Jodhpur Sahakari Bhoomi Vikas Bank Ltd., JODHPUR V. ITO, JODHPUR

ITA 78/JODH/2014

• Counselvise Citation: 7823314 RSA 2014
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 13-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: S M JAIN
• Keywords: Gift; Depreciation

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 78 /JODH/2014 (A.Y. 200 9 - 1 0 ) JODHPUR SAHAKARI BHOOMI VIKAS VS. ITO , WARD - 3(1), BANK LTD., MANDORE ROAD, JODHPUR. JODHPUR. PAN NO. AAA LJ 0001 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.M. JAIN DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 25 / 0 7 /201 4 . DATE OF PRONOUNCEMENT : 05 /0 8 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 03 /12 /2013 OF L D . CIT(A), J ODHPUR . THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE LD. CIT(A) JODHPUR HAS ERRED IN NOT GIVING DEDUCTION U/S 80P(2)(A)(I) OF THE I.T. ACT, 1961 TO THE ABOVE ASSESSEE. THE ASSESSEE HAS CLAIMED THE DEDUCTION RIGHTLY. THE DEDUCTION WAS FULLY COVERED BY THE EXCEPTION PROVIDED BY SECTION 80P(4) OF THE ACT THE PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENTS BANK 2 2. THE LEARNED ITO AS WELL AS CIT(A) JODHPUR HAS ERRED IN COMPUTING & CONFIRMING THE TOTAL INCOME AMOUNTING TO RS. 60,85,941/ - U/S 80P(4) WI THOUT CONSIDERING THE DEDUCTION OF DEPRECIATION RS. 2,46,136/ - & DEDUCTION U/S 80P(2)(D) ON DIVIDEND INCOME AMOUNTING TO RS. 5,000/ - & RS. 6,34,700/ - FROM KRISCO & APEX BANK. THE ASSESSEE WHILE FILING RETURN ALONG WITH COMPUTATION OF TOTAL INCOME HAS FULL Y CLAIMED DEDUCTION U/S 80P(2)(A)(I) AMOUNTING TO RS. 60,85,941/ - & THESE 3 ITEMS WERE NOT SHOWN SEPARATELY. THESE 3 ITEMS WERE ALLOWABLE WHILE CALCULATING TO TOTAL INCOME. KINDLY SEE P & L ACCOUNT FOR THIS PURPOSE. 3. THE ASSESSEES CASE IS COV ERED U/S 80P(2)(A)(I) AS PER DECI S ION IN CASE OF DCIT VS. JAYALAKSHMI MAHILA VIVIDODESHAGALA SOUHARDA SAHAKARI LTD. ITAT PANAJI BENCH REPORTED IN (2012) 137 ITD 163. 4. THE LD. CIT(A) JODHPUR HAS ERRED IN NOT ALLOWING DEDUCTION U/S 80P(2)(C)(II) OF THE I.T. ACT, 19 61 AMOUNTING TO RS. 50,000/ - 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE THE GROUNDS ON OR BEFORE THE DATE OF HEARING. 2 THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE REDUCTION U/S 80P(2)(A)(I) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) . 3. FACTS RELATING TO THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 60,85,940/ - ON 30/09/2009. THE DEDUCTION OF THE ENTIRE INCOME WAS CLAIMED U/S 80P(2)(A)( I) OF THE ACT. LATER ON, THE C ASE WAS SELECTED FOR SCRUTINY . DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSEE SUBMITTED THAT THE MAIN OBJECT OF THE SOCIETY HAD BEEN ADVANCING LOAN AND CARRYING ON BUSINESS OF PROVIDING CREDIT FACILI TI ES TO ITS MEMBERS AND THE SOCIETY HAD 3 NOT BEEN DOING ANY OTHER BANKING BUSINESS , T HE MAIN SOURCE OF INCOME HAD BEEN FROM THE INTEREST RECEIVED FROM ITS MEMBERS ON ACCOUNT OF LOAN/ADVANCES GIVEN TO THEM FOR AGRICULTURE PURPOSE . IT WAS ALSO STATED THAT THE ASSESSEE WAS BASICALLY A COOPERATIVE BANK ENGAGED IN BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS FOR LAND DEVELOPMENT ONLY. HOWEVER, T HE ASSESSING OFFICER WAS OF THE VIEW THAT FOR CLAIMING DEDUCTION U/S 80P(2)(A)(I) OF THE ACT , FOLLOWINGS POIN T S ARE TO BE CONSIDERED: - 1. THAT PART - BUSINESS OF FORM 3CD OF AUDIT REPORT STATES THAT THE NATURE OF BUSINESS OF THE SOC I ETY IS BANKING BUSINESS (FORMS PART OF THIS ORDER AS ANNEXURE A) 2. THE AUDITOR IN HIS REPORT BEING OBSERVATION AS ON 31/03/2009 ALSO CONFIRMS THAT ASSESSEE IS COOPERATIVE SOCIETY & CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS (FORMS PART OF THIS ORDER AS ANNEXURE B) 3. AS PER PAR T V OF BANKING REGULATION ACT, 1949 ------ PRIMARY AGRICULTURAL CREDIT SOCIETY MEANS A COOPERATIVE SOCIETY, --- (1) THE PRIMARY OBJECT OR PRINCIPAL BUSINESS OF WHICH IS TO PROVIDE FINANCIAL ACCOMMODATION TO ITS MEMBERS FOR AGRICULTURAL PURPOSES OR FOR PUR POSES CONNECTED WITH AGRICULTURAL ACTIVIT I ES (INCLUDING THE MARKET OF CROPS); AND (2) THE BYE - LAWS OF WHICH DO NOT PERMIT ADMISSION OF ANY OTHER COOPERATIVE SOCIETY AS MEMBER 4. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE SOCIETY HAD ADVANCED LOANS TO ITS MEMBERS FOR NON - AGRICULTURE PURPOSE SUCH AS DAIRY , DRAINAGE, FENCING ETC AND LOAN AMOUNTING TO RS. 213.77 LAC HAD BEE N ADVANCED FOR THAT PURPOSE. BESIDES THAT LOANS WERE GIVEN FOR RURAL 4 HOUSING PURPOSES AMOUNTING TO RS. 1 01 . 38 LAC AND RS. 40.09 LAC FOR NON - AGRICULTURAL PURPOSES . THEREFORE, THE ASSESSEE WAS NOT ADVANCING LOANS FOR AGRICULTURAL PURPOSES ONLY , SO, IT DID NOT FALL UNDER THE DEFINITION OF PRIMARY AGRICULTURAL CREDIT SOCIETY , BUT IT WAS A COOPERATIVE BANK . THE ASSESSING OFFICER ALSO POINTED OUT THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE IN RESPECT OF ASSESSMENT PROCEEDINGS FOR THE A.Y. 2004 - 05 & 2005 - 06 , CONFIRMED THAT THE ASSESSEE SOCIETY WAS A BANK ENGAGED IN BANKING ACTIVITIES AND THERE WAS A D IFFERENCE OF OPINION ON THE POINT THAT WHETHER THE ASSESSEE WAS A COOPERATIVE BANK OR P RIMARY A GRICULTURAL C REDIT S OCIETY OR PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK . THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE COULD BE TERMED AS A COOPERATIVE BANK BECAUSE OF THE FOLLOWING FACTS : - (I) THE BANK IS ADVANCING LOAN FOR NON - AGRICULTURAL PURPOSES ALSO I.E. FOR HOUSING NON - FARMING AND MISCELLANEOUS LIKE DAIRY, DRAINA GE, FENCING ETC. (II) BESIDES THIS, LOANS ARE ALSO ADVANCED TO STAFF/EMPLOYEES OF THE BANK WHO ARE NON MEMBERS OF THE SOCIETY. (III) THE AREA OF OPERATION OF THE ASSESSEE IS NOT CONFINED TO A TALUK (TEHSIL) BUT EXTENDED TO A NUMBER OF TALUKS (TEHSILS), (IV) THE BANK IS ALSO ACCEPTING DEPOSITS FROM NON - MEMBERS (ANNEXUREG FORMS PART OF THIS ORDER), (V) THE BYE - LAWS OF THIS COOPERATIVE BANK PERMIT COOPERATIVE AGRICULTURAL FARMINGS AND AGRICULTURAL CREDIT PROVIDING COOPERATIVE SOCIETIES AS WELL AS KRI SHI UPAJ MANDI SAMITIES OF ITS AREA OF OPERATION TO BECOM E ITS MEMBER. 5 5. THE ASSESSING OFFICER HELD THAT THE ASSESSEE SOCIETY WAS A COOPERATIVE BANK CARRYING ON BANKING BUSINESS AND WAS NOT ENTITLED FOR DEDUCTION U/S 80P AS PROVIDED IN SECTION 80P(4) OF THE ACT. ACCORDINGLY, THE DEDUCTION OF RS. 60,85,941/ - CLAIMED BY THE ASSESSEE WAS DISALLOWED. 6 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND REITERATED THE SUBMISSIONS MADE BE F ORE THE ASSESSING OFFICER . IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WAS ENGAGED IN THE BANKING BUSINESS GIVING LOANS AND PROVIDING CREDIT FACILITIES TO ITS MEMBERS ENGAGED IN AGRICULTURE FOR CARRYIN G - OUT AGRICULTURAL ACTIVITIES AND MAJORITY OF THE LOANS WERE GIVEN AGAINST THE L AND ONLY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE WAS A LAND DEVELOPMENT BANK AND ITS ENTIRE BANKING FUNDS WERE REGULATED AND CONTROLLED BY ITS APEX B ANK AND THE INCOME OF THE ASSESSEE WAS EXEMPTED U/S 80P(2)(A)(I ) OF THE ACT WHICH WAS FULLY COVERED BY THE EXCEPTIONS PROVIDED BY SECTION 80P(4) OF THE ACT . REL I A NCE WAS PLACED ON THE DECISION OF THE ITAT COCHIN BENCH IN THE CASE OF KERALA STATE COOPERATIVE AGRICULTURAL RURAL DEVELOPMENT BANK LTD. VS. ACIT REPO R TED IN 139 TTJ 585. LD. CIT(A) DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE BY OBSERVING AS UNDER: - 6.3 I HAVE CONSIDERED THE ORDER OF THE ASSESSING OFFICER AND SUBMISSION OF THE APPELLANT AND I FIND THAT THE APPELLANT CLAIMED ITS INCOME OF RS. 60,85,941/ - FULLY EXEMPTED U/S 80P(2)(A)(I). THE ASSESSING 6 OFFICER DENIED THE CLAIM OF THE APPELLANT HOLDING THAT T HE ASSESSEE SOCIETY IS A CO - OPERATIVE BANK CARRYING ON BANKING BUSINESS AND IS NOT ENTITLED FOR DEDUCTION U/S 80P AS PROVIDED IN SEC. 80P(4). DURING THE COURSE OF THE APPELLATE PROCEEDING, THE APPELLANT MAINLY REPEATED ITS SAME ARGUMENT THAT ITS WHOLE INCO ME IS EXEMPTED U/S 80P(2)(A)(I) AS IT IS PRIMARY AGRICULTURAL CREDIT SOCIETY OR PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK AND NOT A CO - OPERATIVE BANK DOING BANKING BUSINESS. I FIND THAT DESPITE REPEATING THE SAME ARGUMENT, THE APPELLAN T FAILED TO CONTROVERT THE ABOVE DETAILED FINDINGS OF THE ASSESSING OFFICER WITH DOCUMENTARY EVIDENCE TO ESTABLISH THAT THE FINDINGS OF THE ASSESSING OFFICER ARE MISPLACED AND INCORRECT. THE ASSESSING OFFICER HAS CLEARLY POINTED OUT IN THE ASSESSMENT ORDER THAT THE ASSESSEE SOCIETY HAS ALSO ADVANCED LOANS TO ITS MEMBERS FOR NON - AGRICULTURAL PURPOSES SUCH AS FOR MISCELLANEOUS PURPOSE (DAIRY, DRAINAGE, FENCING) AMOUNTING TO RS. 213.77 LACS, FOR NON - AGRICULTURAL PURPOSES RS. 40.09 LACS, FOR RURAL HOUSING PURPO SES RS. 101.38 LACS. ALL THESE FACTS CONFIRMED THAT THE ASSESSEE SOCIETY IS NOT ADVANCING LOANS FOR AGRICULTURAL PURPOSE ONLY AND THUS, IT DOES NOT FALL UNDER THE DEFINITION OF PRIMARY AGRICULTURAL CREDIT SOCIETY BUT IT IS A CO - OPERATIVE BANK DOING BANKI NG BUSINESS. THE APPELLANT BANK HAS ALSO BEEN ADVANCING LOAN TO ITS STAFF/ EMPLOYEES WHO ARE ALSO NOT MEMBERS OF THE SOCIETY. IT IS ALSO POINTED OUT THE AREA OF OPERATION OF THE ASSESSEE IS NOT CONFINED TO A TALUK (TEHSIL) BUT EXTENDED TO A NUMBER OF TAL ULKS (TEHSIL). ALL THE OBSERVATIONS OF THE ASSESSING OFFICER REMAINED UNCONTROVERTED BY THE APPELLANT SOCIETY DURING THE APPELLATE PROCEEDING. 6.3.1. FURTHER IT IS TO BE NOTED THAT THE ASSESSEE HAD FAILED TO CLARIFY WHETHER ANY OTHER COOPERATIVE BANK HAD BEEN ADMITTED AS MEMBER OR NOT PARTICULARLY RAJASTHAN RAJYA SAHAKARI BHOOMI VIKAS BANK, JAIPUR. FROM THE COPIES OF BYE - LAWS OF THE APPELLANT SO CIETY, ANNEXED WITH THE ASSESSMENT ORDER AS ANNEXURE E, IT IS SEEN THAT THE APPELLANT SOCIETYS OBJECTIVES INCLUDE PROVIDING LOAN TO ITS MEMBERS FOR IMMOVABLE PROPERTY, RESIDENTIAL PROPERTY, RESIDENTIAL PLOT AND FOR LIQUID ASSETS LIKE NSC, KVC, ETC. THUS, IT IS CLEAR THAT THE APPELLANTS OBJECTS ARE NOT RESTRICTED TO PROVIDE FINANCIAL ACCOMMODATION TO ITS MEMBERS FOR AGRICULTURAL PURPOSES ONLY. THE ACTIVITIES WHICH ARE BEING CARRIED OUT BY THE APPELLANT DO NOT MAKE IT ELIGIBLE FOR DEDUCTION U/S 80P. I AM O F THE CONSIDERED VIEW THAT THE APPELLANT HAS FAILED TO JUSTIFY ITS CLAIM U/S 7 80P(2)(A)(I) IN VIEW OF RESTRICTION IMPOSED U/S 80P(4). 7 . LD. CIT(A) ALSO POINTED OUT THAT HIS PREDECESSOR FOR A.Y. 2007 - 0 8 VIDE ORDER DATED 11/03/2010 HAD GIVEN CONCLUSIVE FIN DING THAT THE ASSESSING OFFICER HAD JUSTIFIABLY DENIED THE ASSESSEES CLAIM OF DEDUCTION U/S 80P(2)(A)(I) OF THE ACT FOR THE REASON THAT THE CONDITIONS PRESCRIBED IN SECTION 80P(4) OF THE ACT ARE NOT FULFILLED . NOW THE ASSESSEE IS IN APPEAL. 8 . LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE DECISION OF THE ITAT PANAJI BENCH IN THE CASE OF DCIT VS. JAYALAKSHMI MAHILA V IVODODESHAGALA SOUHARDA SAHAKARI LTD. REPORTED AT (2012) 137 ITD 163 . 9 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 10 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IT IS NOTICED THAT THE ITAT PANAJI BENCH IN THE AFORESAID REFERRED TO CASE OF DCIT VS. JAYALAKSHMI MAHILA VIVODODESHAGALA SOUHARDA SAHAKARI LTD. HA S FOLLOWED THE DECISION OF THE ITAT BANGALORE BENCH IN THE CASE OF ACIT, CIRCLE - 3(1), 8 BANGALORE VS. M/S. BANGALORE COMMERCIAL TRANSPORT CREDIT COOPERATIVE SOCIETY LTD. IN I.T.A.NO 1069/BANG/2010 FOR A.Y. 2007 - 08 ORDER DATED 08/04/2011 WH E REIN IT HAS BEEN HELD AS UNDER: - 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE WAS DENIED THE DEDUCTION U NDER SECTION 80P (2)( A)(I) OF THE ACT FOR THE REASON OF INTRODUCTION OF SUB - SECTION (4) TO SECTION 80P. SECTION 80P(4) READS AS UNDER: - 'AFTER CONSIDERING THE APPELLANT'S ARGUMENTS ON THIS ISSUE, IT IS HELD AS UNDER: - HONBLE TRIBUNAL IN THE CASE OF ASSTT. CIT, CIRCLE - 3(1), BANGALORE V. M/S BANGALORE COMMERCIAL TRANSPORT CREDIT CO - OPERATIVE SOCIETY LTD. IN ITA NO. 1069/BANG/2010 FOR A.Y. 2007 - 08 DT. 8 - 4 - 2011 HAS HELD AS UNDER: '9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE WAS DENIED THE DEDUCTION UNDER SECTION 80P (2)(A)(I) OF THE ACT FOR THE REASON OF INTRODUCTION OF SUB - SECTION (4) TO SECTION 80P. SECTION 80P(4) READS AS UNDER: - THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN RELATION TO ANY CO OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPME NT BANK.' EXPLANATION - FOR THE PURPOSE OF THIS SUB - SECTION - 'CO - OPERATIVE BANK' AND 'PRIMARY AGRICULTURAL SOCIETY' SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949): 'PRIMARY CO - OPERATIVE AGRIC ULTURAL 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 SEC TION 80P PROVIDES THAT DEDUCTION UNDER THE SAID SECTION SHALL NOT BE AVAILABLE TO ANY CO - OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR RURAL DEVELOPMENT BANK. FOR THE PURPOSE OF THE SAID SUB - SECTION. CO - OPERATIVE BANK SHALL HAVE THE ME ANING ASSIGNED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949. IN PART V OF THE BANKING REGULATION ACT, 'CO - OPERATIVE BANK' MEANS A STATE CO - OPERATIVE BANK, A CENTRAL CO - OPERATIVE BANK AND A PRI V ATE CO OPERATIVE BANK. 9 9.2. FROM THE ABOVE SECTION, IT I S CLEAR THAT THE PROVISIONS OF SECTION 80P(4) HAS GOT ITS APPLICATION ONLY TO CO - OPERATIVE BANKS. SECTION 80P(4) DOES NOT DEFINE THE WORD 'CO - OPERATIVE SOCIETY'. THE EXISTING SUB - SECTION 80P (2)(A)(I) SHALL BE APPLICABLE TO A CO - OPERATIVE 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 - 5 - 2007. THE DIFFERENCE BETWEEN A CO - OPERATIVE BANK AND A CO - OPERATIVE SOCIETY ARE AS FOLLOWS: - NATURE COOPERATIVE SOCIETY REGISTERED UNDER BANKING REGULATION ACT 1949. COOPERATIVE SOCIETY REGISTERED UNDER KARNATAKA COOPERATIVE SOCIETIES ACT 1959 REGISTRATION UNDER THE BANKING REGULATION ACT, 1949 AND COOPERATIVE SOCIETIES ACT 1959 COOPERATIVE SOCIETIES AC T, 1959 NATURE OF BUSINESS 1. AS DEFINED IN SECTION 6 OF BANKING REGULATION ACT. 2. CAN OPEN SAVINGS BANK ACCOUNT, CURRENT ACCOUNT, OVERDRAFT ACCOUNT, CASH CREDIT ACCOUNT, ISSUE LETTER OF CREDIT, DISCOUNTING BILLS OF EXCHANGE, ISSUE CHEQUES, DEMAND DRAFTS (DD), PAY ORDER, GIFT CHEQUES, LOCKERS, BANK GUARANTEES ETC. 3. CO - OPERATIVE BANKS CA N 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 CO OPERATIVE 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 CO - OPERATIVE SOCIETIES ACT. FILING OF RETURNS CO - OPERATIVE BANKS HAVE TO SUBMIT ANNUAL RETURN TO RBI EVERY YEAR. SOCIETY HAS TO SUBMIT THE ANNUAL RETURN TO REGISTRAR OF SOCIETIES. INSPECTION 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 10 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 SOCIETY . 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 9.3 IF THE INTENTION OF THE LEGISLATURE WAS NOT TO GRANT DEDUCTION UNDER SECTION 80P(2)(A)(I) TO CO - OPERATIVE SOCIETIES CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS, THEN THIS SECTION WOULD HAVE BEEN DELETED. THE NEW PROVISO TO SECTION 80P(4 ) WHICH IS BROUGHT INTO STATUTE IS APPLICABLE ONLY TO CO - OPERATIVE BANKS AND NOT TO CREDIT CO OPERATIVE SOCIETIES. THE INTENTION OF THE LEGISLATURE OF BRINING IN CO OPERATIVE BANKS INTO THE TAXATION STRUCTURE WAS MAINLY TO BRING IN PAR WITH COMMERCIAL BANK S. SINCE THE ASSESSEE IS A CO - OPERATIVE SOCIETY AND NOT A COOPERATIVE BANK, THE PROVISIONS OF SECTION 80P(4) WILL NOT HAVE APPLICATION IN THE ASSESSEE'S CASE AND THEREFORE, IT IS ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. HENCE, WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) IS CORRECT AND IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR.' 11. HOWEVER, I N THE PRESENT CASE , IT IS NOT CLEAR AS TO WHETHER THE ASSESSEE IS A PRIMARY AGRICULTURAL CREDIT SOCIETY DOING BUSINESS OF PROVIDING FINANCIAL ACCOMMODATION TO ITS MEMBERS ONLY FOR AGRICULTURAL PURPOSES OR IT IS A COOPERATIVE BANK DOING BANKING BUSINESS. IN THE PRESENT CASE , THE ASSESSING OFFICER QUOTED THE SUBMISSIONS OF THE LEARNED AUTHORI Z ED REPRESENT ATIVE OF THE ASSESSEE THAT SOMEWHERE HE STATED THAT THE ASSESSEE SOC I ETY WAS A BANK CARRYING ON BANKING BUSINESS AND SOMEWHERE HE ST A TED THAT THE ASSESSEE SOCIETY WAS A PRIMARY AGRICULTURAL CREDIT SOCIETY , BUT THE ASSESSING OFFICER HAD NOT GIVEN A CONCR ETE FINDING ON THE BASIS OF THE EVIDENCE AVAILABLE ON THE RECORD THAT 11 THE ASSESSEE SOCIETY WAS A COOPERATIVE BANK CARRYING ON BANKING BUSINESS. IT ALSO APPEARS THAT THE DECISION OF THE ITAT PANAJI BENCH REPORTED IN DCIT VS. JAYALAKSHMI MAHILA VIVODODESHAGALA SOUHARDA SAHAKARI LTD. (SUPRA) WAS NOT BROUGHT TO THE NOTICE OF NEITHER THE ASSESSING OFFICER N OR THE LD. CIT(A) . IN THE PRESENT CASE , IT IS ALSO NOT CLEAR WHAT HAPPENED TO THE ORDER OF THE LD. CIT(A) FOR THE A.Y. 2007 - 08 WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A) WHILE DECIDING THE ISSUE FOR THE YEAR UNDER CONSIDERATION. WE THEREFORE, IN THE ABSENCE OF CLEAR FACTS AVAILABLE ON THE RECORD, DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO BE ADJUDICATED AFRES H IN ACCORDA NCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ( ORDER PRONOUNCED IN THE COURT ON 05 TH AUGUST , 201 4) . SD/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05 TH AUGUST , 201 4 . VR/ - 12 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .