ITO, Ward 1(3), Jalna V. The Chairman, MSEB Employees Co Op Credit Society Ltd., Jalna

ITA 793/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80021 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: S K TYAGI
• Keywords: Bad and doubtful debts
• Section: 56; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.793/PN/2013 (A.Y: 2008-09) ITO, WARD 1(3), JALNA APPELLANT VS. MSEB EMPLOYEES CO-OP. CREDIT SOCIETY LTD., GANDHI CHAMAN, OLD JALNA, JALNA. PAN: AAAAM6294R RESPONDENT APPELLANT BY : SHRI B.C. MA LAKAR RESPONDENT BY : SHRI S.K. TYAGI DATE OF HEARING: 15.07.2014 DATE OF ORDER : 18.07.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL), AURANGABAD, DATED 01.01.2013 FOR A.Y. 2008-09 U/S. 154 OF I.T. ACT ON THE POINT OF ALLOWABILITY OF DEDUCTION U/S.80P OF THE I.T. ACT, 1961. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CREDIT CO- OPERATIVE SOCIETY OF MSEB EMPLOYEES REGISTERED UNDE R MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960. THE ASSESSEE HAS FILED RETURN OF INCOME ON 21.10.2008 DECLARING TOTA L INCOME OF 25,78,890/- WITHOUT CLAIMING DEDUCTION U/S.80P(2)(A )(I) OF THE ACT. THE RETURN OF INCOME WAS PROCESSED U/S.143(1) ON 04.09.2009 ACCEPTING THE INCOME RETURNED. SUBSEQUE NTLY, THE ASSESSEE HAS FILED AN APPLICATION U/S.154 OF THE AC T REQUESTING THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S.80P(2) (A)(I) OF THE 2 ITA NO.793 OF 13 MSEB EMP. CREDIT CO.OP SOCIETY LTD. ACT. THE ASSESSING OFFICER DID NOT ALLOW THE DEDUC TION U/S.80P(2)(A)(I) OF THE ACT AND REJECTED THE APPLIC ATION FILED BY THE ASSESSEE BY PASSING ORDER U/S.154 OF THE ACT. 3. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AU THORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) ON THE P OINT OF RECTIFICATION, HAD OBSERVED THAT THE TAX BASE SOFTW ARE HAS BEEN RECENTLY DEVELOPED AND USAGE OF THE SAME REQUIRES L OT OF EXPERTISE AND ANY SMALL CLERICAL MISTAKE IN MAKING DATA ENTRY MAY RESULT INTO INCORRECT FILING OF E-RETURN. FURTHER, AS THE SOFTWARE WAS RECENTLY DEVELOPED, THERE WERE BOUND TO BE SOME TEC HNICAL ERRORS IN PROGRAMMING OF THE SAME AND HENCE THOUGH THE DED UCTION WAS NOT ALLOWED IN THE E-RETURN PREPARED RESULTING INTO TAX DEMAND, IN THE ACKNOWLEDGEMENT OF E-RETURN GENERATE D BY THE SOFTWARE RESULTED INTO NIL DEMAND AS THE DEDUCTION HAS BEEN ALLOWED. THEREFORE, THE SAID MISTAKE WAS FOUND REC TIFIABLE BY THE CIT(A) WHILE ALLOWING THE ASSESSEES CLAIM. THE SI MILAR VIEW HAS BEEN TAKEN BY ITAT MUMBAI BENCH IN THE CASE OF SHRI KANT REAL ESTATE (P) LTD. VS. ITO, MUMBAI (2012) 26 TAXMANN.C OM 265 (MUM), WHEREIN A CLERICAL ERROR IN E-RETURN FILING AS THE SHORT TERM CAPITAL GAIN HAD NOT BEEN SHOWN UNDER SCHEDULE -CG OF E- RETURN. THE ITAT HAS HELD THAT IN THE PRESENT SYST EM OF E-FILING OF RETURN WHICH IS TOTALLY DEPENDENT UPON USAGE OF SOFTWARE, IT WAS POSSIBLE THAT SOME CLERICAL ERRORS MAY OCCUR AT THE TIME OF ENTERING THE DATA IN THE ELECTRONIC FORM. ACCORDING LY, IT WAS HELD THAT SUCH MISTAKES ARE TO BE RECTIFIED U/S.154 OF T HE ACT. HAVING ACCEPTED THIS CONTENTION, THE CIT(A) HELD THAT EVEN ON MERIT, THE ASSESSEE SOCIETY IS ELIGIBLE FOR DEDUCTION U/S.80P( 2)(A)(I) OF THE ACT. IN FACT, THE ASSESSING OFFICER HAS REJECTED T HE CLAIM OF THE ASSESSEE ON MERIT ON THE FOLLOWING REASONS. (1) THE APPELLANT CREDIT CO-OPERATIVE IS A PRIMARY CO- OPERATIVE BANK AS PER EXPLANATION BELOW SUB-SECTION 4 3 ITA NO.793 OF 13 MSEB EMP. CREDIT CO.OP SOCIETY LTD. OF SECTION 80P AND HENCE NOT ELIGIBLE TO CLAIM DEDUCTION U/S 80P(2)(A)(I) OF THE I.T. ACT. (2) THE CLAUSE (VIIA) INSERTED IN SECTION 2(24) BY THE FINANCE ACT, 2006 TO PROVIDE THAT THE PROFITS AND G AINS OF BUSINESS OF BANKING INCLUDES INCOME OF CREDIT CO - OPERATIVE SOCIETIES FROM PROVIDING CREDIT FACILITIE S TO ITS MEMBERS. (3) THE AMENDMENT TO SECTION 80(4) BY FINANCE ACT, 2006 PROVIDES THAT THE PROVISIONS OF SECTION 80P SHALL N OT APPLY IN RELATION TO CO-OPERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY AND PRIMARY CO- OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. (4) THE EXPLANATION TO SECTION 80P(4) LAID DOWN THA T A 'CO OPERATIVE BANK' SHALL HAVE THE MEANING ASSIGNED TO IT IN PART-V OF THE BANKING REGULATION ACT, 1949. (5) AS PER CLARIFICATION ISSUED BY CBDT IN F.NO.L33 /06/ 2007-TPL VIDE LETTER DATED 09/05/2008, CO-OPERATIVE BANK SHALL HAVE THE MEANING ASSIGNED TO IT IN PART- V OF THE BANKING REGULATION ACT, 1949. AS PER PART-V OF THE BANKING REGULATION ACT, 'CO-OPERATIVE BANKS' MEANS A STATE CO-OPERATIVE BANK, A CENTRAL CO- OPERATIVE BANK AND PRIMARY CO-OPERATIVE BANK. (6) CLAUSE (CCI) OF SECTION-5 DEFINES A CO-O PERATIVE BANK TO INCLUDE A PRIMARY CO-OPERATIVE BANK AND CLAUSE (CCII) DEFINES A COOPERATIVE CREDIT SOCIETY TO MEAN CO-OPERATIVE SOCIETY THE PRIMARY OBJECT OF WH ICH IS TO PROVIDE FINANCIAL ACCOMMODATION TO ITS MEMBE RS. CLAUSE (CCV) DEFINES A PRIMARY CO-OPERATIVE BANK IS A COOPERATIVE SOCIETY WHOSE PRIMARY OBJECTIVE OR PRINCIPAL BUSINESS IS TRANSACTING IN BANKING BUSINE SS WHOSE PAID-UP CAPITAL AND RESERVE IS MORE THAN RS.1,00,000/- ETC. (7) THE REPORT OF MADHAVARAO COMMITTEE 1999 FORMED BY RBI SUPPORTS THE VIEW THAT PRIMARY CREDIT CO-OPERAT IVE SOCIETIES AUTOMATICALLY BECOMES A PRIMARY CO-OPERAT IVE BANK AND HENCE IT HAS TO APPLY TO RBI FOR A LICENCE TO CARRY ON BANKING BUSINESS BUT IT CAN CARRY ON BANKI NG BUSINESS UNTIL IT IS GRANTED A LICENCE OR NOTIFIED THAT A LICENCE CANNOT BE GRANTED TO IT. (8) THE APPELLANT IS CARRYING ON THE BANKING ACTIVI TY AS DEFINED IN SECTION-5 OF THE BANKING REGULATION ACT AS PER WHICH 'BANKING MEANS THE ACCEPTING FOR THE PURPOSE OF LENDING OR INVESTMENT OF DEPOSITS OF MON EY FROM THE PUBLIC REPAYABLE ON DEMAND OR OTHERWISE 4 ITA NO.793 OF 13 MSEB EMP. CREDIT CO.OP SOCIETY LTD. AND WITHDRAWAL BY CHEQUE, DRAFT ORDER OR OTHERWISE. ' HOWEVER, THE TERM TRANSACTION IN BANKING BUSINESS WILL INCLUDE NOT ONLY THE BUSINESS ENUMERATED IN SECTION 5B OF BANKING REGULATION ACT, 1949 BUT ALSO THOSE ACTIVITIES. 3.1 IN THIS REGARD, THE STAND OF THE ASSESSEE TO SU PPORT HIS CLAIM FOR DEDUCTION U/S.80P(2)(A)(I) OF THE ACT WAS AS UNDER: (1) IN VIEW OF AMENDMENT TO SUB-SECTION-4 OF SECTI ON 80P INSERTED W.E.F. 1 ST APRIL, 2007 BY FINANCE ACT, 2006 DEDUCTION U/S 80P(2) WOULD NOT BE ALLOWABLE TO A CO - OPERATIVE BAN, HOWEVER, THE DEDUCTION U/S 80P(2)(A) (I) CONTINUES TO BE ALLOWED TO CREDIT COOPERATIVE SOCIE TY. (2) AS PER AMENDMENT TO SUB-SECTION-4 TO SECTION- 80P/EXPLANATION TO THE SAID SUB-SECTION 'CO-OPERATI VE BANK' AND 'PRIMARY AGRICULTURAL CREDIT SOCIETY ' SHALL HAVE THE MEANING RESPECTIVELY ASSIGNED TO HIM IN PA RT-V OF THE BANKING REGULATION ACT, 1949. THEREFORE, THE EX PRESSION 'CO-OPERATIVE BANK' REFERRED TO IN BANKING REGULATI ON ACT, 1949, SECTION-56 PART-V MEANS STATE CO-OPERATIVE B ANK, CENTRAL CO-OPERATIVE BANK AND PRIMARY COOPERATIV E BANK AND OBVIOUSLY THE CREDIT CO-OPERATIVE SOCIETY, THE PRIMARY OBJECT OF WHICH IS TO PROVIDE FINANCIAL ACCOMMODATI ON TO ITS MEMBERS IS NOT COVERED BY THE SAID EXPRESSION 'CO- OPERATIVE BANK'. (3) THE FINANCE ACT, 2006 HAS INSERTED CLAUSE (VIIA ) IN SECTION 2(24) W.E.F. 1 ST APRIL, 2007 WHICH LAY DOWN THAT INCOME INCLUDES PROFIT & GAINS OF ANY BUSINESS OF B ANKING (INCLUDING PROVIDING CREDIT FACILITIES) CARRIED ON BY A CO- OPERATIVE SOCIETY WITH ITS MEMBERS. THIS AMENDMENT ONLY CLARIFIES THAT THE INCOME FROM ABOVE ACTIVITY SHALL BE REGARDED AS INCOME UNDER THE IT. ACT. THE A.O. SE EMS TO HAVE BEEN TAKING THE VIEW THAT THE SOCIETIES CARRYI NG ON BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMB ERS WOULD ALSO BE DISENTITLED TO DEDUCTION U/S 80P(2)(A)(I) D UE TO THIS AMENDMENT. (4) AS PER SECTION 80P(2)(A)(I) ACTIVITY OF BANKING IS SEPARATELY MENTIONED AND ACTIVITY OF PROVIDING CRED IT FACILITY TO MEMBERS IS ALSO SEPARATELY MENTIONED AND THESE T WO ACTIVITIES ARE SEPARATED BY WORD 'OR'. IN CLAUSE ( VIIA) OF SECTION 2(24), THE ACTIVITY OF PROVIDING CREDIT FAC ILITY TO MEMBERS IS MENTIONED AS PART OF BANKING BY USE OF WORD 'INCLUDING' AND BY PLACING THOSE WORDS IN BRAC KET AFTER THE WORD 'BANKING'. HENCE, DEFINITION IN CLAUSE ( VIIA) OF 5 ITA NO.793 OF 13 MSEB EMP. CREDIT CO.OP SOCIETY LTD. SECTION 2(24) DOES NOT GIVE ANY INDICATION THAT PRO HIBITION CONTAINED IN SUB SECTION (4) AGAINST ALLOWANCE OF DEDUCTION U/S 80P(1) AND (2). THEREFORE, THE CREDIT CO-OPERA TIVE SOCIETY PROVIDING CREDIT FACILITY TO MEMBERS IS NOT A CO- OPERATIVE BANK WITHIN THE MEANING OF PART V OF BANKING REGULATION ACT, 1949. (5) PART-II OF BANKING REGULATION ACT, 1949 SECTION 7(1) STATES THAT USE OF WORDS 'BANK', 'BANKER' OR 'BANKI NG' - NO CO-OPERATIVE SOCIETY OTHER THAN A CO-OPERATIVE BANK SHALL USE AS .PART OF ITS NAME OR IN CONNECTION WITH ITS ANY OF THE WORDS 'BANK' 'BANKER' OR 'BANKING', AND NO CO-OPERA TIVE SOCIETY SHALL CARRY ON THE BUSINESS OF BANKING, AND NO CO- OPERATIVE SOCIETY SHALL CARRY ON ITS BUSINESS OF BA NKING IN INDIA UNLESS IT USES AS PART OF ITS NAME AT LEAST O NE OF SUCH WORDS. THE ASSESSEE IS NOT USING THESE WORDS AND HENCE IT CANNOT BE TREATED AS BANK. (6) AFTER INSERTION OF SECTION 80P VIDE FINANCE ACT, 20 06, SUBSEQUENTLY FINANCE ACT, 2007 AMENDED THE PROVISIO NS OF SECTION 36(L)(VIIA) ALSO WITH RETROSPECTIVE W.E.F. 01/04/2007. CBDT CIRCULAR NO.3/2008 DATED 12/03/2008 AMPL IFIES THE REASONING FOR THE AMENDMENT IN PARA 20.2 ST ATES THAT THE DEDUCTION EARLIER ALLOWABLE UNDER SECTION 80P I N THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING (CO-OPERATIVE BANKS) HAS BEEN WITHDRAWN FROM ASSESSMENT YEAR 2007-08 BARRING IN T HE CASE OF PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOP MENT BANK, PARAGRAPH 20.3 STATE THAT SINCE PROFIT OF CO- OPERATIVE BANKS HAVE BECOME TAXABLE AFTER WITHDRAWA L OF SOP DEDUCTION, THE FINANCE ACT, 2007 HAS AMENDED SUB-CLAUSE (A)(VIIA) OF SUB-SECTION (1) OF SECTION 36 TO ALLOW DEDUCTION IN RESPECT OF ANY PROVISION FOR BAD AND D OUBTFUL DEBTS TO A CO-OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATI VE AGRICULTURAL AND RURAL DEVELOPMENT BANK. MOREOVER, THE DATE OF WITHDRAWAL OF SECTION 80P FOR CO-OPERATIVE BANKS BEING 01/04/2007, THIS AMENDMENT HAS BEEN MAD E RETROSPECTIVELY FROM 01/04/2007 (PARAGRAPH 20.7). THE DEDUCTION SPECIFIED UNDER SECTION 36(1)(VIIA) IS TH US NOT APPLICABLE TO COOPERATIVE CREDIT SOCIETY FOR THE OB VIOUS REASON THAT THE LEGISLATURE BELIEVES THAT DEDUCTION UNDER SECTION 80P CONTINUES TO BE AVAILABLE TO CO-OPERATI VE CREDIT SOCIETY EVEN AFTER 01/04/2007. (7) THE CO-OPERATIVE CREDIT SOCIETY DOES NOT ISSUE CHEQUE BOOKS TO ITS ACCOUNT HOLDERS. CHEQUE IS A NEGOTIAB LE INSTRUMENT WHICH IS TO BE CLEARED THROUGH CLEARING HOUSES AND NO ENTITY OTHER THAN BANKS CAN ISSUE CHEQUE BOO KS. 6 ITA NO.793 OF 13 MSEB EMP. CREDIT CO.OP SOCIETY LTD. SECTION 56(CCII) STATES 'CO-OPERATIVE SOCIETY' MEAN S A CO- OPERATIVE SOCIETY, THE PRIMARY OBJECT OF WHICH IS T O PROVIDE FINANCIAL ACCOMMODATION TO ITS MEMBERS AND INCLUDES A CO-OPERATIVE LAND MORTGAGE BANK. THUS, THE SPECIFI C DEFINITION TO CO-OPERATIVE CREDIT SOCIETY WILL OVER RIDE THE GENERAL DEFINITION PROVIDED FOR CO-OPERATIVE BANKS. THE PRIMARY OBJECTS OF THE CREDIT CO-OPERATIVE BANKS AN D CREDIT CO-OPERATIVE SOCIETIES. THE OBJECT OF CREDIT CO-OP ERATIVE SOCIETIES IS PROVIDING CREDIT FACILITY TO ITS MEMBE RS. (8) THE APPELLANT HAS SUBMITTED 15 DISTINCTIONS BET WEEN COOPERATIVE CREDIT BANK AND CO-OPERATIVE SOCIETY. THE APPELLANT HAS ALSO FILED A DETAILED SUBMISSION REBU TTING THE VARIOUS CONTENTIONS RAISED BY THE A.O. IN THE ASSES SMENT ORDER. 3.2 THUS, THE ISSUE BEFORE THE CIT(A) WAS WHETHER T HE CREDIT COOPERATIVE SOCIETIES ARE COOPERATIVE BANKS AS THE DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT WAS AVAILABLE TO CREDIT CO- OPERATIVE SOCIETIES PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE CO -OPERATIVE BANKS ARE NOT ENTITLED TO DEDUCTION U/S 80P(2)(A)(I) OF T HE ACT. IN VIEW OF AMENDMENT TO SECTION 80P(4) BY FINANCE ACT, 2006 W. E.F. 01.04.2007. THE RELEVANT PORTION OF AMENDED SECTIO N 80P(4) READS AS UNDER:- '4. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN RELATION TO ANY COOPERATIVE BANK OTHER THAN A PRIMARY AGRICU LTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTUR AL AND RURAL DEVELOPMENT BANK. EXPLANATION-FAR THE PURPOSES OF THIS SUB-SECTION,- (A) 'CO-OPERATIVE BANK' AND 'PRIMARY AGRICULTURAL C REDIT SOCIETY' SHALL HAVE THE MEANINGS RESPECTIVELY ASSIG NED TO THEM IN PART V OF THE BANKING REGULATION ACT, 1949 (30 OF 1949) (B) . 3.3 IN VIEW OF THE ABOVE EXPLANATION, THE CO-OPERAT IVE BANK SHALL HAVE THE MEANING STATED IN PART V OF THE BANKING RE GULATION ACT, 1949. ACCORDING TO SECTION 56 OF THE BANKING REGUL ATION ACT, 'CO-OPERATIVE BANK' MEANS A STATE CO-OPERATIVE BANK , A CENTRAL CO-OPERATIVE AND A PRIMARY CO-OPERATIVE BANK. IN V IEW OF THE 7 ITA NO.793 OF 13 MSEB EMP. CREDIT CO.OP SOCIETY LTD. ABOVE PROVISION IN PART-V OF THE BANKING REGULATION ACT, 1949 IT IS OBVIOUS THAT CO-OPERATIVE SOCIETY IS NOT REGARDE D AS 'CO- OPERATIVE BANK'. IT HAS ALSO BEEN LAID DOWN SECTIO N 56(CCII) IN PART-5 OF BANKING REGULATION ACT, THAT 'CO-OPERATIV E CREDIT SOCIETY' MEANS A CO-OPERATIVE SOCIETY, THE PRIMARY OBJECT OF WHICH IS TO PROVIDE FINANCIAL ACCOMMODATION TO ITS MEMBERS AND INCLUDES A CO-OPERATIVE LAND MORTGAGE BANK. IN VIE W OF THIS PROVISION, IT IS OBVIOUS THAT THE MEANING OF CO-OPE RATIVE CREDIT SOCIETY IS SEPARATELY GIVEN AND IT DOES NOT INCLUDE CO-OPERATIVE BANK OTHER THAN CO-OPERATIVE LAND MORTGAGE BANK. 3.4 FURTHER, CBDT CIRCULAR BEARING NO.3/2008 DATED 12.03.2008 ALSO MAKES IT CLEAR THAT THE AMENDMENT T O SECTION 80P(4) HAS WITHDRAWN THE DEDUCTION U/S 80P IN RESPE CT OF CO- OPERATIVE BANKS. FURTHER, THE AMENDMENT TO SECTION 36(1)(VIIA) BY FINANCE ACT, 2007 W.E.F. 01.04.2007 ALSO PROVIDE S THAT THE DEDUCTION IN RESPECT OF BAD DEBTS SHALL BE ALLOWABL E ALSO TO CO- OPERATIVE BANKS. THIS AMENDMENT ALSO SUGGESTS THAT THE DEDUCTION U/S.80P HAS BEEN WITHDRAWN BY FINANCE ACT , 2006 W.E.F. 01.04.2007 IN RESPECT OF CO-OPERATIVE BANKS ONLY. THE CENTRAL BOARD OF DIRECT TAXES VIDE CLARIFICATION BE ARING F.NO.L33/06/2007-TPL VIDE LETTER DATED 09.05.2008 H AS CLARIFIED THAT THE DELHI CO-OPERATIVE URBAN THRIFT & CREDIT S OCIETY LTD. DOES NOT FALL WITHIN THE MEANING OF CO-OPERATIVE BA NKS AS DEFINED IN PART-V OF THE BANKING REGULATION ACT, 1949. SUB -SECTION-4 OF SECTION 80P WILL NOT APPLY IN ITS CASE. THE CBDT H AS ALSO CLARIFIED THAT IN PART-V OF THE BANKING REGULATION ACT, 1949 'CO- OPERATIVE BANKS' MEANS A STATE CO-OPERATIVE BANK, A CENTRAL CO- OPERATIVE BANK AND PRIMARY CO-OPERATIVE BANK. FROM THE CLARIFICATION, IT IS OBVIOUS THAT CREDIT CO-OPERATI VE SOCIETIES ARE NOT COVERED BY THE MEANING OF COOPERATIVE BANKS AS DEFI NED IN PART V OF THE BANKING REGULATION ACT, 1949 AND ARE ENTIT LED TO DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. 8 ITA NO.793 OF 13 MSEB EMP. CREDIT CO.OP SOCIETY LTD. 3.5 THE ITAT, PUNE IN SIMILAR SITUATION HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF ITO VS. JANKA LYAN NAGARI SAHAKARI PAT SANSTHA LTD. (2012) 24 TAXMAN.COM 127 (PUNE TRIB.) IN VIEW OF THE ABOVE DISCUSSION, THE CIT(A) WAS JUSTIFIED THAT CO-OPERATIVE SOCIETY IS NOT A CO-OPERATIVE BAN K AND THEREFORE, THE ASSESSEE CREDIT CO-OPERATIVE SOCIETY IS ENTITLE D TO DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. ACCORDINGLY, THE ASSE SSING OFFICER WAS RIGHTLY DIRECTED TO ALLOW THE DEDUCTION AS PRAYED B Y THE ASSESSEE. 4. REGARDING NON-CLAIMING OF DEDUCTION IN THE RETUR N OF INCOME BY THE ASSESSEE, THE APPELLATE AUTHORITIES H AVE POWER TO ALLOW THE DEDUCTION WHICH IS ALLOWABLE UNDER THE PR OVISIONS OF THE INCOME TAX ACT. A SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RAMCO INTERNATIONAL (2011) 332 ITR 306 (P&H). FURT HER, A SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. METALMAN AUTO (P) LTD. (2011) 336 ITR 434 (P&H) AND VARIOUS OTHER DECISIONS WHERE IN, A SIMILAR VIEW HAS BEEN CONSIDERING THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (2006) 2 84 ITR 323 (SC), ON WHICH THE ASSESSEE HAD RELIED UPON. 4.1 IN VIEW OF ABOVE DISCUSSION, THE CIT(A) WAS JUS TIFIED IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT THOUGH THE SAME HAS NOT BEEN CLAIMED BY THE ASSESSEE IN RETURN OF INCOME. IT IS SETTLED LAW THAT CORREC T INCOME OF THE ASSESSEE IS TO BE ASSESSED AS PER PROVISIONS OF INC OME TAX ACT, 1961 IN SPITE OF HIGHER INCOME INCORRECTLY DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. THIS VIEW WAS FO RTIFIED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. ARCHANA R. DHANWATEY (1981) 136 ITR 355 (BOM), WHER EIN IT WAS HELD THAT UNDER THE I.T. ACT, 1961, THE AUTHORITIE S ARE OBLIGED TO ACT IN ACCORDANCE WITH LAW. TAX HAS TO BE COLLECTE D AS PER THE PROVISION OF THE ACT. IF AN ASSESSEE, UNDER A MIST AKE, 9 ITA NO.793 OF 13 MSEB EMP. CREDIT CO.OP SOCIETY LTD. MISCONCEPTIONS OR ON BEING NOT PROPERLY INSTRUCTED IS OVER ASSESSED, THE CONCERNED AUTHORITY UNDER THE ACT IS OBLIGED, REQUIRED TO ASSIST SUCH AN ASSESSEE BY ENSURING THA T ONLY LEGITIMATE TAXES ARE DETERMINED AS COLLECTIBLE. IF PARTICULAR LEVY IS NOT PERMISSIBLE UNDER THE ACT, THE TAX CANNOT BE CO LLECTED. IN VIEW OF ABOVE, THE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I) OF THE ACT AND THE ASSESSEE SOCIETY IS ELIGIBLE FOR DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT ON MERIT AS WELL, AS DISCUSSED ABOVE. THIS REA SONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 18 TH OF JULY, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 18 TH JULY, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A), AURANGABAD 4) THE CIT, AURANGABAD 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE