Swabhamani Souharda Credit Co-operative Ltd, Bengaluru V. Income Tax Officer, ward-5(2)(2), Bengaluru

ITA 2876/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1093 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 26-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: G SUBRAMANIAM
• Keywords: Gift; Business income; Question of law; Competent authority
• Section: 143(3); 234B; 32; 37; 6; 56; 263; 28; 10; 2; 11; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE S HRI JASON P BOAZ , ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER I.T . A. NO. 2876 & 2631 /BANG/20 17 (ASSESSMENT YEAR : 20 13 - 14 & 2014 - 15 ) M/S. SWABHIMANI SOUHARDA CREDIT CO - OPERATIVE LTD., NO.125, DIAGONAL ROAD, V.V.PURAM, BANGALORE - 560 004 . . APPELLANT. VS. INCOME TAX OFFICER, WARD 5(2)(3), BANGALORE. .. RESPONDENT. APPELLANT BY : SHRI G. SUBRAMANIAM,ADVOCATE. R E SPONDENT BY : DR. P. V. PRADEEP KUMAR, ADDL. CIT (D.R) DATE OF H EARING : 28.08.2018. DATE OF P RONOUNCEMENT : 14. 09 .201 8 . O R D E R PER BENCH : TH E S E APPEAL S BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) - 5 , BANGALORE DT.29.09.2017 FOR TH E ASSESSMENT YEAR 20 12 - 13 AND DT.23.08.2017 FOR ASSESSMENT YEAR 2014 - 15. AS COMMON ISSUES ARE INVOLVED, THESE APPEALS WERE HEARD 2 IT A NO S . 2876 & 2631 /BANG/20 17 TOGETHER AND WE DEEM IT APPROPRIATE TO DISPOSE OFF THESE APPEALS BY WAY OF THIS COMBINED ORDER. 2. 1 BRIEFLY STATED, THE FACTS OF THE CASE, AS BORNE OUT FROM THE ORDERS OF THE AUTHORITIES BELOW, ARE THAT THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT . THE AUTHORITIES BELOW REJECTED THE ASSESSEE'S CLAIM FOR THE REASON THAT THE PRIMARY / PRINCIPAL B USINESS OF THE ASSESSEE IS TRANSACTING IN BANKING BUSINESS AND ITS PAID UP CAPITAL BEING IN EXCESS OF RS.1 LAKH, THEREFORE THE ASSESSEE IS A PRIMARY CO - OPERATIVE BANK AND IT DOES NOT FALL UNDER THE SECOND CATEGORY OF CO - OPERATIVE CRE DIT SOCIETIES AS ENVISA GED UNDER SECTION 80P OF THE ACT. IN COMING TO THIS FINDING THE ASSESSING OFFICER ALSO PLACED RELIANCE ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY LTD. VS. ITO IN C.A. NOS.1622 TO 1629 OF 2010 WHEREIN IT WAS HELD THAT INTEREST EARNED BY CO - OPERATIVE SOCIETIES ON SURPLUS FUNDS INVESTED IN SHORT TERM DEPOSITS ARE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P OF THE ACT. 2.2 AGGRIEVED BY THE ORDERS OF ASSESSMENT FOR ASSESSMENT YEARS 2013 - 14 AND 2014 - 15, TH E ASSESSEE FILED APPEALS FOR THESE TWO YEARS BEFORE THE CIT (APPEALS) 5, BANGALORE. THE LEARNED CIT (APPEALS) 3 IT A NO S . 2876 & 2631 /BANG/20 17 DISMISSED THE ASSESSEE'S APPEALS VIDE THE IMPUGNED ORDERS DT.29.09.2017 FOR ASSESSMENT YEAR 2013 - 14 AND DT.23.8.2017 FOR ASSESSMENT YEAR 2014 - 1 5. WHILE DISPOSING THE AFORESAID APPEALS, THE LEARNED CIT (APPEALS) HAS ALSO CONSIDERED THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF CITIZEN CO - OPERATIVE SOCIETY LTD. VS. ACIT 397 ITR 1 (SC) 3. AGGRIEVED BY THE ORDERS OF THE CIT (APPEALS) 5, BANGALORE FOR ASSESSMENT YEAR 2013 - 14 DT.29.9.2017 AND FOR ASSESSMENT YEAR 2014 - 15 DT.23.8.2017, THE ASSESSEE HAS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL. IN THESE APPEALS FOR ASSESSMENT YEARS 2013 - 14 AND 2014 - 15, THE ASSESSEE HAS FILED ALMOST I DENTICAL ELABORATE, ARGUMENTATIVE GROUNDS IN SUPPORT OF ITS CONTENTIONS ; EXCEPT FOR DIFFERENCE IN THE FIGURES OF INCOME, CLAIMS ETC AND IN THE AMOUNTS AND DATES RELEVANT TO EACH YEAR. IN VIEW OF THIS WE EXTRACT HEREUNDER THE GROUNDS RAISED FOR ASSESSMENT YEAR 2013 - 14 : - 1. THE APPELLANT BEING AGGRIEVED BY THE ORDER DTD.29 - 09 - 2017 PASSED IN ITA NO. 88W - 5(2)(3)/CIT(A) 5/2016 - 17 DATED 29.09.2017 BY THE COMMISSIONER OF INCOME TAX (APPEALS) 5, BANGALORE (FOR SHORT CITA ) UNDER SECTION 250 OF THE INCO ME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT ) AND ALSO THE ORDER DTD. 24 - 03 - 2016 PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 BY THE (FOR SHORT AO ), THE APPELLANT IS PREFERRING THIS STATUTORY APPEAL BEFORE THIS HON BLE TRIBUNAL , UNDER TH E PROVISIONS OF SECTION 246A(1) OF THE ACT, FOR THE REDRESSAL OF VARIOUS GRIEVANCES RAISED IN THE GROUNDS OF APPEAL AND ALSO IN THE STATEMENT OF FACTS. A COPY OF THE ORDER 4 IT A NO S . 2876 & 2631 /BANG/20 17 UNDER SECTION 143(3) OF INCOME TAX AND A COPY OF THE ORDER PASSED UNDER SECTION 143 (3) OF THE ACT ARE ENCLOSED HEREWITH AND MARKED AS ANNEXURE S - 1 & 2 . 2. THE APPELLANT IS A CREDIT CO - OPERATIVE SOCIETY REGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT 1997 AND IS REGULARLY ASSESSED TO TAX IN THE OFFICE OF THE ITO, WARD 5(2)(3), BENGAL URU, WITH PAN: AAFAS 0181 E. 3. THE APPELLANT FILED A RETUR N OF INCOME ELECTRONICALLY ON 28/09/2013 . THE APPELLANT DECLARED A TOTAL INCOME OF RS. NIL, AND CLAIMED THE REFUND OF RS. 45,590/ - FOR THE ASSESSMENT YEAR 2013 - 14 . 4. THE RETURN OF INCOME OF THE APPELLANT WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961. SUBSEQUENTLY A NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 WAS ISSUED TO THE APPELLANT. 5. THE APPELLANT DULY APPEARED BEFORE THE LEARNED AO & FURNISHED THE DETAIL S AS SOUGHT FOR FROM TIME TO TIME. 6. THE LEARNED AO PASSED THE ASSESSMENT ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 DATED 24.03 .2016 AND DETERMINED THE TOTAL ASSESSED INCOME OF THE APPELLANT AT RS. 89,13,199 / - AS AGAINST THE NIL INCOME RETURNED, BY DIS ALLOWING ITS DUE CLAIM OF DEDUCTIONS U/S 80P (2)(A)(I) OF RS. 89,13,199 / - AND THE ALTERNATE CL AIM OF DEDUCTION OF RS.36,29,340 / - U/S 80P(2)(D). 7. THUS AGGRIEVED BY THE ORDER OF THE AO, THE A PPELLANT HAS PREFERRED AN APPEAL BEFORE THE 1ST RESPONDENT AND ST ATED AS FOLLOWS: I) THE LEARNED INCOME TAX OFFICE R HAS VIDE HIS ORDER DATED 24/03 /2016 U/S 143(3) HELD THE APPELLANT CO - OPERATIVE SOCIETY TO BE A PRIMARY CREDIT CO - OPERATIVE BANK AND THEREFORE HAS COME TO THE WRONG CONCLUSION THAT SINCE THE APPELLANT IS CARR YING ON THE BUSINESS OF BANKING AS INTERPRETED UNDER THE BANKING REGULATION ACT, 1949, IT IS NOT ENTITLED TO THE DEDUCTION EITHER U/S 80P(2)(A)(I) OR U/S 80P (2)(D) IN VIEW OF THE PROVISIONS OF SECTION 80P(4) OF THE INCOME TAX ACT, 1961. SECTION 80P OF THE ACT IS A BENEVOLENT PROVISION WHICH IS ENACTED BY THE PARLIAMENT IN ORDER TO ENCOURAGE AND PROMOTE GROWTH OF CO - OPERATIVE SECTOR IN THE ECONOMIC LIFE OF THE COUNTRY. IT WAS DONE PURSUANT TO DECLARED POLICY OF THE GOVERNMENT. WITH THE INSERTION OF SUB - SEC TION (4) BY THE FINANCE ACT, 2006, WHICH IS IN THE NATURE OF A PROVISO TO THE AFORESAID PROVISION, IT IS MADE CLEAR THAT SUCH A DEDUCTION SHALL NOT BE ADMISSIBLE TO A CO - OPERATIVE BANK. HOWEVER, IF IT IS A PRIMARY 5 IT A NO S . 2876 & 2631 /BANG/20 17 AGRICULTURE CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURE AND RURAL DEVELOPMENT BANK, THE DEDUCTION WOULD STILL BE PROVIDED. THUS, CO - OPERATIVE BANKS ARE NOW SPECIFICALLY EXCLUDED FROM THE AMBIT OF SECTION 80P OF THE ACT. II) IN THIS REGARD THE APPELLANT STATES THAT THE TERM PRIMARY CREDIT CO - OPERATIVE BANK IS DEFINED BY THE BANKING REGULATION ACT, 1949 UNDER PART V (56)(CCV) AS FOLLOWS. (CCV) PRIMARY CO - OPERATIVE BANK MEANS A C O - OPERATIVE S OCIETY, OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY, - 1. THE PRIMARY OBJECT OR PRINCIPAL BUSINE SS OF WHICH IS THE TRANSACTION OF BANKING BUSINESS; 2. THE PAID - UP SHARE CAPITAL AND RESERVE OF WHICH ARE NOT LESS THAN ONE LAKH OF RUPEES; AND 3. THE BYE - LAW OF WHICH DO NOT PERMIT ADMISSION OF ANY OTHER C O - OPERATIVE S OCIETY AS A MEMBER PROVIDED THAT THIS SUB - CLAUSE SHALL NOT APPLY TO THE ADMISSION OF A CO - OPERATIVE BANK AS A MEMBER BY REASON OF SUCH CO - OPERATIVE BANK SUBSCRIBING TO THE SHARE CAPITAL OF SUCH CO - OPERATIVE SOCIETY OUT OF FUNDS PROVIDED BY THE STATE GOVERNMENT FOR THE PURPOSE; III) THE WORD BAN KING IS INTERPRETED UNDER THE PROVISIONS OF SECTION 5 OF BANKING REGULATION ACT 1949 WHICH STATES............ 5. INTERPRETATION IN THIS ACT], UNLESS THERE IS ANYTHING REPUGNANT IN THE SUBJECT OR CONTEXT, - [(A) '.................................... .... (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 WITHDRAW ABLE BY CHEQUE, DRAFT, AND ORDER OR OTHERWISE. AS SEEN FROM THE INTERPRETATION GIVEN UNDER SE CTION 5(B) OF THE BANKING REGULATION ACT, 1949, A BUSINESS CONCERN IS SAID TO BE CARRYING ON THE BANKING BUSINESS IF IT IS ACCEPTING DEPOSITS FROM 6 IT A NO S . 2876 & 2631 /BANG/20 17 THE PUBLIC , FOR THE PURPOSE OF LENDING OR INVESTMENT AND WHICH IS REPAYABLE ON DEMAND OR OTHERWISE AN D WITHDRAWAL BY CHEQUE, DRAFT OR OTHERWISE. IV) IN THE APPELLANT S CASE IT IS EVIDENT THAT IT IS NOT CARRYING ON THE BANKING BUSINESS, AS INTERPRETED BY THE BANKING REGULATION ACT, 1949, FIRSTLY BECAUSE, IT CANNOT AND IT HAS NOT BEEN ACCEPTING THE DEPOSITS FR OM THE PUBLIC, IT CAN AND IT HAS BEEN ACCEPTING THE DEPOSITS FROM ITS MEMBERS ONLY AND LENDING AND PROVIDING SERVICES ONLY TO ITS MEMBERS. THE RELEVANT B YE - LAWS IN CHAPTER - 3 POINT NO.5 (8) AND CHAPTER - 4 POINT NO.6(1)(C) ARE REPRODUCED HEREUNDER FOR READY REFERENCE: ..CHAPTER - 3 POINT NO 5(8): TO PROVIDE BANKING SERVICES AND FACILITIES OTHER THAN THAT OF PRINTING CHEQUES AND WITHDRAWAL OF MONEY THROUGH CHEQUES CHAPTER - 4 POINT NO 6(1)(C): A CORPORATE BODY FORM ED UNDER ANY OF THE LAWS IN FORCE (EXCEPT A CO - OPERATIVE REGISTERED UNDER THE KARNATAKA SOUHARDHA SAHAKARI ACT) . THE B YELAW NO. 5(8) OF CHAPTER - 3 - UNDER THE HEAD THE AIMS AND OBJECTIVES STATES THAT TO PROVIDE BANKING SERVICES AND FACILITIES OTHER THAN THAT OF PRINTING CHEQUES AND WITHDRAWAL OF MONEY THROUGH CHEQUES. THE B YE - LAWS OF THE ASSESSEE DO NOT PROVIDE FOR ACCEPTING DEPOSITS FROM PUBLIC/NON - MEMBERS AND DO NOT PROVIDE FOR LENDING MONEY TO NON - MEMBERS/PUBLIC. THEREFORE, IT IS CLEAR FRO M THE ABOVE, THE APPELLANT CO - OPERATIVE/ SOCIETY IN NOT CARRYING ON THE BANKING BUSINESS AS INTERPRETED UNDER THE BANKING REGULATION ACT, 1949 SINCE IT CANNOT ACCEPT DEPOSITS FROM THE PUBLIC, AND FURTHER THE DEPOSITS ACCEPTED FROM THE MEMBER CANNOT BE WITH DRAWN BY WAY OF CHEQUE, DRAFT OR ORDER OR OTHERWISE IN VIEW OF THE ABOVE SAID BYELAW OF CHAPTER - 3 POINT NO.5 (8) OF THE APPELLANT CO - OPERATIVE. 7 IT A NO S . 2876 & 2631 /BANG/20 17 V) SECONDLY THE APPELLANT S BYE LAWS DO NOT PROHIBIT THE ADMISSION OF ANY C O - OPERATIVE OTHER THAN A C O - OPERATIVE F ORMED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997. THEREFORE 2 OF THE 3 CONDITIONS REQUIRED TO BE HELD AS A PRIMARY C O - OPERATIVE B ANK ARE NOT SATISFIED IN THE CASE OF THE APPELLANT IN VIEW OF THE ABOVE SAID BYE LAW OF CHAPTER - 4 POINT NO.6(1)(C) OF THE APPELLANT CO - OPERATIVE. VI) THEREFORE IN VIEW OF THE ABOVE, THE APPELLANT CANNOT BE HELD TO BE CARRYING ON THE BANKING BUSINESS AS ITS PRIMARY OR PRINCIPAL BUSINESS. VII) THE APPELLANT THUS IS CARRYING ON THE FINANCIAL BUSINESS WHICH IS LIMITED ONLY TO ITS MEM BERS , WITHOUT PROVIDING THEM THE FACILITY OF CHEQUE, DRAFT, ORDER, ETC., FOR WITHDRAWAL OF DEPOSITS AND NOT PROVIDING THE SERVICES OF ISSUING BANK GUARANTEES ETC., 8. THE APPELLANT STATES THAT IT IS RIGHTFULLY ENTITLED TO THE DEDUCTION U/S 80P(2)(A)(I) O F THE ACT, SINCE IT IS NOT A CO - OPERATIVE BANK AS DEFINED UNDER THE PROVISIONS OF S ECTION 80P. (1) IT ALSO RELIES ON THE CIRCULAR OF THE CBDT VIDE CIRCULAR NO.133, DATED 09 - 05 - 2007 IN THIS REGARD. 9. THE CIRCULAR OF THE CBDT VIDE CIRCULAR NO.133, DATED 09.05.2007 MENTIONED ABOVE IS REPRODUCED HEREIN BELOW, FOR THE PURPOSES OF YOUR READY REFERENCE, IN THE SAME MANNER AS STATED IN THE ABOVE REFERRED HON BLE GUJARAT HIGH COURT IN THE CASE OF SURAT VANKAR SAHAKARI SANGH LTD. .. SUBJECT: CLARIFICAT ION REGARDING ADMISSIBILITY OF DEDUCTION UNDER S ECTION 80P OF THE INCOME - TAX ACT, 1961. A. PLEASE REFER TO YOUR LETTER NO.DCUS/30688/2007, DATED 28.03.2007 ADDRESSED TO CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES, ON THE ABOVE GIVEN SUBJECT. B. IN THIS R EGARD, I HAVE BEEN DIRECTED TO STATE THAT SUB - SECTION (4) OF SECTION 80P PROVIDES THAT DEDUCTION UNDER THE SAID SECTION SHALL NOT BE ALLOWABLE TO ANY CO - OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. FOR THE 8 IT A NO S . 2876 & 2631 /BANG/20 17 PURPOSE OF THE SAID SUB - SECTION, CO - OPERATIVE BANK SHALL HAVE THE MEANING ASSIGNED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949. C. 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 - OPERATIVE BANK. D. THUS, IF THE DELHI CO OP URBAN T & C SOCIETY LTD. DOES NOT FALL WITHIN THE MEANING OF CO - OPERATIVE BANK AS DEFINED IN PART V OF THE BANKING REGULATION ACT, 1949, SUB - SECTI ON (4) OF SECTION 80P WILL NOT APPLY IN THIS CASE. E. THE ISSUES WITH THE APPROVAL OF CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES . 10. FURTHER RELYING UPON THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COU RT OF K ARNATAKA, HIGH COURT OF GUJARAT , HIGH COURT OF ALLAHABAD AND ALSO THE INCOME TAX APPELLATE TRIBUNAL AND ALSO THE CBDT CIRCULARS, THE APPELLANT HEREBY DEMONSTRATES HOW AND WHY IT IS NOT A BANK BUT ONLY A CO - OPERATIVE SOCIETY . CO - OPERATIVE BAN K CO - OPERATIVE SOCIETY NATURE & REGISTRATION CO - OPERATIVE BANK IS A CO - OPERATIVE SOCIETY REGISTERED UNDER THE STATE OF MULTI - STATE CO - OPERATIVE ENACTMENTS AND ALSO POSSESSING BANKING LICENCE UNDER THE BANKING REGULATION ACT, 1949 CO - OPERATIVE SOCIETY REG ISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT 1997 AND DOES NOT POSSESS THE LICENCE UNDER THE BANKING REGULATION ACT 1949. NATURE OF BUSINESS 1. AS DEFINED IN SECTION 6 OF BANKING REGULATION ACT. 2. CAN OPEN SAVINGS BANK ACCOUNT, CURRENT ACCOUNT, O VERDRAFT 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. 1. AS PROVIDE D IN THE BYE LAWS OF THE CO - OPERATIVE SOCIETY AS APPROVED BY THE STATE OR CENTRAL GOVERNMENTS. 2. SOCIETY CAN OPEN SAVINGS ACCOUNT, CURRENT ACCOUNT GIVE LOCKERS FACILITY ETC., HOWEVER IT CANNOT ISSUE LETTER OF CREDIT, CHEQUES, 9 IT A NO S . 2876 & 2631 /BANG/20 17 3. CO - OPERATIVE BANKS CAN HAVE THE MEMBERSHIP OF CLEARING HOUSE AND AC T 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) UNDER THE BANKING REGULATION ACT AND THE RESERVE BANK OF INDIA ACT. 5. THE CO - OPERATIVE BANKS ARE GOVERNED BY AND REGULATED BY BOTH THE RESERVE BANK OF INDIA AND ALSO THE STATE OR CENTRAL GOVERNMENTS DEPENDING UPON UNDER WHICH LAW I.E. STATE CO - OPERATIVE LAW OR MULTI - STATE CO - OPERATIVE LAW THEY ARE REGISTERED. DEMAND DRAFTS, PAY ORDERS, GIFT CHEQUES, BANK GUARANTEES ETC. AND CANNOT DISCOUNT BILLS OF EXCHANGE. 3. SOCIETY CANNOT ACT AS CLEARING AGENT, FOR CHEQUES, DDS, PAY ORDERS AND OTHER FORMS AND CANNOT BECOME THE MEMBER OF CLEARING HOUSE. 4. SOCIETY IS REGULATED BY THE GOV ERNMENT OF KARNATAKA AND ALSO THE KARNATAKA STATE FEDERAL CO - OPERATIVE LTD. BODY FORMED UNDER THE PROVISIONS OF SECTION 53(7)(A)(I) OF THE KSS ACT 1997 AND BOUND BY THEIR DIRECTIONS AND CIRCULARS AND INSTRUCTIONS ISSUED UNDER LAW/RULES FROM TIME TO TIME. 5. THE SOCIETY IS NOT CONTROLLED OR REGULATED BY THE RESERVE BANK OF INDIA. FILING OF RETURNS CO - OPERATIVE BANKS HAVE TO SUBMIT ANNUAL AND PERIODICAL RETURNS TO RBI. SOCIETY HAS TO SUBMIT THE ANNUAL RETURN TO THE REGISTRAR OF SOCIETIES AND THE KARNATAKA STATE SOUHARDA FEDERAL CO - OPERATIVE LTD. INSPECTION RBI HAS THE POWER TO INSPECT ACCOUNTS AND OVERALL REGISTRAR OF SOCIETIES AND THE KARNATAKA STATE 10 IT A NO S . 2876 & 2631 /BANG/20 17 FUNCTIONING OF THE CO - OPERATIVE BANK. SOUHARDA FEDERAL CO - OPERATIVE LTD HAVE THE POWER TO INSPECT THE A CCOUNTS AND OVERALL FUNCTIONING OF THE CO - OPERATIVE.. PART V PART V OF THE BANKING REGULATION ACT IS APPLICABLE TO CO - OPERATIVE BANKS. PART V OF THE BANKING REGULATION ACT IS NOT APPLICABLE TO CO - OPERATIVE SOCIETIES. USE OF WORDS THE WORD BANK , BANKER , BANKING CAN BE USED BY A CO - OPERATIVE BANK. THE WORD BANK , BANKER , BANKING CANNOT BE USED BY A CO - OPERATIVE SOCIETY. ABOUT CHEQUES, ETC. THE CO - OPERATIVE BANK CAN ISSUE THE CHEQUES, DEMAND DRAFTS, PAY ORDERS , BANK GUARANTEES AND ACCEPT THE CHEQUES OF THE PUBLIC/ACCOUNT HOLDER/MEMBER FOR CLEARANCE THROUGH CLEARING HOUSE. THE CO - OPERATIVE SOCIETY CANNOT ISSUE THE CHEQUES, DEMAND DRAFTS, PAY ORDERS, BANK GUARANTEES AND ACCEPT THE CHEQUES OF THE PUBLIC/ACCOUNT HO LDER/ MEMBER FOR CLEARANCE THROUGH CLEARING HOUSE. 11. THEREFORE, IT IS EVIDENT FROM THE ABOVE THAT THE LIMITED BANKING BUSINESS BEING CARRIED ON BY THE ASSESSEE CO - OPERATIVE IS CONFINED ONLY TO ITS MEMBERS AND IT DOES NOT CONVERT THE ASSESSEE CO - OPERAT IVE INTO CO - OPERATIVE BANK AS CONTEMPLATED UNDER THE PROVISIONS OF S ECTION 80P(4) OF THE INCOME TAX ACT 1961. 12. THEREFORE THE ENTIRE BUSINESS INCOME OF THE CO - OPERATIVE SOCIETIES IS ELIGIBLE FOR DEDUCTIONS U/ S 80P(2)(A)(I) OF THE INCOME TAX ACT 1961, SINCE THEY ARE NOT CARRYING ON THE BUSINESS ACTIVITIES IN A MANNER AMOUNTING TO THE BUSINESS OF A BANK AS PROVIDED BY THE PART V OF THE BANKING R EGULATION ACT 1949. 11 IT A NO S . 2876 & 2631 /BANG/20 17 13. FURTHER, THE LEARNED AO HAS RELIED ON THE DECISION OF THE HON BLE SUPREME COURT IN TO TGARS CO - OPERATIVE S ALE SOCIETY LTD., IN APPEAL NO.1622/2010 DECIDED ON 8 TH FEBRUARY 2010, TO DENY THE DEDUCTION OF INTEREST INCOME DERIVED FROM THE INVESTMENTS OF RESERVE FUNDS AS CONTEMPLATED UNDER THE SOUHARDA SAHAKARI ACT 1997 AND ALSO AS INSTRUCTED BY THE REGULATORY AUTHORITIES AND ALSO IN RESPECT OF THE OTHER FUNDS OF THE CO - OPERATIVE, IN THE BANKS ESPECIALLY CO - OPERATIVE BANKS AS PER SECTION 80(2)(D) AND TREATED THE SAME BY THE AO AS THE FUNDS KEPT OUTSIDE THE BUSINESS OF THE CO OPERATIVE SOCIETY AN D THAT THE DEDUCTION U/S 80P(2)(A)(I) IS NOT APPLICABLE AND THE REASON GIVEN BY THE AO IS THAT IT NEEDS TO BE APPRECIATED THAT THE REGULATORY OBLIGATIONS OF THE ASSESSEE CANNOT BE REASON TO AVAIL TAX BENEFITS UNDER THE IT ACT AND HOWEVER THE CLAIM OF THE ASSESSEE UNDER SECTION 80P(2)(A)(I) IS NOT BEING CONSIDERED, WHICH INCLUDES THE AMOUNT OF RS. 36,29,340/ - , THE CLAIM ON INTEREST INCOME IS ALSO TO BE DISALLOWED AS PER THE PROVISIONS OF SECTION 80P(2)(D). IN THIS REGARD IT IS STATED THAT THE HON BLE JURISD ICTIONAL HIGH C OURT OF KARNATAKA HAS DISTINGUISHED THE RATIO OF THE DECISION OF THE HON BLE SUPREME C OURT IN THE TOTGAR CO - OPERATIVE S ALE SOCIETY LTD., IN THE CASE OF M/S. GUTTIGEDARARA CREDIT CO - OPERATIVE SOCIETY LTD., VS. INCOME TAX OFFICER WARD 2(2), MY SORE, [2015] 60 TAXMANN.COM 215 (KARNATAKA) HOLDING THAT THE FACTS AND CIRCUMSTANCES IN THE TOTGARS CO - OPERATIVE SALE SOCIETIES CASE ARE PECULIAR TO THAT S OCIETY AND THEREFORE THE RATIO OF THE HON BLE SUPREME COURT IN THAT CASE IS NOT APPLICABLE TO ALL OTH ER CO - OPERATIVE SOCIETIES ACROSS THE BOARD. 14. THE LEARNED AO HAS NOT CONSIDERED AND APPRECIATED THE RATIO LAID DOWN BY THE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V/S NAWANSHAHAR CENTRAL COOPERATIVE BANK LTD. (2007) 160 TAXMANN 48 (SC) IN W HICH IT WAS HELD THAT THE INVESTMENTS MADE BY A BANKING CONCERN ARE PART OF THE BUSINESS OF BANKING. THEREFORE, THE INCOME ARISING FROM SUCH INVESTMENTS IS ATTRIBUTABLE TO THE BUSINESS OF BANKING FALLING UNDER THE HEAD PROFITS AND GAINS OF BUSINESS AND P ROFESSION. THEREFORE THE INTEREST INCOME EARNED OUT OF THE INVESTMENTS OF EXCESS FUNDS OF THE CO - OPERATIVE SHALL BE CONSIDERED AS THAT OF THE INCOME EARNED IN THE COURSE OF THE BUSINESS. FURTHER, THE CBDT, BASED ON THE ABOVE CITED DECISION HAS ALSO ISSUED A CIRCULAR WHICH IS EXTRACTED BELOW: CBDT CIRCULAR NO 18/2015, DATED: NOVEMBER 2, 2015 12 IT A NO S . 2876 & 2631 /BANG/20 17 SUBJECT: INTEREST FROM NON - SLR SECURITIES OF BANKS - REG. 1. IT HAS BEEN BROUGHT TO THE NOTICE OF THE BOARD THAT IN THE CASE OF BANKS, FIELD OFFICERS ARE TAKING A VIEW THAT, EXPENSES RELATABLE TO INVESTMENT IN NON - SLR SECURITIES NEED TO BE DISALLOWED U/S 57(I) OF THE ACT AS INTEREST ON NON - SLR SECURITIES IS INCOME FROM OTHER SOURCES. 2. CLAUSE (ID) OF SUB - SECTION (1) OF SECTION 56 OF THE ACT PROVIDES THAT INCOME BY WAY OF INTEREST ON SECURITIES SHALL BE CHARGEABLE TO INCOME - TAX UNDER THE HEAD INCOME FROM OTHER SOURCES , IF, THE INCOME IS NOT CHARGEABLE TO INCOME - TAX UNDER THE HEAR PROFITS AND GAINS OF BUSINESS AND PROFESSION. 3. THE MATTER HAS BEEN EXAMINED I N LIGHT OF THE JUDICIAL DECISIONS ON THIS ISSUE. IN THE CASE OF CIT VS NAWANSHAHAR CENTRAL COOPERATIVE BANK LTD. [2007] 160 TAXMAN 48(SC), THE APEX COURT HELD THAT THE INVESTMENTS MADE BY A BANKING CONCERN ARE PART OF THE BUSINESS OF BANKING. THEREFORE, THE INCOME ARISING FROM SUCH INVESTMENTS IS ATTRIBUTABLE TO THE BUSINESS OF BANKING FALLING UNDER THE HEAD PROFITS AND GAINS OF BUSINESS AND PROFESSION. 3.2 EVEN THOUGH THE ABOVE MENTIONED DECISION WAS IN THE CORRECT CO - OPERATIVE SOCIETIES/BA NKS CLAIMING DEDUCTION UNDER SECTION 80P (2)(A)(I) OF THE ACT, THE PRINCIPLE IS EQUALLY APPLICABLE TO ALL BANKS/COMMERCIAL BANKS, TO WHICH BANKING REGULATION ACT, 1949 APPLIES. 4. IN THE LIGHT OF THE SUPREME COURT S DECISION IN THE MATTER, THE ISSUE IS WE LL SETTLED. ACCORDINGLY, THE BOARD HAS DECIDED THAT NO APPEALS MAY HENCE FORTH BE FILED ON THIS GROUND BY THE OFFICERS OF THE DEPARTMENT AND APPEALS ALREADY FILED, IF ANY, ON THIS GROUND BEFORE COURTS/TRIBUNALS MAY BE WITHDRAWN/NOT PRESSED UPON. THIS MAY B E BROUGHT TO THE NOTICE OF ALL CONCERNED. (D.S.CHAUDHARY) CIT (A&J), CBDT 15. THEREFORE THE DUE RIGHT OF THE APPELLANT TO CLAIM, DEDUCTION OF ITS ENTIRE INCOME UNDER THE PROVISIONS OF SECTION 80P(2)(A)(I) OF THE ACT CANNOT BE D ENIED. 13 IT A NO S . 2876 & 2631 /BANG/20 17 16. IT IS STATED THAT THE QUESTION AS TO WHETHER A CREDIT CO - OPERATIVE REGISTERED UNDER THE STATE CO - OPERATIVE LAWS AS THAT OF THE ASSESSEE CO - OPERATIVE, CARRYING ON THE BUSINESS OF ACCEPTING THE DEPOSITS FROM ITS MEMBERS AND LENDING THE MONEY TO ITS MEMBERS, THOUGH DO NOT HAVE THE BANKING LICENCE UNDER THE BANKING REGULATION ACT, IS A CO - OPERATIVE BANK OR NOT IS SETTLED IN THE AUTHORITIES CITED HEREUNDER AND ITS NO MORE A DISPUTED QUESTION AND ON THE OTHER HAND IT IS WELL SETTLED BY INNUMERABLE JU DGMENTS. THEREFORE THE IMPUGNED ORDER OF THE AO IS MOST PERVERSE, AGAINST TO THE FACTS AND THE LAW LAID DOWN BY AND ALSO INTERPRETED IN THE JUDGEMENTS OF DIFFERENT HIGH COURTS AND ALSO THE INCOME TAX APPELLATE TRIBUNALS AND THE CIRCULARS OF CBDT. HENCE THE IMPUGNED ASSESSMENT ORDER BY THE AO IS BASED ON SURMISES AND CONJECTURES WHICH DESERVES TO BE ANNULLED IN FULL. 17. RELIANCE IS PLACED ON THE FOLLOWING CITATIONS/AUTHORITIES: (1) THE DIVISION BENCH DECISION OF THE KAR. HC, DHARWAD BENCH, IN INCOME T AX APPEAL NO.100127/2014 IN THE MATTER OF THE COMMISSIONER OF INCOME TAX AND ANR. V/S SHRI LAXMI CREDIT SOUHARDA SAHAKARI LTD. (2) THE DIVISION BENCH DECISION OF THE HON BLE KAR. HIGH COURT, DHARWAD BENCH, IN ITA NO.100042/2014 IN THE MATTER OF VENUGRAM MULTIPURPOSE CO - OP. CREDIT SOCIETY LTD. V/S THE IT OFFICER, WARD 1(2), BELGAUM. (3) THE DIVISION BENCH DECISION OF THE HON BLE HIGH COURT OF KARNATAKA IN THE CASE OF SRI.BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITA, BAGALKOT, REPORTED IN (2014) 369 ITR 86 (KAR) (4) THE DIVISION BENCH DECISION OF HON BLE HIGH COURT OF ALLAHABAD IN THE MATTER OF COMMISSIONER OF INCOME TAX V/S MUZAFFAR NAGAR KSHETRIYA GRAMIN BANK LTD. (5) THE DECISION OF THE HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT - II VS - SU RAT VANKAR SAHAKARI SANGHA LIMITED, [225 TAXMAN 162(GUJ)] (6) THE DECISION OF THE HON BLE HIGH COURT OF GUJARAT AT AHMEDABAD IN INCOME TAX APPEAL NO.442/2013, 443/2013 AND 863/2013 IN THE MATTER OF COMMISSIONER OF IT, GANDHINAGAR, V/S JAFARI MOMIN VIKAS CO - OP. SOCIETY LTD. 14 IT A NO S . 2876 & 2631 /BANG/20 17 (7) AND THE ORDER OF THE JURISDICTIONAL ITAT, BANGALORE, IN THE CASE OF ITO - WARD 4(1), BANGALORE VS - M/S. DIVYA JYOTHI CREDIT CO - OPERATIVE SOCIETY `LIMITED, ITA NO.72/BANGALORE/ 2013 (A.Y.2009 - 10). (8) THE DECISION OF THE JURISDIC TIONAL ITAT, BANGALORE BENCH A BANGALORE IN ITO V/S. M/S. KPTC & HESCOM EMPLOYEES CO - OPERATIVE CREDIT SOCIETY LTD., I.T (TP). A NO. 666/BANG/2015; ASSESSMENT YEAR: 2010 - 11. (9) THE DECISION OF THE ITAT BANGALORE IN ITA NO.1117/BANG/2014 IN THE MATTER OF THE ASST. COMMISSIONER, IT, V/S BEML EMPLOYEES CO - OP. SOCIETY LTD. (10) THE DECISION OF THE ITAT, BANGALORE, IN ITA NO.907/BANG/2015, IN THE MATTER OF INCOME TAX OFFICER, WARD - 2, BAGALKOT, V/S VIJAY SOUHAD CREDIT SAHAKARI LTD. (11) DECISIONS OF ITAT, PA NAJI BENCH, PANAJI IN THE CASE OF (I) M/S JAYALAKSHMI MAHILA VIVIDODESHAGALA SOUHARDA SAHAKARI LTD & ANOTHER IN ITA NOS.01 TO 03/PNJ/2012 AND (II) ITA NOS.04 TO 06/PNJ/2012 WHEREIN, IT HAS BEEN HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION US/ 80P(2)(A)( I) OF THE I.T. ACT , 1961. (12) DECISION OF ITAT, PANAJI BENCH, PANAJI, IN ITA NO.200/PNJ/2013 IN THE CASE OF SRI LAXMI CREDIT SOUHARDA SAHAKARI LTD, - VS - INCOME TAX OFFICER,WARD - 1, WHEREIN, IT HAS BEE N HELD THAT THE ASSESSEE IS A CO - OPERATIVE SOCIETY PROVIDING CREDIT FACILITY TO ITS MEMBERS AND NOT A CO - OPERATIVE BANK OR PRIMARY CO - OP BANK.' (13) THE DECISION OF ITAT, PANAJI BENCH, PANAJI, IN ITA NO.414/PNJ/2013 & C.O.NO.09/PNJ/2014 IN THE MATTER OF INCOME TAX OFFICER,WARD - 1(3), BELGUAM VS - THE YAMAKANMARDI LAXMI URBAN CREDIT SOUHARDA SAHAKARI NIYAMIT, YAMAKANMARDI WHEREIN THE ASSESSEE WAS CARRYING THE SAME BUSINESS AS THAT OF THE APPELLANT HEREIN AND THE TRIBUNAL HAS HELD THAT THE ASSESSEE HAS NOT TO BE REGARDED TO BE A PRIMARY CO OPERATIVE BANK AS ALL THE THREE BASIC CONDITIONS ARE NOT COMPLIED WITH, THEREFORE, IT IS NOT A CO - OPERATIVE BANK AND THE PROVISIONS OF SEC. 80P(4) ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE AND ASSESSEE IS ENTITLE D FOR DEDUCTION U/S 80P(2)(A)(I). WE, THEREFORE, CONFIRM THE ORDER OF THE CIT(A) ALLOWING DEDUCTION U/S 80P(2)(A)(I) TO THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION TO THE ASSESSEE U/S 80P(2)(A)(I) ON THE 15 IT A NO S . 2876 & 2631 /BANG/20 17 INCOME GENERATED FOR PROVIDING BANKING OR CREDIT FACILITIES TO ITS MEMBERS (14) THE DECISION OF THE ITAT AHMEDABAD D BENCH IN ITA NO.2673/AHD/2012 IN THE MATTER OF THE ASST. COMMISSIONER, IT, B.K. CIRCLE V/S THE STATE TRANSPORT EMPLOYEES CO - OP. CREDIT AND THRIFT SOCIETY LTD., (15 ) THE DECISION OF THE ITAT MUMBAI IN ITA NO.6790/MUM/2012, IN THE MATTER OF ITO, WD - 22(3) - 4, VASHI RLY, V/S M/S KULSWAMI CO - OP. SOCIETY. 17. THE ONLY REASON STATED BY THE AO IN NOT CONSIDERING AND ACCEPTING THE RATIO LAI D BY THE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF CIT VS SRI BILURU GURUBASAVA PATTANA SAHAKARI SANGH NIYAMITHA DATED 5.2.2014 AND DISALLOWING THE DEDUCTION UNDER SECTION 80P TO THE ASSESSEE IS TH AT THE SAID DECISION IS CHALLENGED BY THE REVENUE BEFORE THE HON BLE SUPREME COURT AND THAT THE SUPREME COURT HAS ADMITTED THE SAID APPEAL. THE LEARNED AO HAS FAILED TO CONSIDER THE SUBMISSIONS FOR THE ASSESSEE THAT AS LONG AS THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT, THE HIGH COURT BEING A C OURT OF RECORDS HAVING CONTEMPT JURISDICTION, IS NOT SET ASIDE AND MERE ADMISSION OF THE APPEAL OF THE REVENUE BEFORE THE SUPREME COURT, WITHOUT THERE BEING ANY STAY OF THE ORDER OF THE HIGH COURT, ALL J URISDICTIONAL SUBORDINATE COURTS AND SUBORDINATE QUASI JUDICIAL OR STATUTORY AUTHORITIES SHALL FOLLOW AND BOUND BY THE SAID RATIO AS OTHERWISE IT AMOUNTS TO CONTEMPT. FURTHER, THE SAID CASE RELATES TO AN APPEAL FILED AGAINST THE ORDER PASSED U/S 263 AND THE QUESTION INVOLVED THEREIN WAS WHETHER THE REVISIONAL AUTHORITY WAS JUSTIFIED IN INVOKING HIS POWER U/S 263 WITHOUT THE FOUNDATIONAL FACT OF THE ASSESSEE BEING A CO - OPERATIVE BANK . 18. IN THE CASE ON HAND THE AO HAS PERVERSELY HELD THAT SINCE THE D EPT S APPEAL IN CIVIL APPEAL NO.5103/2015, BEFORE THE SUPREME COURT CHALLENGING THE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF CIT VS SRI BILURU GURUBASAVA PATTANA SAHAKARI SANGH NIYAMITHA DATED 5 .2.2014, IS ADMITTED AND PENDING, THE ASSESEE S CONTENTION FOR DEDUCTION U/SEC.80 P CANNOT BE ACCEPTED AND THAT THE ASSESSEE IS NOT ENTITLED FOR THE DEDUCTION UNDER SECTION 80P. HENCE THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. 19 . IT IS STATED THAT WI THOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER AS PER THE PARITY OF REASONING OF THE DECISION OF THE HON BLE APEX COURT IN THE CASE 16 IT A NO S . 2876 & 2631 /BANG/20 17 OF KARANVIR SINGH 349 ITR 692, THE APPELLANT DENIES ITSELF IS LIABLE TO BE CHARGED WITH THE INTEREST U/S. 234B OF THE INCOME - TA X ACT 1961, UNDER THE FACTS AND CIRCUMSTANCES OF ITS CASE. 2 0 . THE APPELLANT CONTENDS THAT THE LEVY OF INTEREST UNDER THE PROVISION OF SECTIONS 234B OF THE ACT IS ALSO BAD IN LAW AS THE PERIOD, RATE, QUANTUM AND METHOD OF CALCULATION ADOPTED BY THE L EARNE D INCOME TAX OFFICER BASED ON WHICH THE INTEREST IS LEVIED IS NOT DISCERNIBLE AND IS WRONG ON THE FACTS AND THE CIRCUMSTANCES IN THE APPELLANT S CASE. 21. THE APPELLANT CHALLENGES BOTH THE ITO WARD 5(2)(3) (FOR SHORT AO ) AND CIT(APPEALS) - 5 (FOR SHORT CITA ) AND THEY HAVE TEAMED UP TO SUBVERT THE BASIC TENETS OF INCOME TAX PROVISIONS OF THE INCOME TAX ACT,1961 TO THEIR OWN WHIMS AND FANCY WITHOUT CARING FOR ANY JUDICIAL DECISIONS. IN FACT, IT WAS NOT A SUBSTANTIAL QUESTION OF LAW FOR JUDICATURE IN INTER PRET. MERELY, IT WAS A MATTER OF COMMON SENSE. TO GET STRAIGHT TO ROOT OF THE ISSUE, BOTH HAVE QUESTIONED THE BASIC LAW IN ALLOWING DEDUCTIONS UNDER SECTION 80P(2)(A)(I) TO APPELLANT S SOCIETY BEING INCOME FROM PROVIDING CREDIT FACILITIES CARRIED BY THE AP PELLANT WITH ITS MEMBERS. 22. THE APPELLANT IS OF THE OPINION THAT THE ISSUE PERTAINS TO INTERPRETATION OF SECTION 80(P)(2) AND 80P(4) OF THE INCOME TAX ACT, 1961 ( FOR SHORT THE ACT ). THE APPELLANT IS A COOPERATIVE CREDIT SOCIETY AND CLAIMS BENEFIT OF DEDUCTION UNDER SECTION 80P(1) OF THE ACT BY VIRTUE OF THE PROVISIONS CONTAINED IN SECTION 80P(2)(A)(I) OF THE ACT. AS IS WELL KNOWN UNDER SUB - SECTION (1) OF SECTION 80P THE APPELLANT SOCIETY HAS SOUGHT FOR THE DEDUCTIONS OF THE SUM SPECIFIED IN SUB - SECT ION (2) IN COMPUTING THE TOTAL INCOME. AS PER SECTION 8P (2)(I), THE SUMS REFERRED IN SUB - SECTION (1) WOULD BE IN CASE OF A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS THE WHOLE OF THE A MOUNT OF PROFITS AND GAINS OF BUSINESS ATTRIBUTABLE TO ANY ONE OR MORE OF SUCH ACTIVITIES. BOTH THE AO AND CITA CONTENDS THAT BY VIRTUE OF NEWLY AMENDED SUB - SECTION (4) OF SECTION 80P INSERTED WITH EFFECT FROM 01.04.2007 BY FINANCE ACT, 2006, SECTION 80P W OULD NOT APPLY TO THE APPELLANT. THE SECTION 80P(2)(I) CAME INTO EFFECT WITH EFFECT FROM 01.04.1968 BY FINANCE ACT, 1967 . WHEREAS, SECTION 80P(4) CAME INTO EFFECT WITH EFFECT FROM 01.04.2007 BY FINANCE ACT, 2006. IT IS IMPORTANT TO NOTE THAT WHEN SECTION 80P(4) CAME INTO FORCE ON 01.04.2007, IT DID NOT DILUTE THE PROVISIONS UNDER SECTION 80P(2)(I) WHICH CAME INTO FORCE MUCH EARLIER ON 01.04.1998. BOTH THE AO AND CITA OUGHT TO HAVE LEARNT TO READ THE PROVISIONS OF THE LAW 17 IT A NO S . 2876 & 2631 /BANG/20 17 KEEPING THE INTENTION OF THE PARLIA MENTARIANS THAN RESORTING TO CIRCUMVENT THE ISSUES FOR MONETARY GAINS FOR THE REVENUE ON THE COST OF ASSESSEES. BOTH THE AO AND CITA HAVE READ SECTION 80P(4) IN ISOLATION IN BETWEEN THE LINES WITHOUT UNDERSTANDING THE SAME IN A TRUE SPIRIT OF THE INTENTION OF THE PARLIAMENT IN ISOLATION RATHER WITH A BROAD VIEW. HOWEVER, THE SECTION 80P(4) IN THE PRESENT FORM REFERS AS UNDER : - (4) THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN RELATION TO ANY CO - OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CRE DIT 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 CREDIT SOCIETY SHALL HAVE THE MEANS RESPECTIVELY ASSIGNED TO THEM IN PA RT V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949); (B) PRIMARY CO - OPERATIVE 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 . 23. THE APPELLANT FURTHER CONTENDS THAT AS PER SECTION 80P(4), THE PROVISIONS OF SECTION 80P WOULD NOT APPLY IN RELATION TO ANY CO - OPERATIVE BANK OTHER THAN 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 SOCIETY SHALL HAVE THE MEANS RESPECTIVELY ASSIGNED TO THEM IN PART V OF THE BANKING REGULATION ACT, 1949. 24. WHEREAS, BOTH THE AO AND CITA HAVE HELD THAT BY VIRTUE OF SECTION 80P(4), THE RESPONDENT ASSESSEE WOULD NOT BE ENTITLED TO BENEFITS OF DEDUCTION UNDER SECTION 80P. IT IS PERTINENT TO POINT OUT THAT SECTION 80P(4) HAD IT BEEN THE PLAIN STATUTORY PROV ISIONS UNDER CONSIDERATION IN ISOLATION, IT WOULD HAVE BEEN CORRECT TO SAY THAT A QUESTION OF LAW COULD BE STATED TO HAVE ARISEN. IT IS THE CONTENTION OF THE APPELLANT THAT BY VIRTUE OF SUB SECTION (4) ONLY CO - OPERATIVE BANKS OTHER THAN THOSE MENTIONED THE REIN WERE MEANT TO BE EXCLUDED FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80P, A QUESTION WOULD ARISE WHEY THEN PARLIAMENT SPECIFIED PRIMARY AGRICULTURAL CREDIT SOCIETIES ALONG WITH PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANKS FOR EXCLUSIO N FROM SUCH EXCLUSION AND IN OTHER WORDS, 18 IT A NO S . 2876 & 2631 /BANG/20 17 CONTINUED TO HOLD SUCH ENTITY AS ELIGIBLE FOR DEDUCTION. HOWEVER, THE ISSUE HAS BEEN CONSIDERABLY SIMPLIFIED BY VIRTUE OF CBDT CIRCULAR NO.133 OF 2007 DATED 09 TH MAY, 2007. CIRCULAR PROVIDES AS UNDER : - SUBJECT : CLARIFICATION REGARDING ADMISSIBILITY OF DEDUCTION UNDER SECTION 80P OF THE INCOME TACT, 1961. 1. PLEASE REFER TO YOUR LETTER NO. DCUS/30688/2007, DATED 28.03.2007 ADDRESSED TO CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES, ON THE ABOVE GIVEN SUBJECT . 2. IN THIS REGARD, I HAVE BEEN DIRECTED TO STATE THAT SUB - SECTION (4) OF SECTION 80P PROVIDES THAT DEDUCTION UNDER THE SAID SECTION SHALL NOT BE ALLOWABLE TO ANY CO - OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. FOR THE PURPOSE OF THE SAID SUB - SECTION, CO - OPERATIVE BANK SHALL HAVE THE MEANING ASSIGNED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949. 3. IN PART V OF THE BANKING REGULATION ACT, CO - O PERATIVE BANK MEANS A STATE CO - OPERATIVE BANK, A CENTRAL CO - OPERATIVE BANK AND A PRIMARY CO - OPERATIVE BANK. 4. THUS, IF THE DELHI CO - OP URBAN T&C SOCIETY LTD. DOES NOT FALL WITHIN THE MEANING OF CO - OPERATIVE BANK AS DEFINED IN PART V OF THE BAN KING REGULATION ACT, 1949, SUB - SECTION (4) OF SECTION 80P WILL NOT APPLY IN THIS CASE. 5. THIS ISSUED WITH THE APPROVAL OF CHAIRMAN, CENTRAL BOARD OF DIRECT TAXES. 25. THE APPELLANT FURTHER SUBMITS THAT FROM THE ABOVE CLARIFICATIONS, IT IS GA THERED THAT SUB - SECTION (4) OF SECTION 80P WILL NOT APPLY TO THE APPELLANT SOCIETY WHICH IS NOT A CO - OPERATIVE BANK. IN THE CASE CLARIFIED BY CBDT, IT IS APPARENT THAT THE APPELLANT SOCIETY NOT BEING A CO - OPERATIVE BANK, SECTION 80P(4) OF THE ACT WOULD NOT APPLY AT ALL. THEREFORE, IT IS HELD BY THE HONO U RABLE HIGH COURT OF GUJARAT AT AHMEDABAD IN TAX APPEAL NO. 442 OF 2013 9DASTE OF JUDGEMENT/ORDER : 15.01.2014) WITH TAX APPEAL NO. 442 OF 2013 WITH TAX APPEAL NO. 863 OF 2013 (COMMISSIONER OF INCOME TAX, GAN DHINAGAR VS JAFARI NOMIN VIKAS CO - OPERATIVE CREDIT SOCIETY LTD THAT SECTION 90P(4) WOULD EXCLUDE NOT ONLY CO - OPERATIVE BANKS BUT ALSO CO - OPERATIVE CREDIT SOCIETIES AS THE EXCLUSION CLAUSE OF SUB - SECTION (4) OF 19 IT A NO S . 2876 & 2631 /BANG/20 17 SECTION 80P WOULD NOT APPLY SUCH AS APPELLANT S CO - OPERATIVE CREDIT SOCIETIES. 26. THE A PPELLANT FURTHER CONTENDS THAT THAT THE APPELLANT IS A COOPERATIVE CREDIT SOCIETY. IT'S BUSINESS IS TO PROVIDE CREDIT FACILITIES TO ITS MEMBERS. THE APPELLANT CARRIES ON BUSINESS RELATING TO THIS SPECIFIED 'ELIGI BLE ACTIVITY' UNDER SECTION 80P(2)(A)(I) OF THE ACT, HENCE, ENTITLED TO THE BENEFIT OF DEDUCTION FROM GROSS TOTAL INCOME. IN THIS CONNECTION, IT IS URGED THAT, UNDER SECTION 80P(2) OF THE ACT, THE WHOLE OF THE AMOUNT OF 'BUSINESS PROFITS' ATTRIBUTABLE TO ANY ONE OF THE ENUMERATED ACTIVITIES IS ENTITLED TO DEDUCTION. ACCORDING TO THE APPELLANT, ONE NEED NOT GO BY THE SOURCE/HEAD OF SUCH INTEREST INCOME BECA USE NO SOONER INTEREST INCOME ACCRUED TO THE APPELLANT ON THE ABOVEMENTIONED SPECIFIED DEPOSITS/SECURITIES, IT BECAME BUSINESS INCOME ATTRIBUTABLE TO THE ACTIVITY CARRIED ON BY THE APPELLANT BY PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND NO SOONER SUCH INTEREST INCOME FALLS UNDER THE HEAD 'BUSINESS PROFITS' ATTRIBUTABLE TO ONE OR MORE OF SUCH ELIGIBLE ACTIVITIES, SUCH INTEREST INCOME BECAME ELIGIBLE FOR DEDUCTION UNDER THE SAID SECTION. THE APPELLANT FURTHER CONTENDS THAT UNDER REGULATIONS 23 AND 28 REA D WITH SECTIONS 57 AND 58 OF THE KARNATAKA COOPERATIVE SOCIETIES ACT, 1959, A STATUTORY OBLIGATION WAS IMPOSED ON COOPERATIVE CREDIT SOCIETIES TO INVEST ITS SURPLUS FUNDS IN SPECIFIED SECURITIES AND, IN VIEW OF SUCH STATUTORY OBLIGATION, THE ABOVE - MENTIONE D INTEREST INCOME DERIVED FROM SHORT - TERM DEPOSITS AND SECURITIES MUST BE CONSIDERED AS INCOME DERIVED BY THE APPELLANT FROM ITS BUSINESS ACTIVITIES. IN THIS CONNECTION, IT IS PERTINENT TO MENTION THE REPORT CASE OF THE HONOURABLE SUPREME COURT OF INDIA IN ITS CIVIL APPEAL NO. 1622 OF 2010 (ARISING OUT OF S.L.P. (C. NO. 7572 OF 2009) - M/S THE TOTGAR S CO - OP SALE SOCIETY LIMITED VS INCOME TAX OFFICER, KARNATAKA ON 08 TH FEBRUARY, 2010, 27. THE APPELLANT HAS ALREADY ESTABLISHED DURING THE PROCEEDINGS BEFORE BOTH THE AO AND CITA ABOUT THE PRINCIPLE OF MUTUALITY IN THE APPELLANT S SOCIETY TO ESTABLISH THE IDENTITY BETWEEN THE CONTRIBUTORS AND PARTICIPANTS IN A TRUE SENSE BY ESTABLISHING THE DOCTRINE OF MUTUALITY. THIS WARRANTS A TOTAL AFFIRMATION ABOUT THE PRIN CIPLES ON WHICH THE APPELLANT S SOCIETY STANDS UPON. 20 IT A NO S . 2876 & 2631 /BANG/20 17 28. THE AO AND CITA ARE A MATES OF SAME BATCH AS TO THEIR MENTAL EQUILIBRIUM. BOTH THE AUTHORITIES THINK THE MOMENT A CREDIT SOCIETY ENGAGES IN THE BUSINESS OF BANKING, THEY OPINION THE CREDIT SOCIETY O UGHT TO BE REGISTERED UNDER THE BANKING REGULATION ACT, 1949. THE CASE OF KERALA STATE COOPERATIVE MARKETING FEDERATION LTD AND OTHERS VS CIT WILL SPEAK VOLUME ABOUT THIS CONFUSION. THE SC WHILE DEALING ON THE MATTER CONCERNED WITH SUB - SECTION (I) OF CLAUS E (A) OF SUB - SECTION (2)OF SECTION 80P.IN THE WORDS OF HONOURABLE SUPREME COURT, THEY OPINE THAT IT RECOGNISES TWO KINDS OF CO - OPERATIVE SOCIETIES, NAMELY: (I) THOSE CARRYING ON THE BUSINESS OF BANKING AND; (II) THOSE PROVIDING CREDIT FACILITIES TO ITS ME MBERS. 3 (1992) 3 SCC 78 4 (1983) 4 SCC 392 17 20) IN THE CASE OF KERALA STATE COOPERATIVE MARKETING FEDERATION LIMITED & ORS. V. COMMISSIONER OF INCOME TAX (1998) 5 SCC 48, THE COURT, WHILE DEALING WITH CLASSES OF SOCIETIES COVERED BY SECTION 80P OF THE A CT, HELD AS FOLLOWS: 6. THE CLASSES OF SOCIETIES COVERED BY SECTION 80 - P OF THE ACT ARE AS FOLLOWS: (A) ENGAGED IN BUSINESS OF BANKING AND PROVIDING CREDIT FACILITIES TO ITS MEMBERS; XX XX XX 29. WE MAY NOTICE THAT THE PROVISION IS INTRODUCED WITH A VIEW TO ENCOURAGING AND PROMOTING GROWTH OF COOPERATIVE SECTOR IN THE ECONOMIC LIFE OF THE COUNTRY AND IN PURSUANCE OF THE DECLARED POLICY OF THE GOVERNMENT. THE CORRECT WAY OF READING THE DIFFERENT HEADS OF EXEMPTION ENUMERATED IN THE SECTION WOULD BE TO TREAT EACH AS A SEPARATE AND DISTINCT HEAD OF EXEMPTION. WHENEVER A QUESTION ARISES AS TO WHETHER ANY PARTICULAR CATEGORY OF AN INCOME OF A COOPERATIVE SOCIETY IS EXEMPT FROM TAX WHAT HAS TO BE SEEN IS WHETHER INCOME FELL WITHIN ANY OF THE SEVERAL HEADS OF EXEM PTION. IF IT FELL W ITHIN ANY ONE HEAD OF EXEMPTION... IT WOULD BE FREE FROM TAX NOTWITHSTANDING THAT THE CONDITIONS OF ANOTHER HEAD OF EXEMPTION ARE NOT SATISFIED AND SUCH INCOME IS NOT FREE FROM TAX UNDER THAT HEAD OF EXEMPTION 21 IT A NO S . 2876 & 2631 /BANG/20 17 (III) IN THE CASE OF CO MMISSIONER OF INCOME TAX V. PUNJAB STATE CO - OPERATIVE BANK LTD. (2008) 300 ITR 24 (PUNJAB & HARYANA H.C.), WHILE DEALING WITH AN IDENTICAL ISSUE, THE HIGH COURT OF PUNJAB AND HARYANA HELD AS FOLLOWS: 8. THE PROVISIONS OF SECTION 80P WERE INTRODUCED WITH A VIEW 5 (1998) 5 SCC 48 6 (2008) 300 ITR 24 (PUNJAB & HARYANA H.C.) 18 TO ENCOURAGING AND PROMOTING THE GROWTH OF THE CO - OPERATIVE SECTOR IN THE ECONOMIC LIFE OF THE COUNTRY AND IN PURSUANCE OF THE DECLARED POLICY OF THE GOVERNMENT. THE DIFFERENT HEADS OF EXEMPTION ENUMERATED IN THE SECTION ARE SEPARATE AND DISTINCT HEADS OF EXEMPTION AND ARE TO BE TREATED AS SUCH. WHENEVER A QUESTION ARISES AS TO WHETHER ANY PARTICULAR CATEGORY OF AN INCOME OF A CO - OPERATIVE SOCIETY IS EXEMPT FROM TAX, THEN IT HAS TO BE SE EN WHETHER SUCH INCOME FELL WITHIN ANY OF THE SEVERAL HEADS OF EXEMPTION. IF IT FELL WITHIN ANY ONE HEAD OF EXEMPTION. 29. IT MEANS THAT A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING AND A CO - OPERATIVE SOCIETY PROVIDING CREDIT FAC ILITIES TO ITS MEMBERS WILL BE ENTITLED FOR EXEMPTION UNDER THIS SUB - CLAUSE. THE CARRYING ON THE BUSINESS OF BANKING BY A COOPERATIVE SOCIETY OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS ARE TWO DIFFERENT TYPES OF ACTIVITIES WHICH ARE COVERED UNDER THIS S UB - CLAUSE. XX XX XX . SO, IT IS OPINED THAT IF THE INCOME OF A SOCIETY IS FALLING WITHIN ANY ONE HEAD OF EXEMPTION, IT HAS TO BE EXEMPTED FROM TAX NOTWITHSTANDING THAT THE CONDITION OF OTHER HEADS OF EXEMPTION ARE NOT SATISFIED. A READING OF THE PROVISIONS OF SECTION 80P OF THE ACT WOULD INDICATE THE MANNER IN WHICH THE EXEMPTION UNDER THE SAID PROVISIONS IS SOUGHT TO BE EXTENDED. WHENEVER THE LEGISLATURE WANTED TO RESTRICT THE EXEMPTION TO A PRIMARY CO - OPERATIVE SOCIETY, IT WAS SO MADE CLEAR AS IS EVIDENT FROM CLAUSE (F) WITH REFERENCE TO A MILK CO - OPERATIVE SOCIETY THAT A PRIMARY SOCIETY ENGAGED IN SUPPLYING MILK IS ENTITLED TO SUCH EXEMPTION WHILE DENYING THE SAME TO A FEDERAL MILK CO - OPERATIVE SOCIETY. 30. THE AFORESAID JUDGMENT OF THE HIGH COURT CORRE CTLY ANALYSES THE PROVISIONS OF SECTION 80P OF THE ACT AND IT IS IN TUNE WITH THE JUDGMENT OF 22 IT A NO S . 2876 & 2631 /BANG/20 17 THIS COURT IN KERALA STATE COOPERATIVE MARKETING FEDERATION LIMITED (SUPRA). WITH THE INSERTION OF SUB - SECTION (4) BY THE FINANCE ACT, 2006, WHICH IS IN THE NATUR E OF A PROVISO TO THE AFORESAID PROVISION, IT IS MADE CLEAR THAT SUCH A DEDUCTION SHALL NOT BE ADMISSIBLE TO A CO - OPERATIVE BANK. HOWEVER, IF IT IS A PRIMARY AGRICULTURE CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURE AND RURAL DEVELOPMENT BANK, THE D EDUCTION WOULD STILL BE PROVIDED. 31. THUS, CO - OPERATIVE BANKS ARE NOW SPECIFICALLY EXCLUDED FROM THE AMBIT OF SECTION 80P OF THE ACT. UNDOUBTEDLY, IF ONE HAS TO GO BY THE AFORESAID DEFINITION OF CO - OPERATIVE BANK , THE APPELLANT DOES NOT GET COV ERED THEREBY. IT IS ALSO A MATTER OF COMMON KNOWLEDGE THAT IN ORDER TO DO THE BUSINESS OF A CO - OPERATIVE BANK, IT IS IMPERATIVE TO HAVE A LICENCE FROM THE RESERVE BANK OF INDIA, WHICH THE APPELLANT DOES NOT POSSESS. NOT ONLY THIS, AS NOTICED ABOVE, THE RES ERVE BANK OF INDIA HAS ITSELF CLARIFIED THAT THE BUSINESS OF THE APPELLANT DOES NOT AMOUNT TO THAT OF A CO - OPERATIVE BANK. THE APPELLANT, THEREFORE, WOULD NOT COME WITHIN THE MISCHIEF OF SUB - SECTION (4) OF SECTION 80P. 32. HOWEVER, IT IS SIGNIFICANT TO PO INT OUT THAT THE MAIN REASON FOR DISENTITLING THE APPELLANT FROM GETTING THE DEDUCTION PROVIDED UNDER SECTION 80P OF THE ACT IS NOT SUB - SECTION (4) THEREOF. WHAT HAS BEEN NOTICED BY THE ASSESSING OFFICER, AFTER DISCUSSING IN DETAIL THE ACTIVITIES OF THE AP PELLANT, IS THAT THE ACTIVITIES OF THE APPELLANT ARE IN VIOLATIONS OF THE PROVISIONS OF THE IMPUGNED ACT UNDER WHICH IT IS FORMED. IT IS POINTED OUT BY THE ASSESSING OFFICER THAT THE ASSESSEE IS CATERING TO TWO DISTINCT CATEGORIES OF PEOPLE. THE FIRST CATE GORY IS THAT OF RESIDENT MEMBERS OR ORDINARY MEMBERS. THERE MAY NOT BE ANY DIFFICULTY AS FAR AS THIS CATEGORY IS CONCERNED. 33. THE APPELLANT FURTHER RELIES ON THE DECISION BY THE HONOURABLE INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD) IN APPEAL NO. ITA NO. 2710(AHD/2015) DATE OF JUDGEMENT ORDER NO. 10.04.2017 COURTS : ALL ITAT (4377) ITAT AHMEDABAD (329) WHICH RELIED ON THE PRINCIPLES ENUNCIATED BY THE SUPREME CO URT OF INDIA IN SUPRA (I.E., TOT GARS CO - OPERATIVE SALE SOCIETY) THAT INTEREST 23 IT A NO S . 2876 & 2631 /BANG/20 17 EARNED FROM I NVESTMENTS MADE IN ANY BANK, NOT BEING A CO - OPERATIVE SOCIETY, IS NOT DEDUCTIBLE UNDER SECTION 80P(2)(D) OF THE ACT. IN THE LIGHT OF THE PRINCIPLES ENUNCIATED BY THE SUPREME COURT IN TOTGARS CO - OPERATIVE SALE SOCIETY (SUPRA), IN CASE OF A SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS, INCOME FROM INVESTMENTS MADE IN BANKS DOES NOT FALL WITHIN ANY OF THE CATEGORIES MENTIONED IN SECTION 80P(2)(A) OF THE ACT. HOWEVER, SECTION 80P(2)(D) OF THE ACT SPECIFICALLY EXEMPTS INTEREST EARNED FROM FUND S INVESTED IN CO - OPERATIVE SOCIETIES. THEREFORE, TO THE EXTENT OF THE INTEREST EARNED FROM INVESTMENTS MADE BY IT WITH ANY CO - OPERATIVE SOCIETY, A CO - OPERATIVE SOCIETY IS ENTITLED TO DEDUCTION OF THE WHOLE OF SUCH INCOME UNDER SECTION 80P(2)(D) OF THE ACT. HOWEVER, INTEREST EARNED FROM INVESTMENTS MADE IN ANY BANK, NOT BEING A CO - OPERATIVE SOCIETY, IS NOT DEDUCTIBLE UNDER SECTION 80P(2)(D) OF THE ACT. 34. ACCORDINGLY, AS PER THE OBSERVATIONS MADE BOTH BY THE AO AND CITA, THE APPELLANT CRAVE FO R PAYING A N AMOUNT OF RS. 1,40,078/ - ON 27 .12.2017 BEING THE INCOME TAX FOR HAVING INVESTED IN OTHER BANKS (OTHER THAN CO - OPERATIVE BANKS) FOR HAVING EARNED A N ET INTEREST INCOME OF RS. 4,53,328 / - OUT OF RS . 36,29,340 / - AS PER THE DETAILS GIVEN BELOW : - INVESTED IN OTHER BANK (OTHER THAN CO - OPERATIVE BANKS) : - (A) STATE BANK OF INDIA RS. 4,53,328 / - TOTAL - RS. 4,53,328 / - INVESTED IN CO - OPERATIVE BANKS : - (A) BANGALORE CI TY CO - OPERATIVE BANK RS. 27,08,690 / - (B) VYSYA CO - OP BANK LIMITED - RS. 4,67,322 / - TOTAL - - RS. 31,76,012 / - GRAND TOTAL RS. 36,29,340 / - 24 IT A NO S . 2876 & 2631 /BANG/20 17 35. . THE ORDER OF THE LEARNED AO IN AS MUCH IT IS AGAINST THE APPELLANT, IS OPPOSED TO LA W, EQUITY, PROBABILITIES, WEIGHT OF EVIDENCE, FACTS OF AND THE CIRCUMSTANCES IN ITS CASE. 36. THE LEARNED AO IS NOT JUSTIFIED IN ASSESSING THE INCOME OF THE APPELLANT AT RS. 89,13,199 / - AS AGAINST THE NIL I NCOME RETURNED FOR THE A.Y. 2013 - 14 , UNDER THE F ACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT S CASE. 37. THE LEARNED AO IS NOT JUSTIFIED IN DISALLOWING THE APPELLANT S LEGITIMATE CLAIM FOR DEDUCTION OF RS. 89,13,199 / - U/S.80P(2)(A)(I) OF THE INCOME TAX ACT 1961, FOR THE A.Y. 2013 - 14 , UNDER THE FA CTS AND IN THE CIRCUMSTANCES OF THE APPELLANT S CASE. 38. WITHOUT PREJUDICE, THE LEARNED AO IS NOT JUSTIFIED IN DISALLOWING THE APPELLANTS LEGITIMATE CLA IM FOR DEDUCTION OF RS.36,29,340 / - U/S. 80P(2)(D) OF THE INCOME TAX ACT 1961 UNDER THE FACTS AND IN TH E CIRCUMSTANCES OF THE APPELLANT S CASE. 39. IT IS STATED THAT, WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER AS PER THE PARITY OF REASONING OF THE DECISION OF THE HON BLE APEX COURT IN THE CASE OF KARANVIR SINGH 349 ITR 692, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED WITH THE INTEREST U/S. 234 B OF THE INCOME - TAX ACT 1961 UNDER THE FACTS AND CIRCUMSTANCES OF IT S CASE. 40. THE APPELLANT CONTENDS THAT THE LEVY OF INTEREST UNDER THE PROVISIONS OF SECTIONS 234 B OF THE ACT IS ALSO BAD IN LAW AS THE PERIOD, RATE, QUANTUM AND METHOD OF CALCULATION ADOPTED BY THE LEARNED INCOME TAX OFFICER, BASED ON WHICH THE INTEREST IS LEVIED IS NOT DISCERNIBLE AND IS WRONG ON THE FACTS AND THE CIRCUMSTANCES IN THE APPELLANT S CASE. 41. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE, SUBSTITUTE AND REPLACE ALL OR ANY OF THE GROUNDS URGED HEREIN DURING THE HEARING OF THE APPEALS. 42. FOR THE ABOVE GROUNDS URGED AND FURTHER GROUNDS TO BE URGED DURING THE HEARING OF THE APPEALS, THE APPELLANT PRAYS THAT THE ASSESSMEN T ORDER PASSED BY THE LEARNED AO BE ANNULLED AND THE APPELLANT S APPEALS BE ALLOWED IN FULL IN THE INTEREST OF EQUITY AND JUSTICE. 43. AFTER HEARING THE APPELLANT, THE RESPONDENT WAS PLEASED TO DISMISS THE SAID APPEAL IN ITA NO.88/W - 5(2)(3)/CIT(A) - 5/201 6 - 2017 DATED BY ITS ORDER DATED 29.09.2017 AND THE APPELLANT HAS RECEIVED THE SAID ORDER ON 24 - 10 - 25 IT A NO S . 2876 & 2631 /BANG/20 17 2017. THE PRESENT APPEAL IS WITHIN STATUTORY LIMITS FROM THE DATE OF RECEIPT OF THE ORDER COPY. 44. THE ADDRESS FOR THE PURPOSE OF SERVICE OF NOTICE BY THIS HON BLE TRIBUNAL IS AS STATED IN THE CAUSE TITLE TO THIS APPEAL. 45. THEREFORE, IN VIEW OF THE ABOVE STATEMENTS AND THE GROUNDS URGED THE APPELLANT PRAYS THAT THE APPEALS BE ALLOWED IN FULL IN THE INTEREST OF EQUITY AND JUSTICE. THOUGH VARIOUS GROUND S ARE RAISED (SUPRA), BUT THEY ALL RELATE TO THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80P(2) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 4.1 THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE WAS HEARD IN SUPPORT OF THE GROUNDS RAIS ED AND FILED WRITTEN SUBMISSIONS FILED ON 27.8.2018 FOR BOTH ASSESSMENT YEARS 2013 - 14 AND 2014 - 15 WHICH ARE ALSO EXTRACTED HEREUNDER : - 1. THE APPELLANT S SOCIETY IS REGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 AS A CO - OPERATIVE . A COPY OF THE REGISTRATION CERTIFICATE NO. 33/1687/2009 - 2010 DATED 03.02.2010 ISSUED BY THE GOVERNMENT OF KARNATAKA IS ATTACHED AS ANNEXURE A HEREIN. 2. THE ASSESSEE AS A CO - OPERATIVE ENJOYING THE DEEMING STATUS OF A CO - OPERATIVE SOCIETY UNDER THE PROVISIONS O F SECTION 2 (E) OF THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997. 3. THE SECTION 2(E) DEFINES THE TERM CO - OPERATIVE AS UNDER : - CO - OPERATIVE MEANS A CO - OPERATIVE INCLUDING A CO - OPERATIVE BANK DOING THE BUSINESS OF BANKING REGISTERED OR DEEMED TO BE REGIST ERED UNDER SECTION 5 AND WHICH HAS THE WORDS SOUHARDA SAHAKARI IN ITS NAME AND FOR THE PURPOSES OF THE BANKING REGULATION ACT, 1949 (CENTRAL ACT 2 OF 1934), THE DEPOSIT INSURANCE AND CREDIT GUARANTEE CORPORATION ACT, 1961 (CENTRAL ACT 47 OF 1961) AND TH E NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT ACT, 1981 (CENTRAL ACT 67 OF 1981), IT SHALL BE DEEMED TO BE A CO - OPERATIVE SOCIETY . 26 IT A NO S . 2876 & 2631 /BANG/20 17 THEREFORE THE TERM CO - OPERATIVE MEANS A DEEMED CO - OPERATIVE SOCIETY . ACCORDINGLY, SECTION 2(E) AMENDED THE TE RM CO - OPERATIVE OF THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 BY ACT 16 OF 2005 WEF 01.06.2005 WHICH IS REPRODUCED BELOW : - AMENDING ACT 16 OF 2005 IS AS GIVEN BELOW : - THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 (KARNATAKA ACT 17 OF 2000) RECEIVED THE A SSENT OF THE PRESIDENT OF INDIA ON 28.03.2000 WITH CERTAIN OBSERVATIONS TO MODIFY AND INCLUDE SPECIFIC SUGGESTIONS OF RESERVE BANK OF INDIA WITH REGARD TO BANKING BUSINESS. THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 WAS AMENDED AS PER KARNATAKA ACT NO.21OF 2004 COVERING THE SPECIFIC SUGGESTION OF THE RESERVE BANK OF INDIA. NOW, THE RESERVE BANK OF INDIA HAS GIVEN SOME MORE SUGGESTIONS TO AMEND THE ACT. THEREFORE, IT IS PROPOSED TO AMEND THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 (KARNATAKA ACT 17 OF 2000), N AMELY: - 1. TO AMEND CLAUSE (E) OF SECTION 2 TO STATE THAT A **CO - OPERATIVE REGISTERED UNDER THE SAID ACT SHALL BE DEEMED TO BE A CO - OPERATIVE SOCIETY FOR THE PURPOSE OF BANKING REGULATION ACT, 1949 AND RELATED LAWS. 2. TO AMEND CLAUSE (EE) OF SECTION 2 TO PROVIDE THAT THE PRIMARY OBJECT OF A CO - OPERATIVE BANK SHALL BE THE BUSINESS OF BANKING. 3. TO DELETE CLAUSE (IX) OF SUB - SECTION (2) OF SECTION 10, IN VIEW OF PROVISION OF SECTION 26(1) WHICH PROVIDES THAT THE ELECTIONS SHOULD BE HELD IN THE PRESCRIBED MAN NER AND SECTION 28 WHICH PROVIDES FOR ELECTION OF OFFICE 2000:KAR.ACT 17 SOUHARDA BEARERS AND SECTION 29 WHICH PROVIDES FOR FILLING UP OF CASUAL VACANCIES. 4. TO AMEND SECTION 25 TO PROVIDE FOR THE FEDERAL CO - OPERATIVE TO DECIDE THE DISQUALIFICATION OF THE DIRECTOR OF A CO - OPERATIVE AND THE REGISTRAR TO DECIDE THE APPEAL AGAINST THE ORDER OF THE FEDERAL CO - OPERATIVE. 5. TO AMEND SECTION 53 BY DELETING CLAUSE (E) OF SUB - SECTION (7) IN VIEW OF THE AMENDMENT PROPOSED TO SECTION 25. 6. TO AMEND SUB - SECTION (1) OF SECTION 67A TO PROVIDE THAT THE REGISTRAR SHALL PASS AN ORDER OF SUPERSESSION OF A BOARD OR LIQUIDATION OF A CO - OPERATIVE BANK WHEN SO REQUIRED BY THE RESERVE BANK OF INDIA IN WRITING. HENCE THE BILL. [LC BILL NO. 6 OF 2005] 4. THE APPELLANT FURTHER RELI ES ON THE STATEMENT OF OBJECTS AND REASONS GIVEN FOR GIVEN FOR ENACTING THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 VIDE KARNATAKA ACT NO. 17 OF 2000 (PROMULGATED IN KARNATAKA GAZETTE, EXTRAORDINARY, DATED 29.08.1997 ARE AS GIVEN BELOW : - THE KARNATAKA SOUH ARDHA SAHAKARI BILL, 1997 AMONG OTHER THINGS PROVIDE FOR : - (1)XXXXXXXXXXXXXX (2)XXXXXXXXXXXXXX (3)XXXXXXXXXXXXXX 27 IT A NO S . 2876 & 2631 /BANG/20 17 (4)XXXXXXXXXXXXXX (5) CONVERSION OF CO - OPERATIVE SOCIETIES REGISTERED UNDER THE KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959 AS A CO - OPERATIVE UNDER THE PROPOSED LEGISLATION. HENCE THE BILL 5. IT IS NOT A FAR PLACE TO EMPHASIS THE FACT THAT ONE OF THE PURPOSES OF THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 IS TO CONVERT THE EXISTING CO - OPERATIVE SOCIETIES INTO CO - OPERATIVES. THEREFORE, IT IS NECESS ARY TO UNDERSTAND WHICH ARE THE CO - OPERATIVES WHICH MAY BE REGISTERED IN TERMS OF SECTION 4 OF THE IMPUGNED ACT, 1997 WHICH IS RE - PRODUCED HEREIN : - 4. CO - OPERATIVES WHICH MAY BE REGISTERED (1) NO CO - OPERATIVE SHALL BE REGISTERED UNDER THIS ACT, UNLESS (A) ITS MAIN OBJECTS ARE TO SERVE THE INTEREST OF THE MEMBERS IN THE AREA OF OPERATION. (B) ITS BYE - LAWS PROVIDES FOR ECONOMIC AND SOCIAL BETTERMENT OF THE MEMBERS THROUGH SELF - HELP AND MUTUAL AIR IN ACCORDANCE WITH THE CO - OPERATIVE PRINCIPLES. (2) SUBJECT TO THE PROVISIONS OF THIS ACT WHERE : - (A) NOT LESS THAN TEN INDIVIDUALS BELONGING TO DIFFERENT FAMILIES INTEND TO FORM A CO - OPERATIVE; OR (B) A CO - OPERATIVE SOCIETY INTENDS TO CONVERT ITSELF INTO A CO - OPERATIVE UNDER THIS ACT BY PASSING A RESOLUTION IN THIS BEHALF; OR XXXXXXXXXXXXXXXXXXXXX 6. THEREFORE, THE APPELLANT IS A CO - OPERATIVE SOCIETY AND THE CONTENTION OF THE RESPONDENT STATING THAT THE APPELLANT IS NOT A CO - OPERATIVE SOCIETY IS PERVERSE, ARBITRARY AND MISLEADING. THE RESPONDENT REVENUE IS CIRCUMVENTING THE FACTS AND THE LAW. THE RESPONDENT HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE TO PROVE THAT THE APPELLANT IS NOT A CO - OPERATIVE SOCIETY. 7. THE APPELLANT IS REGISTERED UNDER THE PROVISIONS OF SECTION 6(1) OF THE KARNATAKA SOUHARDA SAH AKARI ACT, 1997 WITH EFFECT FROM 03.02.2010 AS THIS ACT HAS REPLACED THE ERSTWHILE THE KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959 AS AN ALTERNATIVE 28 IT A NO S . 2876 & 2631 /BANG/20 17 8. THE SECTION 2 (E) OF THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 STATES THAT THE APPELLANT AS A CO - OPERA TIVE IS A CO - OPERATIVE SOCIETY. THE RESPONDENT NEED TO UNDERSTAND THAT THE TERM CO - OPERATIVE PRECISELY MEANS CO - OPERATIVE SOCIETY. 9. THE RESPONDENT IS TOTALLY INCORRECT WHEN HE STATES THAT THE APPELLANT CO - OPERATIVE SOCIETY IS A CO - OPERATIVE AND NOT A CO - OPERATIVE SOCIETY . IT IS ACTUALLY ONE AND THE SAME. THIS CO - OPERATIVE SOCIETY WAS NOT REGISTERED UNDER THE PROVISIONS OF THE KARNATAKA CO - OPERATIVE SOCIETY ACT, 1959 SINCE IT IS MANDATED BY THE PROVISION OF THE LAW AS EXPLAINED ABOUT THAT ALL SUCH CO - OPERATIVE SOCIETIES INTENDING TO REGISTER HAS BEEN DIRECTED TO REGISTER UNDER THE PROVISIONS OF THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 UNDER SECTION 6 (1 OR 6(2). THE DEFINITION OF SECTION 6 IS REPRODUCED BELOW : - CERTIFICATE OF REGISTRATION ; ( 1) WHERE A CO - OPERATIVE IS REGISTERED OR DEEMED TO BE REGISTERED, THE CERTIFICATE OF REGISTRATION DULY SIGNED AND SEALED BY THE REGISTRAR SHALL BE CONCLUSIVE EVIDENCE THAT THE CO - OPERATIVE MENTIONED THEREIN, IS A CO - OPERATIVE REGISTERED OR DEEMED TO BE REG ISTERED UNDER THE ACT. (2) NOTWITHSTANDING ANYTHING CONTAINED IN THE KARNATAKA CO - OPERASTIVE SOCIETIES ACT, 1959, WHEN A CERTIFICATE OF REGISTRATION IS ISSUED TO A CO - OPERATIVE AFTER CONVERSION OF A CO - OPERATIVE SOCIETY INTO A CO - OPERATIVE, THE REGISTRATIO N OF SUCH CO - OPERATIVE SOCIETY UNDER THE KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959 SHALL BE CANCELLED BY THE REGISTRAR WITH EFFECT FROM THE DATE OF ISSUE OF CERTIFICATE OF REGISTRATION UNDER THIS ACT. 10. THE APPELLANT CO - OPERATIVE SOCIETY WAS REGISTERED BY THE COMPETENT AUTHORITY UNDER SECTION 6(1) OF THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 AS WE WERE PREVENTED/BARRED FROM REGISTERING UNDER THE PROVISIONS OF THE KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959 AS THE REGISTRATION OF SOCIETIES WERE DEACTIVATE D ON THE DATE OF REGISTRATION OF OUR CO - OPERATIVE SOCIETY (I.E., 03.02.2010) AND INSTEAD REDIRECTED FOR REGISTERING INSTEAD UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997. THE KSS ACT, 1997 WAS FIRST PUBLISHED IN THE KARNATAKA GAZETTE ON 10.05.2000. THERE WERE MANY CO - OPERATIVE SOCIETIES WHO WERE EXISTING PRIOR TO 10.05.2000 WERE DIRECTED FOR A CONVERSION OF A CO - OPERATIVE SOCIETY (UNDER THE KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959) INTO A CO - OPERATIVE (UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997). I N ALL SUCH SITUATION, THE REGISTRATION OF SUCH CO - OPERATIVE SOCIETIES UNDER THE KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959 WERE CANCELLED BY THE REGISTRAR WITH EFFECT FROM THE DATE OF ISSUE OF CERTIFICATE OF REGISTRATION UNDER THIS ACT. THEY WERE ISSUED RE GISTRATION CERTIFICATE UNDER THE PROVISION OF SECTION 6(2) OF THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997. HOWEVER, ALL THOSE CO - OPERATIVES REGISTERED EITHER UNDER THE SECTION 6(1) OR 6(2) CO - OPERATIVE SOCIETY UNDER SECTION 2(E) OF THE KARNATAKA SOUHARDA SAH AKARI ACT, 1997 ARE KNOWN COMMONLY AS CO - OPERATIVE . 29 IT A NO S . 2876 & 2631 /BANG/20 17 11. THEREFORE, IT IS A CO - OPERATIVE SOCIETY AS CONTEMPLATED UNDER SECTION 2 (19) OF THE INCOME TAX ACT, 1961 AND THEREFORE ELIGIBLE FOR ALL DEDUCTIONS U/S 80P OF THE INCOME TAX ACT, 1961. 12. THEREFOR E, THE RESPONDENT IS ERRING IN UNDERSTANDING THE BASICS OF SECTION 80P OF THE IT ACT, 1961. ENTIRE SECTION ONLY SPEAKS ABOUT THE DEDUCTION IN RESPECT OF INCOME OF CO - OPERATIVE SOCIETIES . IT IS SIMPLE. SECTION 80P(2) OF THE IT ACT, 1961 GIVES THE LIST OF ACTIVITIES THAT CAN BE CARRIED OUT BY THE SOCIETIES SUCH AS THE APPELLANT SOCIETY WHICH ARE ELIGIBLE FOR DEDUCTION U/S 80P(). THE APPELLANT SOCIETY IS FALLING UNDER SECTION 80P(2)(I) I.E., CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THERE IS NO DISPUTE ABOUT THE ACTIVITIES CARRIED ON BY THE APPELLANT SOCIETY AS FAR THE RESPONDENT IS CONCERNED. THERE IS AN UTTER CONFUSION ONLY IN READING THE PROVISION OF SECTION 80P(4) WHICH WAS INTRODUCED WITH EFFECT FROM 01.04.2007 B Y FINANCE ACT, 2006. THE PROVISION OF SECTION 80P(4) ONLY STATES THAT THIS PROVISION SHALL NOT APPLY TO ANY CO - OPERATIVE BANK BUT APPLIES ONLY FOR A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THE RESPONDENT DID NOT HAVE ANY PROBLEM TILL THIS PROVISION OF SECTION 80P(4) WAS INTRODUCED FROM 01.04.2007 IN ALLOWING THE APPELLANT TO AVAIL ALL THE FACILITIES OF DEDUCTION UNDER SECTION 80P(2(I). THE RESPONDENT SUDDENLY WOKE UP ONLY FROM THE IMPUGNED FINA NCIAL YEAR 2012 - 2013/2013 - 2014 AND CONFUSED TOTALLY ABOUT THE PROVISION OF SECTION 80P(4). THIS SUB - SECTION IS ALSO MADE UNDER THE PRINCIPAL SECTION 80P WHICH SPEAKS ONLY ABOUT DEDUCTION IN RESPECT OF INCOME OF CO - OPERATIVE SOCIETIES . HERE, COMES THE AO AND CIT(APPEALS) WHO HAVE TAKEN UPON THEMSELVES TO MAKE THE LAW BY THEMSELVES BY REDEFINING WHAT IS A (A) CO - OPERATIVE BANK (B) PRIMARY AGRICULTURAL CREDIT SOCIETY AND (C) A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THE LAW ONLY SAYS T O WHOM IT DOES NOT APPLY OR APPLIES. THE APPELLANT FAIL TO UNDERSTAND, IF THE RESPONDENT IS CROSSED ALL THE KNOWN CANNONS OF LAW BY FAILING TO UNDERSTAND THE BASICS OF A PROVISION IN AN ENACTMENT. 13. THE APPELLANT FAIL TO UNDERSTAND THE WAY THE RESPONDE NT IS TRYING TO ENACT A LAW BY GROSSLY MISUNDERSTANDING THE VERY BASICS OF THE PROVISION OF THE ENACTMENT. 14. THE APPELLANT HUMBLY PRAYS BEFORE THIS HON BLE TRIBUNAL TO ALLOW THIS APPEAL IN FAVOUR OF THE APPELLANT FOR THE SUBSTANTIAL CAUSE OF JUSTICE BY HOLDING THAT THE APPELLANT SOCIETY IS ELIGIBLE FOR DEDUCTION U/S 80P OF THE INCOME TAX ACT, 1961 FOR BOTH THE ASSESSMENT YEARS 2013 - 2014 AND 2014 - 2015 BEING A CO - OPERATIVE SOCIETY AS CONTEMPLATED UNDER THE PROVISION OF SECTION 2(E) OF THE KARNATAKA SOHARDA SAHAKARI ACT, 1997. 4.2 THE TRANSLATED VERSION OF THE ASSESSEE'S CERTIFICATE OF REGISTRATION IS EXTRACTED HEREUNDER : - 30 IT A NO S . 2876 & 2631 /BANG/20 17 31 IT A NO S . 2876 & 2631 /BANG/20 17 5.1 THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REVENUE, IN THE COURSE OF HEARING BEFORE US, RAISED SERIOUS OBJECTIONS QUESTIONING THE VERY BASIS OF THE ASSESSEE'S ENTITLEMENT FOR DEDUCTION UNDER SECTION 80P OF THE ACT ON THE GROUND THAT THE ASSESSEE IS REGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 AND UNDER THE SAID ACT, CO - OPERATIVE SOCIETIES ARE NOT BEING REGISTERED. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO INVITED THE ATTENTION OF THE BENCH TO THE CERTIFICATE OF REGISTRATION ISSUED BY THE JOINT REGISTRAR OF CO - OPERATIVE SOCIETIES SUBMITTING THAT AS PER THE CERTIFICATE ALSO , THE ASSESSEE WAS REGISTER ED AS SWABHIMAN SOUHARDA CREDIT CO - OPERATIVE LTD. AND NOT AS A CO - OPERATIVE SOCIETY. THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDS THAT IN VIEW OF THE ABOVE, THE ASSESSEE HAS WRONGLY REPRESENTED ITSELF AS A CO - OPERATIVE SOCIETY FOR CLAIMING DEDUCTION UNDER SECTION 80P OF THE ACT; SINCE THE DEDUCTION THERE UNDER IS ALLOWED ONLY TO CO - OPERATIVE SOCIETIES AND NOT TO CO - OPERATIVES REGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RAISED THE SERIOUS OB JECTION QUESTIONING THE BASIS OF ENTITLEMENT OF DEDUCTION UNDER SECTION 80P OF THE ACT ON THE GROUND THAT ASSESSEE REGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 AND UNDER 32 IT A NO S . 2876 & 2631 /BANG/20 17 THE SAID ACT, CO - OPERATIVE SOCIETIES ARE NOT BEING REGISTERED. HE HAS A LSO INVITED OUR ATTENTION TO THE REGISTRATION CERTIFICATE ISSUED BY THE REGISTRAR OF CO - OPERATIVE SOCIETIES WITH THE SUBMISSION THAT AS PER THE CERTIFICATE ALSO, ASSESSEE WAS REGISTERED AS UDAY SOUHARDA PATTINA CO - OPERATIVE LTD., AND NOT AS UDAYA SOUHARDA CREDIT CO - OPERATIVE SOCIETY LTD. THEREFORE, ASSESSEE HAS WRONGLY RE - PRESENTED HIMSELF AS A CO - OPERATIVE SOCIETY FOR CLAIMING DEDUCTION UNDER SECTION 80P OF THE ACT. THE LEARNED DR FURTHER CONTENDED THAT THE DEDUCTION UNDER SECTION 80P IS ONLY ALLOWED TO TH E CO - OPERATIVE SOCIETIES AND NOT THE CO - OPERATIVE REGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT. THE LEARNED DR FURTHER CONTENDED THAT CO - OPERATIVE AND CO - OPERATIVE SOCIETIES ARE 2 DIFFERENT ENTITIES. IF THE CO - OPERATIVE WANTS TO CONVERT ITSELF INTO A CO - OPERATIVE SOCIETY, IT HAS TO BE CONVERTED AS PER THE AMENDING ACT 13/2004 WHICH PROVIDES CONVERSION OF COOPERATIVE UNDER THE KARNATAKA SOUHARDA ACT, 1997 INTO CO - OPERATIVE SOCIETY. IN THE CO - OPERATIVE SOCIETY ACT, THE CO - OPERATIVE HAS ALSO BEEN DEFIN ED ACCORDING TO WHICH THE CO - OPERATIVE MEANS A CO - OPERATIVE REGISTERED UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 (KARNATAKA ACT 17 OF 2000) AND INCLUDES UNION CO - OPERATIVE AND THE FEDERAL CO - OPERATIVES. THE LEARNED DR 33 IT A NO S . 2876 & 2631 /BANG/20 17 FURTHER INVITED OUR ATTENTION T O THE KARNATAKA SOUHARDA SAHAKARI ACT ALSO IN WHICH THE CO - OPERATIVE WORD HAS BEEN DEFINED IN CLAUSE 2(E) ACCORDING TO WHICH CO - OPERATIVE MEANS A CO - OPERATIVE INCLUDING A CO - OPERATIVE BANK DOING THE BUSINESS OF BANKING REGISTERED OR DEEMED TO BE REGISTERED UNDER SECTION 5 AND WHICH HAS THE WORD SOUHARDA SAHAKARI IN ITS NAME. IN SOUHARDA SAHAKARI ACT, THE WORD CO - OPERATIVE SOCIETY HAS ALSO BEEN DEFINED IN CLAUSE 2(G), ACCORDING TO WHICH THE CO - OPERATIVE SOCIETY MEANS A CO - OPERATIVE SOCIETY REGISTERED UNDER T HE KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959. IF BOTH THE ACTS ARE READ JOINTLY, IT WOULD BE VERY CLEAR THAT THE CO - OPERATIVE AND CO - OPERATIVE SOCIETIES ARE TWO DIFFERENT ENTITIES AND AS PER THE CERTIFICATE FILED BY THE ASSESSEE, THE ASSESSEE IS A CO - OPER ATIVE AND NOT A CO - OPERATIVE SOCIETY. THE BENEFIT OF DEDUCTION CAN ONLY BE GIVEN TO THE CO - OPERATIVE SOCIETIES AND NOT TO THE CO - OPERATIVE. THEREFORE, THE ASSESSEE IS NOT EVEN ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80P(2) OF THE ACT. 5.2 IN RESPON SE TO THE WRITTEN SUBMISSIONS PUT FORTH BY THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE ON 27.8.2018 AND EXTRACTED AT PARA 4 OF THIS ORDER (SUPRA), THE LEARNED DEPARTMENTAL REPRESENTATIVE FILED WRITTEN SUBMISSIONS AS A REJOINDER THERETO THAT ALL I SSUES RAISED BY 34 IT A NO S . 2876 & 2631 /BANG/20 17 THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAVE BEEN ADDRESSED AND CONSIDERED IN THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. UDAYA SOUHARDA CREDIT CO - OPERATIVE SOCIETY LTD. IN ITA NO.2831/BANG/2017 DT.17.8.2018. THESE WRITTEN SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE ARE EXTRACTED HEREUNDER : - 35 IT A NO S . 2876 & 2631 /BANG/20 17 36 IT A NO S . 2876 & 2631 /BANG/20 17 37 IT A NO S . 2876 & 2631 /BANG/20 17 6.1 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE WRITTEN SUBMISS IONS AND DETAILS FILED AND THE JUDICIAL PRONOUNCEMENTS CITED. THOUGH VARIOUS 38 IT A NO S . 2876 & 2631 /BANG/20 17 GROUNDS HAVE BEEN RAISED AND ARGUMENTS PUT FORTH, THEY ALL RELATE TO THE ASSESSEE'S CLAIM OF DEDUCITON UNDER SECTION 80P(2) OF THE ACT. FROM THE MATERIAL BEFORE US, WE FIND THAT A CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF UDAYA SOUHARDA CREDIT CO - OPERATIVE SOCIETY LTD. IN ORDER IN ITA NO.2831/BANG/2017 DT.17.8.2018 HAS CONSIDERED AND ADDRESSED THE IDENTICAL ISSUE AND RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFI CER TO RE - EXAMINE ALL ASPECTS OF THE ASSESSEE'S CLAIMS FOR DEDUCTION UNDER SECTION 80P(2) OF THE ACT FOR ADJUDICATION BY WAY OF A REASONED AND SPEAKING ORDER IN THE LIGHT OF OBSERVATIONS MADE AND DIRECTIONS ISSUED AT PARAS 7 TO 13 THEREOF WHICH ARE EXTRAC TED HEREUNDER : - 7. HAVING CAREFULLY EXAMINED THE ORDERS OF AUTHROITES BELOW IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT WHILE ADJUDICATING THE ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80P(2) OF THE ACT, THE AO CONFINED HIMSELF TO THE CLAIM OF E NTITLEMENT AND HAS DENIED THE SAME HAVING OBSERVED THAT THE ASSESSEE WAS ENGAGED IN TRANSACTING IN BANKING BUSINESS AND THUS IT IS A PRIMARY CO - OPERATIVE BANK AND DOES NOT FORM THE SECOND CATEGORY OF CO - OPERATIVE CREDIT SOCIETIES. WHEN THE MATTER TRAVELLE D TO CIT(A), THE CIT(A) HAS ALSO EXAMINED THE CLAIM OF THE ASSESSEE IN THE LIGHT OF JUDGMENT OF THE APEX COURT IN THE CASE OF CITIZEN CO - OPERATIVE SOCIETY LTD., VS. ACIT (SUPRA), WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE BEING A CO - OPERATIVE SOCIETY ADVA NCES LOAN TO MEMBERS OF GENERAL PUBLIC WITHOUT ANY APPROVAL FROM THE REGISTRAR OF SOCIETIES, THE ACTIVITY OF THE CO - OPERATIVE SOCIETY IS IN VIOLATION OF CO - OPERATIVE SOCIETIES ACT AND THE CO - OPERATIVE CREDIT SOCIETY WAS NOT ENTITLED TO DEDUCTION UNDER SECT ION 80P(2)(I)(A) OF THE ACT. 8. NOW, DURING THE COURSE OF HEARING OF THE APPEALS, THE LEARNED DR HAS RAISED A FEW VALID POINTS WHICH CANNOT BE OUTRIGHTLY IGNORED. THE LEARNED DR HAS SPECIFICALLY RAISED AN ISSUE THAT ASSESSEE IS ONLY A CO - OPERATIVE REGISTE RED UNDER THE KARNATAKA STATE SOUHARDA SAHAKARI ACT. SINCE THE ASSESSEE IS NOT A CO - OPERATIVE SOCIETY, IT IS NOT ENTITLED/ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2) OF THE ACT. THOUGH THIS ARGUMENT WAS RAISED FIRST TIME BEFORE THE TRIBUNAL AT THIS STAGE, BUT WHEN IT IS A LEGAL ARGUMENT AND GOES TO THE ROOT OF THE CASE, IT CANNOT BE OUTRIGHTLY IGNORED. THEREFORE, WE HAVE TO EXAMINE THE ARGUMENT RAISED BY THE LEARNED DR IN THIS REGARD. UNDER SECTION 80P, THE DEDUCTION IS TO BE ALLOWED ONLY TO THE CO - 39 IT A NO S . 2876 & 2631 /BANG/20 17 OPERATIV E SOCIETIES AS PER SUB SECTION 1 OF THE ACT. IN THE ENTIRE SECTION 80P, THE WORD USED IS ONLY A COOPERATIVE SOCIETIES AND NO WHERE REFERENCE WAS MADE TO THE CO - OPERATIVES. 9. PRESENTLY WE ARE CONCERNED WITH THE KARNATAKA AND THE KARNATAKA STATE HAS NOT IFIED KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959 AS WELL AS THE KARNATAKA SOUHARDA SAHAKARI ACT, 1997 AND EVEN AT PRESENT BOTH THE ACTS ARE IN FORCE SIMULTANEOUSLY. UNDER THE KARNATAKA CO - OPERATIVE SOCIETIES ACT, THE CO - OPERATIVE SOCIETIES ARE REGISTERED A ND UNDER THE KARNATAKA SOUHARDA SAHAKARI ACT, ONLY CO - OPERATIVES ARE REGISTERED. THE OBJECT OF INTRODUCING THE KARNATAKA SOUHARDA SAHAKARI ACT HAS BEEN GIVEN IN ACT 17/2000, AMENDING ACT 21/2004, AMENDING ACT 16/2005, AMENDING ACT 4/2013, AMENDING ACT 34/ 2014, AMENDING ACT 24/2016 AND AMENDING ACT 8/2017. THROUGH VARIOUS AMENDMENTS, THE SCOPE OF SOUHARDA SAHAKARI ACT WAS EXPANDED BUT NO WHERE THE CO - OPERATIVE SOCIETIES ARE CONVERTED INTO THE CO - OPERATIVES. IN BOTH THE ACTS, CO - OPERATIVES AND CO - OPERATIVE S OCIETIES ARE DEFINED INDEPENDENTLY. IN THE SOUHARDA SAHAKARI ACT, THE WORD CO - OPERATIVE AND CO - OPERATIVE SOCIETIES ARE DEFINED IN CLAUSE 2(C) AND 2(G) WHICH ARE EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE: (E) CO - OPERATIVE MEANS A CO - OPERATIVE INCLU DING A CO - OPERATIVE BANK DOING THE BUSINESS OF BANKING REGISTERED OR DEEMED TO BE REGISTERED UNDER SECTION 5 AND WHICH AHS THE WORDS SOUHARDA SAHAKARI IN ITS NAME. .. (G) CO - OPERATIVE SOCIETY MEANS A CO - OPERATIVE SOCIETY REGISTERED UNDER THE K ARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959 (KARNATAKA ACT 11 OF 1959); 10. SECTION 4 OF SOUHARDA SAHAKARI ACT DEAL WITH THE FORMATION OF CO - OPERATIVES AND ITS MEMBERS AND AS PER SECTION 4(2) CLAUSE B, CO - OPERATIVE SOCIETIES CAN BE CONVERTED INTO CO - OPERAT IVE BY PASSING A RESOLUTION AND ONCE IT IS CONVERTED, THE REGISTRATION UNDER THE SOCIETIES ACT SHALL BE CANCELLED BY THE REGISTRAR W.E.F. THE DATE OF CERTIFICATE OF REGISTRATION GIVEN UNDER SOUHARDA ACT. RELEVANT PROVISIONS OF SECTION 6 OF SOUHARDA ACT IS EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE: 6. CERTIFICATE OF REGISTRATION. - (1) WHERE A CO - OPERATIVE IS REGISTERED OR DEEMED TO BE REGISTERED, THE CERTIFICATE OF REGISTRATION DULY SIGNED AND SEALED BY THE REGISTRAR SHALL BE CONCLUSIVE EVIDENCE THAT THE CO - OPERATIVE MENTIONED THEREIN, IS A CO - OPERATIVE REGISTERED OR DEEMED TO BE REGISTERED UNDER THIS ACT. (2) NOTWITHSTANDING ANYTHING CONTAINED IN THE KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959, WHEN A CERTIFICATE OF REGISTRATION IS ISSUED TO A CO - OPER ATIVE AFTER CONVERSION OF A CO - OPERATIVE SOCIETY INTO A CO - OPERATIVE, THE REGISTRATION OF SUCH CO - OPERATIVE SOCIETY UNDER THE KARNATAKA CO - OPERATIVE SOCIETIES ACT, 1959, SHALL BE CANCELLED BY THE REGISTRAR WITH EFFECT FROM THE DATE OF ISSUE OF CERTIFICATE OF REGISTRATION UNDER THIS ACT. 11. SIMILARLY, IF THE CO - OPERATIVES INTEND TO CONVERT INTO CO - OPERATIVE SOCIETIES, CONVERSION IS ALSO POSSIBLE AS PER AMENDING ACT 13/2004. IN THE CO - OPERATIVE SOCIETIES ACT, THE WORD CO - OPERATIVE SOCIETIES AND THE CO - OPE RATIVES HAS ALSO BEEN DEFINED UNDER SECTION 2(C) AND 2 (D)(2), ACCORDING TO WHICH CO - OPERATIVE SOCIETY MEANS A SOCIETY REGISTERED OR DEEMED TO BE 40 IT A NO S . 2876 & 2631 /BANG/20 17 REGISTERED UNDER THE CO - OPERATIVE SOCIETIES ACT AND THE CO - OPERATIVE MEANS CO - OPERATIVE REGISTERED UNDER THE K ARNATAKA SOUHARDA SAHAKARI ACT, 1997. THEREFORE, FROM CAREFUL READING OF BOTH THE SECTIONS, IT IS ABUNDANTLY CLEAR THAT THE CO - OPERATIVE AND THE CO - OPERATIVE SOCIETIES ARE 2 DIFFERENT ENTITIES THOUGH THEIR CONVERSION FROM ONE TO OTHER IS POSSIBLE AS PER PR OVISIONS OF THE RESPECTIVE ACT. 12. WE HAVE ALSO CAREFULLY EXAMINED THE CERTIFICATE OF REGISTRATION GRANTED TO THE ASSESSEE AND WE FIND THAT ASSESSEE WAS REGISTERED AS A CO - OPERATIVE UNDER THE NAME UDAYA SOUHARDHA PATTINA CO - OPERATIVE LIMITED AND NOT AS A CO - OPERATIVE SOCIETY. THOUGH THE REGISTRATION CERTIFICATE WAS GRANTED BY JOINT REGISTRAR, CO - OPERATIVE SOCIETIES, BENGALURU BUT IT MAKES NO DIFFERENCE AS A JOINT REGISTRAR MAY BE SAME FOR CO - OPERATIVE SOCIETIES AND CO - OPERATIVES. FOR THE SAKE OF REFERENCE , WE EXTRACT THE CERTIFICATE OF REGISTRATION GRANTED AS UNDER: GOVT OF KARNATAKA CO - OPERATIVE SOCIETY SL.NO.GRB: RGN: 69:148 2003 - 04 DATED:13.2.2004 CERTIFICATE OF REGISTRATION I, BASAVEGOWDA, JOI NT.REGISTRAR OF CO - OPERATIVE SOCIETY, BANGALORE REGION, BANGALORE REGISTER UDAYA SOUHARDHA PATTINA CO - OPERATIVE LTD.,NO.735, 5TH CROSS, 9TH MAIN, 2ND PHASE, BSK 1ST STAGE, BANGALORE - 50, UNDER SECTION - 5 OF THE KARNATAKA SOUHARDHA SAHAKARI ACT - 1997 AND CERTI FICATE OF REGISTRATION IS ISSUED ON 13.02.2004 AS PER SEC 6(2) OF THE SAID ACT. SD. JOINT.REGISTRAR OF CO - OPERATIVE SOCIETY, BANGALORE REGION, BANGA LORE. 13. WE HAVE ALSO CAREFULLY PERUSED THE CAUSE TITLE IN THE ASSESSMENT ORDER AND IN THE CAUSE TITLE OF THE ASSESSMENT ORDER, WE FIND THAT ASSESSMENT ORDER WAS PASSED IN THE NAME OF UDAYA SOUHARDA CREDIT CO - OPERATIVE SOCIETY LTD., WHEREAS NO CERTIFICA TE OF REGISTRATION WAS PLACED BEFORE US IN THE NAME OF UDAYA SOUHARDHA CREDIT CO - OPERATIVE SOCIETY LTD. THEREFORE, WE ARE UNABLE TO UNDERSTAND HOW THE ASSESSEE CAN CLAIM IT TO BE THE CO - OPERATIVE SOCIETY IN THE ABSENCE OF PROPER REGISTRATION UNDER THE KARN ATAKA CO - OPERATIVE SOCIETIES ACT. CREATION OF CO - OPERATIVE SOCIETY UNDER THE CO - OPERATIVE SOCIETIES ACT IS DOUBTFUL. THUS THE CLAIM OF DEDUCTION UNDER SECTION 80P CANNOT BE ALLOWED. AS PER THE PROVISIONS OF SECTION 80P OF THE ACT, DEDUCTION CAN ONLY BE ALL OWED TO THE CO - OPERATIVE SOCIETIES REGISTERED UNDER THE CO - OPERATIVE SOCIETIES ACT. WITHOUT A PROPER REGISTRATION UNDER CO - OPERATIVE SOCIETIES ACT, NOBODY CAN CLAIM IT TO BE CO - OPERATIVE SOCIETY AS THE ACTIVITIES OF THE CO - OPERATIVE SOCIETIES ARE TO BE CO NTROLLED UNDER THE CO - OPERATIVE SOCIETIES ACT THROUGH REGISTRAR OF THE COOPERATIVE SOCIETIES. SINCE ALL THESE NEW POINTS HAVE BEEN RAISED DURING THE COURSE OF HEARING BEFORE US AND ACCORDING TO US ALL THESE POINTS GOES TO THE ROOT OF THE CASE, WE ARE OF TH E VIEW THAT PROPER ADJUDICATION OF THE ISSUES IS REQUIRED BY THE AO. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE AO TO REEXAMINE ALL THESE ASPECTS BY MAKING NECESSARY ENQUIRY AND INVESTIGATION AND ALSO BY PASSING A REASON ED ORDER IN THIS REGARD. SINCE WE HAVE RESTORED THE MATTER TO THE AO, WE FIND NO JUSTIFICATION TO ADJUDICATE 41 IT A NO S . 2876 & 2631 /BANG/20 17 THE ISSUE RAISED ON MERIT. ACCORDINGLY, ORDER OF THE CIT(A) IS SET ASIDE AND MATTER IS RESTORED TO THE AO FOR ADJUDICATION OF THE IMPUGNED ISSUE IN TERMS INDICATED ABOVE. 6.2 RESPECTFULLY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF UDAYA SOUHARDA CREDIT CO - OPERATIVE SOCIETY LTD. IN ITA NO.2831/BANG/2017 DT.17.8.2018, WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDERS OF THE LEARNED CIT (APPEALS) FOR BOTH ASSESSMENT YEARS 2013 - 14 AND 2014 - 15 AND RESTORE THE MATTER OF THE ELIGIBILITY OF THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80P(2) OF THE ACT TO THE FILE OF THE ASSESSING OFFICER FOR RE - EXAMINATION OF ALL ASPECTS THEREOF BY CAUSING NECESSARY ENQUIRIES TO BE MADE IN THE MATTER AND TO ADJUDICATE THEREON BY WAY OF A REASONED AND SPEAKING ORDER IN TERM OF THE OBSERVATIONS AND DIRECTIONS ISSUED BY THE CO - ORDINATE BENCH IN THE CASE OF UDAYA SOUHARDA CREDIT CO - O PERATIVE SOCIETY LTD. (SUPRA). SINCE THE IMPUGNED ORDER OF THE LEARNED CIT (APPEALS) HAS BEEN SET ASIDE AND THE MATTER RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE - EXAMINATION AND ADJUDICATION, WE REFRAIN FROM ADJUDICATING THE ISSUES / GROUNDS RAI SED BY THE ASSESSEE ON MERITS. WE HOLD AND DIRECT ACCORDINGLY. 42 IT A NO S . 2876 & 2631 /BANG/20 17 7. IN THE RESULT, THE ASSESSEE'S APPEALS FOR ASSESSMENT YEARS 2013 - 14 AND 2014 - 15 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 14TH DAY OF SEPT., 201 8 . SD/ - ( LALIET KUMAR ) JUDICIAL MEMBER SD/ - ( JASON P BOAZ ) ACCOUNTANT MEMBER BANGALORE, DT. 14 .09.2018. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL BANGALORE.