FACILIT IES (I.E. FINANCIAL ACCOMMODATION) TO ITS MEMBERS, THE ASSESS EE IS A CLEAR 'CO-OPERATIVE CREDIT SOCIETY'. THEREFORE ITS INCOME IS ELIGIBLE FOR DEDUCTION UNDER THE SECOND L IMB (I.E. PROVIDING CREDIT FACILITIES TO ITS MEMBERS) OF U/S. 80-P(2)(A)(I) OF THE ACT. FURTHER SINCE THE ASSESSEE IS NOT FALLI NG UNDER THE CATEGORY OF 'CO-OPERATIVE BANK', THE PROVISIONS OF SUB- SECTION (4) OF SECTION 80-P ARE NOT APPLICABLE TO T HE INSTANT ASSESSEE. FOR THIS PURPOSE RELIANCE IS ALSO PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: 1. ACIT V. BULDANA URBAN CO-OPERATIVE CREDIT SOCIETY LTD [20131 153 TTJ 728 (NAG):. SECTION 80P OF THE INCOME-TAX ACT, 1961 - DEDUCTIONS - INCOME OF CO-OPERATIVE SOCIETIES [COOPERATIVE BANKS] - ASSESSMENT YEAR 2007-08 TO 2009-10 - ASSESSEE HAD INCOME FROM BANKING AND NON-BANKING ACTIVITIES - ASSESSING OFFICER TOOK A VIEW THAT ASSESSEE WAS NOT A CREDIT CO-OPERATIVE SOCIETY AND THEREFORE NOT ELIGIBLE FOR DEDUCTION UNDER SECT ION 80P(2){A){I) - IT WAS UNDISPUTED THAT ASSESSEE WAS I.T.A.NO.2185/13 C.O.03/14 :- 10 -: NEITHER A STATE CO-OPERATIVE BANK NOR A CENTRAL CO- OPERATIVE BANK - FURTHER BYE-LAWS OF ASSESSEE PERMITTED ADMISSION OF ANY CO-OPERATIVE SOCIETY TO BE MEMBER OF ASSESSEE INDICATING THAT ASSESSEE COULD NOT BE REGARDED AS A PRIMARY CO-OPERATIVE BANK UNDER SECTION 5 (CCV) OF BANKING REGULATION ACT. 1949. AND. THUS. IT WOULD NOT BE HIT BY SECTION 80P(4) - WHETHER IN VIEW OF ABOVE, ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) WAS TO BE ALLOWED - HELD, YES. 2. DCIT V. JAYALAKSHMI MAHILA VIVIDODESHAGALA SOUHARDA SAHAKARI LTD.[2012]137 ITD 163(PANAJI)/ [2012]149 TTJ 356 (PANJI) / [2012] 23 T AXMANN.COM 313(PANAJI): SECTION 80P OF THE INCOME-TAX ACT, 1961, READ WITH SECTIONS 5(B), 5(CCI) AND 5(CCV) OF THE BANKING REGULATION ACT, 1949 - DEDUCTIONS - INCOME OF CO- OPERATIVE SOCIETIES - ASSESSMENT YEARS 2007-08 TO 2009-10 - ASSESSEE WAS A SOCIETY ENGAGED IN BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS BY GRANTING LOANS FOR PURPOSES LIKE BUSINESS, HOUSI NG, VEHICLES, ETC. - SECTION 80P DEDUCTION WAS DENIED BY ASSESSING OFFICER IN VIEW OF AMENDMENT BROUGHT INTO SECTION 80P WHEREBY CO- OPERATIVE BANKS WERE EXCLUDED FROM PURVIEW OF SECTION 80P WITH EFFECT FR OM 1-4- 2007 - WHETHER SINCE ON FACTS NONE OF ASSESSEE'S AIMS AND OBJECTS ALLOWED ASSESSEE TO ACCEPT DEPOSITS OF MONEY FROM PUBLIC FOR PURPOSE OF LENDING OR INVESTMENT, IT COULD NOT BE SAID THAT PRINCIPLE BUSINESS OF ASSESSEE WAS BANKING BUSINESS - HELD, YES - WHETHER, THEREFORE, ASSESSEE COULD NOT BE REGARDED AS A PRIMARY CO-OPERATIVE BANK AND, HENCE, WAS ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) - HELD, YES. 3. ITO V. JANKALYAN NAGRI SAHAKARI PAT SANSTHA LTD. [2012] 54 SOT 60 (PUNE)(URO)/[2012]24 TAXMANN.COM 127 (PUNE) : SECTION 80P OF THE INCOME-TAX ACT, 1961 - DEDUCTION - INCOME OF CO-OPERATIVE SOCIETIES - WHETHER CO-OPERATIVE CREDIT SOCIETY IS DISTINCT AND SEPARATE FROM CO- OPERATIVE BANK NOR CAN IT BE SAID AS A PRIMARY CO-OPERATIVE BANK WITHIN MEANING OF BANKING REGULATION ACT, 1949 - HELD, YES - WHETHER, THEREFORE, A CO-OPERATIVE CREDIT SOCIETY IS ENTITLED FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) - HELD, YES. I.T.A.NO.2185/13 C.O.03/14 :- 11 -: IN VIEW OF THE ABOVE REASONS AND DISCUSSIONS, THE ASSESSEE IS NOT A 'COOPERATIVE BANK' AND HENCE NOT HIT BY THE PROVISIONS OF SUB-SECTION (4) OF SEC.80-P OF THE ACT. ON THE OTHER HAND, THE ASSESSEE, BEING A 'CO- OPERATIVE SOCIETY' AND ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBER-PRIMARY C O- OPERATIVE HOUSING SOCIETIES, THE ASSESSEE IS ELIGIB LE FOR DEDUCTION U/S.80-P(2)(A)(I) OF THE ACT. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE ASSESSEE 'S CLAIM OF DEDUCTION U/S.80-P OF THE ACT. THE ASSESSE E SUCCEEDS IN ITS APPEALS IN THIS REGARD. THEREFORE, THE REVENUE IS IN APPEAL. 8. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CAS E FILE. THE JUDICIAL PRECEDENTS (SUPRA) HAVE ALSO BEEN PERU SED. THE QUESTION FRAMED BY THE PARTIES BEFORE US IS AS TO WHETHER TH E ASSESSEE, A CO- OPERATIVE SOCIETY PROVIDING CREDIT FACILITY TO ITS MEMBERS IS A CO- OPERATIVE BANK OR NOT SO AS TO BE COVERED BY SECTIO N 80P(4) OF THE ACT DENYING DEDUCTION AFORESAID. IN THIS BACKDROP, WE FIND FROM THE CASE LAW (SUPRA) THAT CO-OPERATIVE SOCIETIES HAVE NOT B EEN HELD AT PAR WITH CO-OPERATIVE BANKS. EVEN IN CASE OF A SOCIETY ALIK E ASSESSEE, PROVIDING CREDIT FACILITY, SIMILAR PRINCIPLES HAVE BEEN ECHOE D BY THE CO-ORDINATE BENCHES OF THE TRIBUNAL (SUPRA). WE MAKE IT CLEA R THAT THE REVENUE HAS FAILED TO FILE ANY PAPER BOOK OR EVIDENCE SO AS TO PROVE THAT THE ASSESSEE/CO-OPERATIVE SOCIETY IS A CO-OPERATIVE BAN K WHOSE CLAIM FOR DEDUCTION U/S 80P IS HIT BY SUB-SECTION(4). IN TH ESE CIRCUMSTANCES, I.T.A.NO.2185/13 C.O.03/14 :- 12 -: WE UPHOLD THE CIT(A)S ORDER GRANTING DEDUCTION TO THE ASSESSEE U/S 80P OF THE ACT AND REJECT CONTENTIONS OF THE REVENU E. 9. SINCE WE HAVE UPHELD THE CIT(A)S ORDER, THE ASSES SEES CROSS OBJECTIONS SUPPORTING THE SAME HAVE BECOME IN FRUCTUOUS. 10. TO SUM UP, REVENUES APPEAL IS DISMISSED AND A SSESSEES CROSS OBJECTIONS HAVE BECOME INFRUCTUOUS. ORDER PRONOUNCED ON THURSDAY, THE 20 TH OF FEBRUARY, 2014, AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S. S. GODARA) JUDICIAL MEMBER DATED: 20 TH FEBRUARY, 2014 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR