The Managalore Co-Operative Building Society Ltd., V. CIT,

ITA 1856/BANG/2013

• Counselvise Citation: 185621114 RSA 2013
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRISCILLA SINGSIT CITIIIDR
• Keywords: Gift; Question of law
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.1856/BANG/2013 ASSESSMENT YEAR : 2009-10 THE MANGALORE CO-OPERATIVE BUILDING SOCIETY LTD., I FLOOR, CLASSIC ARCADE, K.S. RAO ROAD, MANGALORE 575 003. PAN : AAATT 4242D VS. THE COMMISSIONER OF INCOME TAX, MANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI KASHINATH KALMATH, ADVOCATE RESPONDENT BY : MS. PRISCILLA SINGSIT, CIT-III(DR) DATE OF HEARING : 23.09.2014 DATE OF PRONOUNCEMENT : 26.09.2014 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORD ER DATED 18.11.2013 OF THE COMMISSIONER OF INCOME-TAX (CIT ), MANGALORE RELATING TO ASSESSMENT YEAR 2009-10. ITA NO.1856/BANG/2013 PAGE 2 OF 11 2. THE ASSESSEE IS A CREDIT CO-OPERATIVE SOCIETY FO RMED PRIMARILY WITH A VIEW TO PROVIDING CREDIT FACILITIES TO ITS MEMBERS FOR THE PURPOSE OF HOUSING. IT FILED A RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING NIL INCOME, AFTER CLAIMING DEDUCTION U/S. 80P(2) OF THE ACT. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S. 143 (3) OF THE ACT ACCEPTING THE RETURN FILED BY THE ASSESSEE. 3. THE CIT, IN EXERCISE OF HIS POWERS U/S. 263 OF T HE ACT, WAS OF THE VIEW THAT THE AFORESAID ORDER OF THE AO WAS ERRONEO US AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IN THIS REGARD, THE CIT WAS OF THE VIEW THAT SECTION 80P(4) OF THE ACT WAS INTRODUCED W.E.F. 1.4 .2007, WHEREBY IT WAS MADE CLEAR THAT THE PROVISIONS OF SECTION 80P SHALL NOT APPLY TO ANY CO- OPERATIVE BANK, OTHER THAN A PRIMARY AGRICULTURAL C REDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL OR RURAL DEVELOPMENT BANK . ACCORDING TO THE CIT, THE ASSESSEE DID NOT FALL WITHIN ANY OF THE EXCEPTI ONS MENTIONED IN SECTION 80P(4) OF THE ACT AND THEREFORE THE AO WHILE COMPLE TING THE ASSESSMENT U/S. 143(3), OUGHT NOT TO HAVE ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 80P(2) OF THE ACT. A SHOW CAUSE NO TICE WAS ACCORDINGLY ISSUED BY THE CIT. 4. THE ASSESSEE, IN REPLY TO THE SHOW CAUSE NOTICE, SUBMITTED THAT THE PROVISIONS OF SECTION 80P(4) OF THE ACT APPLY ONLY TO A CO-OPERATIVE BANK AND NOT TO A CO-OPERATIVE SOCIETY CARRYING ON BANKI NG ACTIVITY. IT WAS ITA NO.1856/BANG/2013 PAGE 3 OF 11 SUBMITTED THAT PART V OF THE BANKING REGULATIONS AC T, 1949 WERE NOT ATTRACTED TO IT. RELIANCE WAS PLACED ON THE FOLLO WING DECISIONS:- (1) DCIT, CENTRAL CIRCLE, PANAJI V. JAYALAKSHMI MA HILA VIVIDODESHAGALA SOUHARDA SAHAKARI LTD. (ITA NOS. 1 TO 3 (PNJ)/1012 DATED 30/3/2012.) (2) YESHWANTPUR CREDIT CO-OPERATIVE SOCIETY LTD. ( ITA NO.717/BANG/2011 DATED 11.4.2012) (3) BANGALORE COMMERCIAL TRANSPORT CREDIT CO-OPERA TIVE SOCIETY LTD., (ITA.NO.1069/BANG/2010 DATED 8/4/2011 ) 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE LD. CIT CAME TO THE FOLLOWING CONCLUSIONS:- I) THE ASSESSEE IS MAINLY ENGAGED IN THE ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS FROM OUT OF THE DE POSITS COLLECTED AND INCOME GENERATED THEREOF WHICH IS IN THE NATURE OF BANKING BUSINESS. II) BY VIRTUE OF PROVISIONS OF SECTION 2(24)(VIIA), PROVIDING CREDIT FACILITIES BY A COOPERATIVE SOCIETY WITH ITS MEMBERS ARE TO BE INCLUDED AS PROFITS & GAINS OF BUSINESS O F BANKING. III) THE MEMBERSHIP TO THE ASSESSEE SOCIETY IS NOT RESTRICTIVE AND ALSO SATISFIES THE CONDITIONS PRESCRIBED FOR TR EATING IT AS A PRIMARY CO-OPERATIVE BANK IN ACCORDANCE WITH P ART V OF THE BANKING REGULATION ACT, 1949. IV) THE ASSESSEE SATISFIES ALL THE THREE CONDITIONS WITHIN THE PURVIEW OF PRIMARY CO-OPERATIVE BANK AS PER SECTION 5(CCV) OF THE BANKING REGULATION ACT, 1949. V) THE PROVISIONS OF SECTION 80P(4) R.W.S. 2(24)(VI IA) ARE OVERRIDING SEC. 80P AS IT STOOD AFTER AMENDMENTS TO THESE PROVISIONS W.E.F. A.Y. 2007-08. ITA NO.1856/BANG/2013 PAGE 4 OF 11 VI) THE ACTIVITIES OF THE ASSESSEE ARE SIMILAR TO T HAT OF A BANK, AND ARE NOT RESTRICTIVE. VII) THE PAID-UP SHARE CAPITAL AND RESERVES WAS FAR IN EXCESS OF RS.ONE LAKH AS ON 31.3.2009 AND BYE LAWS OF THE ASS ESSEE DO NOT PERMIT MEMBERSHIP OF ANOTHER CO-OPERATIVE SO CIETY AS A MEMBER AND ALL THE CONDITIONS TO COME UNDER TH E PURVIEW OF A PRIMARY CO-OPERATIVE BANK WERE SATISFI ED. 6. THE CIT RELIED ON THE DECISION OF THE HONBLE KE RALA HIGH COURT IN THE CASE OF KERALA CO-OPERATIVE CONSUMERS FEDERATION LTD. V. CIT, 170 ITR 455 , TO COME TO THE CONCLUSION THAT THE ASSESSEE WAS A PRIMARY CO-OPERATIVE BANK. HE HELD THE ASSESSEE NO T ELIGIBLE FOR DEDUCTION U/S. 80P(2). THEREFORE THE ASSESSMENT ORDER WAS HE LD TO BE ERRONEOUS INSOFAR IT IS PREJUDICIAL TO THE INTERESTS OF REVEN UE AND ACCORDINGLY DIRECTED THE AO TO REDO THE ASSESSMENT. 7. AGGRIEVED BY THE ORDER OF THE CIT, THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. UNDER SEC.80P(2)(I) OF THE ACT WHERE THE GROSS TOTAL INCOME OF A CO-OPERATIVE SOCIETY INCLUDES INCOME FROM CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBE RS, THE SAME IS ALLOWED DEDUCTION. BY THE FINANCE ACT, 2006 W.E.F. 1-4-200 6, SUB-SECTION (4) WAS INSERTED IN SEC.80-P WHICH PROVIDES AS FOLLOWS: ITA NO.1856/BANG/2013 PAGE 5 OF 11 (4) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN RELATION TO ANY CO-OPERATIVE BANK OTHER THAN A PRIMARY AGRICULT URAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. EXPLANATION : FOR THE PURPOSES OF THIS SUB-SECTION, (A) 'CO-OPERATIVE BANK' AND 'PRIMARY AGRICULTURAL C REDIT SOCIETY' SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO TH EM IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949); (B) 'PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DE VELOPMENT BANK' MEANS A SOCIETY HAVING ITS AREA OF OPERATION CONFINED TO A TALUK AND THE PRINCIPAL OBJECT OF WHICH IS TO PROVI DE FOR LONG-TERM CREDIT FOR AGRICULTURAL AND RURAL DEVELOPMENT ACTIV ITIES. 9. IN THE CASE OF BANGALORE V. M/S. BANGALORE COMMERCIAL TRANSPORT CREDIT CO-OPERATIVE SOCIETY LTD. IN ITA NO.1069/BAN G/2010 , THIS TRIBUNAL HELD THAT SECTION 80P(4) IS APPLICABLE ONLY TO COOP ERATIVE BANKS AND NOT TO CREDIT COOPERATIVE SOCIETIES. THE INTENTION OF THE LEGISLATURE OF BRINGING IN COOPERATIVE BANKS INTO THE TAXATION STRUCTURE WAS M AINLY TO BRING IN PAR WITH COMMERCIAL BANKS. SINCE THE ASSESSEE IS A COOPERAT IVE SOCIETY AND NOT A COOPERATIVE BANK, THE PROVISIONS OF SECTION 80P(4) WILL NOT HAVE APPLICATION IN THE ASSESSEES CASE AND THEREFORE, IT IS ENTITLE D TO DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. THE FOLLOWING WERE THE RE LEVANT OBSERVATIONS OF THE TRIBUNAL:- 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE WAS DENIED THE DE DUCTION U/S 80-P(2)(A)(I) OF THE ACT FOR THE REASON OF INTRODUC TION OF SUB SECTION 4 TO SECTION 80P. SECTION 80P(4) READS AS FOLLOWS:- ITA NO.1856/BANG/2013 PAGE 6 OF 11 (4) THE PROVISIONS OF THIS SECTION SHALL NOT A PPLY IN RELATION TO ANY COOPERATIVE BANK OTHER THAN A PRIMA RY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIV E AGRICULTURAL AND RURAL DEVELOPMENT BANK. EXPLANATION: FOR THE PURPOSES OF THIS SUB-SECTION, (A) CO-OPERATIVE BANK AND PRIMARY AGRICULTURAL CREDIT SOCIETY SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949); (B) PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK MEANS A SOCIETY HAVING ITS AREA OF OPERATION CONFINED TO A TALUK AND THE PRINCIPAL OBJECT OF WHICH IS TO PROVIDE FOR LONG TERM CREDIT FOR AGRICULTURAL AND RURAL DEVELOPMENT ACTIVITIES. 9.1 THE ABOVE SUB-SECTION 4 OF SECTION 80P PROVID ES THAT DEDUCTION UNDER THE SAID SECTION SHALL NOT BE AVAILABLE TO AN Y COOPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR RURAL DEVELOPMENT BANK. FOR THE PURPOSE OF THE SAID SUB SECTION, COO PERATIVE BANK SHALL HAVE THE MEANING ASSIGNED TO IT IN PART V OF THE BA NKING REGULATION ACT, 1949. IN PART V OF THE BANKING REGULATION ACT , COOPERATIVE BANK MEANS A STATE COOPERATIVE BANK, A CENTRAL COO PERATIVE BANK AND A PRIMATE COOPERATIVE BANK. 9.2 FROM THE ABOVE SECTION, IT IS CLEAR THAT THE PR OVISIONS OF SECTION 80P(4) HAS GOT ITS APPLICATION ONLY TO COOPERATIVE BANKS. SECTION 80P(4) DOES NOT DEFINE THE WORD COOPERATIVE SOCIET Y. THE EXISTING SUB-SECTION 80P(2)(A)(I) SHALL BE APPLICABLE TO A C OOPERATIVE SOCIETY CARRYING ON CREDIT FACILITY TO ITS MEMBERS. THIS VIEW IS CLARIFIED BY CENTRAL BOARD OF DIRECT TAX VIDE ITS CLARIFICATION NO.133/06/2007-TPL DATED 9 TH MAY, 2007. THE DIFFERENCE BETWEEN A COOPERATIVE B ANK AND A COOPERATIVE SOCIETY ARE AS FOLLOWS:- ITA NO.1856/BANG/2013 PAGE 7 OF 11 NATURE COOPERATIVE SOCIETY REGISTERED UNDER BANKING REGULATION ACT, 1949 COOPERATIVE SOCIETY REGISTERED UNDER KARNATAKA COOPERATIVE SOCIETY ACT, 1959. REGISTRA -TION 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 ORDERS, GIFT CHEQUES, LOCKERS, BANK GUARANTEES ETC. 3. COOPERATIVE 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 LAWS OF THE COOPERATIVE SOCIETY. 2. SOCIETY CANNOT OPEN SAVINGS BANK ACCOUNT, CURRENT ACCOUNT, ISSUE LETTER OF CREDIT, DISCOUNTING BILLS OF EXCHANGE, ISSUE CHEQUES, DEMAND DRAFTS, PAY ORDERS, GIFT CHEQUES, LOCKERS, BANK GUARANTEES ETC. 3. SOCIETY CANNOT ACT AS CLEARING AGENT, FOR CHEQUES, DDS, PAY ORDERS AND OTHER FORMS. 4. SOCIETY ARE BOUND BY RULES AND REGULATIONS AS SPECIFIED BY IN THE COOPERATIVE SOCIETIES ACT. FILING OF RETURNS COOPERATIVE BANKS HAVE TO SUBMIT ANNUAL RETURN TO RBI EVERY YEAR. SOCIETY HAS TO SUBMIT THE ANNUAL RETURN TO REGISTRAR OF SOCIETIES. INSPEC- TION RBI HAS THE POWER TO INSPECT ACCOUNTS AND OVERALL FUNCTIONING OF THE BANK. REGISTRAR HAS THE POWER TO INSPECT ACCOUNTS AND OVERALL FUNCTIONING OF THE BANK. PART V PART V OF THE BANKING REGULATION ACT IS APPLICABLE TO COOPERATIVE BANKS. PART V OF THE BANKING REGULATION ACT IS NOT APPLICABLE TO COOPERATIVE BANKS. USE OF WORDS THE WORD BANK, BANKER, BANKING CAN BE USED BY A COOPERATIVE BANK. THE WORD BANK, BANKER, BANKING CANNOT BE USED BY A COOPERATIVE SOCIETY. 9.3 IF THE INTENTION OF THE LEGISLATURE WAS NOT TO GRANT DEDUCTION U/S 80P(2)(A)(I) TO COOPERATIVE SOCIETIES CARRYING ON T HE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS, THEN TH IS SECTION WOULD HAVE BEEN DELETED. THE NEW PROVISO TO SECTION 80P(4) WH ICH IS BROUGHT INTO STATUTE IS APPLICABLE ONLY TO COOPERATIVE BANKS AND NOT TO CREDIT COOPERATIVE SOCIETIES. THE INTENTION OF THE LEGISL ATURE OF BRINGING IN COOPERATIVE BANKS INTO THE TAXATION STRUCTURE WAS M AINLY TO BRING IN PAR WITH COMMERCIAL BANKS. SINCE THE ASSESSEE IS A COO PERATIVE SOCIETY AND NOT A COOPERATIVE BANK, THE PROVISIONS OF SECTI ON 80P(4) WILL NOT HAVE APPLICATION IN THE ASSESSEES CASE AND THEREFO RE, IT IS ENTITLED TO ITA NO.1856/BANG/2013 PAGE 8 OF 11 DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. HENCE, WE A RE OF THE VIEW THAT THE ORDER OF THE CIT(A) IS CORRECT AND IN ACCORDANC E WITH LAW AND NO INTERFERENCE IS CALLED FOR. 10. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF T AX APPEAL NO.442 OF 2013 WITH TAX APPEAL NO.443 OF 2013 WITH TAX APPEAL NO.863 OF 2013 IN THE CASE OF CIT VS. JAFARI MOMIN VIKAS CO-OP CREDIT SOCIETY LTD . BY JUDGMENT DATED 15.1.2014 HAD TO DEAL WITH THE FO LLOWING QUESTION OF LAW:- WHETHER THE HONBLE TRIBUNAL IS CORRECT IN ALLOWIN G DEDUCTION UNDER SECTION 80P(2)(A)(I) TO ASSESSEES SOCIETY EV EN THOUGH SAME IS COVERED UNDER SECTION 80P(4) RWS 2(24) (VIIA) BE ING INCOME FROM PROVIDING CREDIT FACILITIES CARRIED ON BY A CO -OPERATIVE SOCIETY WITH ITS MEMBER? THE HONBLE COURT HELD AS FOLLOWS: 4. AS PER SECTION 80P(4), THE PROVISIONS OF SECTI ON 80P WOULD NOT APPLY IN RELATION TO ANY CO-OPERATIVE BANK OTHER TH AN PRIMARY AGRICULTURAL CREDIT SOCIETY OR PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. AS PER THE EXPLANATION, THE TERMS CO- OPERATIVE BANK AND PRIMARY AGRICULTURAL CREDIT SO CIETY SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN PART V OF THE BANKING REGULATION ACT, 1949. 5. ASSESSING OFFICER HELD THAT BY VIRTUE OF SECTIO N 80P(4), THE RESPONDENT ASSESSEE WOULD NOT BE ENTITLED TO BENEFI TS OF DEDUCTION UNDER SECTION 80P. CIT(APPEALS) AS WELL AS THE TRIB UNAL REVERSED THE DECISION OF THE ASSESSING OFFICER ON THE PREMISE TH AT THE RESPONDENT ASSESSEE NOT BEING A BANK, EXCLUSION PROVIDED IN SU B-SECTION(4) OF SECTION 80P WOULD NOT APPLY. THIS, IRRESPECTIVE OF THE FACT THAT THE RESPONDENT WOULD NOT FALL WITHIN THE EXPRESSION PR IMARY AGRICULTURAL CREDIT SOCIETY. ITA NO.1856/BANG/2013 PAGE 9 OF 11 6. HAD THIS BEEN THE PLAIN STATUTORY PROVISIONS UN DER CONSIDERATION IN ISOLATION, IN OUR OPINION, THE QUE STION OF LAW COULD BE STATED TO HAVE ARISEN. WHEN, AS CONTENDED BY THE AS SESSEE, BY VIRTUE OF SUBSECTION(4) ONLY CO-OPERATIVE BANKS OTHER THAN THOSE MENTIONED THEREIN WERE MEANT TO BE EXCLUDED FOR THE PURPOSE O F DEDUCTION UNDER SECTION 80P, A QUESTION WOULD ARISE WHY THEN LEGISL ATURE SPECIFIED PRIMARY AGRICULTURAL CREDIT SOCIETIES ALONG WITH PR IMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANKS FOR EXCLUS ION FROM SUCH EXCLUSION AND IN OTHER WORDS, CONTINUED TO HOLD SUC H ENTITY AS ELIGIBLE FOR DEDUCTION. HOWEVER, THE ISSUE HAS BEEN CONSIDER ABLY SIMPLIFIED BY VIRTUE OF CBDT CIRCULAR NO.133 OF 2007 DATED 9.5 .2007. CIRCULAR PROVIDES AS UNDER:- SUBJECT: CLARIFICATION REGARDING ADMISSIBLY OF DED UCTION UNDER SECTION 80P OF THE INCOME-TAX ACT, 1961. 1. PLEASE REFER TO YOUR LETTER NO.DCUS/30688/2007, DATED 28.03.2007 ADDRESSED TO CHAIRMAN, CENTRAL BOA RD OF DIRECT TAXES, ON THE ABOVE GIVEN SUBJECT. 2. IN THIS REGARD, I HAVE BEEN DIRECTED TO STATE T HAT SUB-SECTION(4) OF SECTION 80P PROVIDES THAT DEDUCTI ON UNDER THE SAID SECTION SHALL NOT BE ALLOWABLE TO AN Y CO- OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CR EDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. FOR THE PURPOSE OF THE SAID SUB-S ECTION, CO-OPERATIVE BANK SHALL HAVE THE MEANING ASSIGNED T O IT IN PART V OF THE BANKING REGULATION ACT, 1949. 3. IN PART V OF THE BANKING REGULATION ACT,CO- OPERATIVE BANK MEANS A STATE CO-OPERATIVE BANK, A CENTRAL CO-OPERATIVE BANK AND A PRIMARY CO-OPERATIV E BANK. 4. THUS, IF THE DELHI CO OP URBAN T & C SOCIETY LT D. DOES NOT FALL WITHIN THE MEANING OF CO-OPERATIVE B ANK AS DEFINED IN PART V OF THE BANKING REGULATION ACT, 19 49, SUBSECTION(4) OF SECTION 80P WILL NOT APPLY IN THIS CASE. 5. THE ISSUES WITH THE APPROVAL OF CHAIRMAN,CENTRA L BOARD OF DIRECT TAXES. ITA NO.1856/BANG/2013 PAGE 10 OF 11 7. FROM THE ABOVE CLARIFICATION, IT CAN BE GATHER ED THAT SUB- SECTION(4) OF SECTION 80P WILL NOT APPLY TO AN ASSE SSEE WHICH IS NOT A CO-OPERATIVE BANK. IN THE CASE CLARIFIED BY C BDT, DELHI COOP URBAN THRIFT & CREDIT SOCIETY LTD. WAS UNDER CONSIDERATION. CIRCULAR CLARIFIED THAT THE SAID ENT ITY NOT BEING A COOPERATIVE BANK, SECTION 80P(4) OF THE ACT WOULD N OT APPLY TO IT. IN VIEW OF SUCH CLARIFICATION, WE CANNOT ENTERTAIN THE REVENUES CONTENTION THAT SECTION 80P(4) WOULD EXCLUDE NOT ON LY THE CO- OPERATIVE BANKS OTHER THAN THOSE FULFILLING THE DES CRIPTION CONTAINED THEREIN BUT ALSO CREDIT SOCIETIES, WHICH ARE NOT COOPERATIVE BANKS. IN THE PRESENT CASE, RESPONDENT ASSESSEE IS ADMITTEDLY NOT A CREDIT CO-OPERATIVE BANK BUT A CRE DIT CO- OPERATIVE SOCIETY. EXCLUSION CLAUSE OF SUB-SECTION( 4) OF SECTION 80P, THEREFORE, WOULD NOT APPLY. IN THE RESULT, TAX APPEALS ARE DISMISSED. 11. IN A RECENT JUDGMENT DATED 5.2.2014 OF THE HON BLE HIGH COURT OF KARNATAKA IN CIT V. SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA BAGALKOT IN ITA NO.5006/2013 DATED 5.2.2014, THE HONBLE JURISDICTIONAL HIGH COURT TOOK THE VIE W THAT WHEN THE STATUS OF THE ASSESSEE IS A CO-OPERATIVE SOCIET Y AND NOT A CO-OPERATIVE BANK, THE ORDER PASSED BY THE AO EXTENDING THE BENE FIT OF EXEMPTION FROM PAYMENT OF TAX 80P(2)(A)(I) OF THE ACT IS CORRECT A ND SUCH AN ORDER IS NOT ERRONEOUS AND THEREFORE, JURISDICTION U/S. 263 OF T HE ACT CANNOT BE INVOKED. 12. IN VIEW OF THE AFORESAID DECISIONS, CONSIDERING THE FACTS OF THE ASSESSEES CASE, WE HOLD THAT THE ASSESSEE IS A CO- OPERATIVE SOCIETY ENTITLED TO CLAIM DEDUCTION U/S. 80P(2)(A)(I) OF TH E ACT. ACCORDINGLY WE SET ASIDE THE ORDER U/S. 263 OF THE LD. CIT. IT IS ORD ERED ACCORDINGLY. ITA NO.1856/BANG/2013 PAGE 11 OF 11 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF SEPTEMBER , 2014 . SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDE VAN ) ACCOUNTANT MEMBER JUDICIAL MEM BER BANGALORE, DATED, THE 26 TH SEPTEMBER , 2014 . /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.