M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., Jaipur V. ITO, Sikar

ITA 999/JPR/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91877 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DHK
• Assessee Lawyers: FAZLUR REHMAN S
• Section: 143(3); 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 999/JP/2011 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 . M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., BASANT VIHAR, JAIPUR ROAD, SIKAR. CUKE VS. THE INCOME-TAX OFFICER, WARD 1, SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAAAS 1603 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA & SHRI FAZLUR REHMAN (ADVOCATES) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21.05.2015. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 17/7/2015. VKNS'K@ ORDER PER SHRI T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM THE ORDER OF LD. CIT (A)-III, JAIPUR DATED 29.08.2011 FOR THE A.Y. 2008- 09. THE GROUNDS RAISED IN THE APPEAL ARE AS UNDER :- 1) THE IMPUGNED ADDITIONS AND DISALLOWANCES MADE IN THE ORDER U/S 143(3) OF THE ACT DATED 29.08.2011 ARE BAD IN LAW AND ON F ACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME KINDLY BE DELETED. 2) RS. 50,32,224/- : THE LD. CIT (A) ERRED IN LAW A S WELL AS ON THE FACTS OF THE CASE IN DENYING THE CLAIM OF DEDUCTION MADE BY THE SOCIETY U/S 2 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. 80P(2)(A)(I) OF THE ACT. THE CLAIM OF DEDUCTION SO DENIED, BEING TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS KINDLY BE ALLOWED AS CLAIMED. 3) THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN CONFIRMING APPLICATION OF THE PROVISIONS OF SEC. 80 P(4) OF THE ACT AND CONSEQUENTLY, DENYING THE CLAIM OF DEDUCTION MADE B Y THE SOCIETY U/S 80P(2)(A)(I) OF THE ACT. THE CLAIM OF DEDUCTION SO DENIED, BEING TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS KINDLY BE ALLOWED AS CLAIMED. 2. THE ASSESSEE SOCIETY IS ENGAGED IN THE BUSINESS OF BANKING. THE AO OBSERVED THAT ASSESSEE FILED ITS RETURN OF INCOME ON 30.09.2 008 DECLARING TOTAL INCOME AT NIL. THE CASE WAS SCRUTINIZED UNDER SECTION 143(3) OF TH E IT ACT. THE AO GAVE SHOW CAUSE NOTICE AFTER CONSIDERING THE AMENDMENT MADE IN SECT ION 80P WITH EFFECT FROM 01.04.2007. DURING THE YEAR UNDER CONSIDERATION TH E ASSESSEE SOCIETY HAD CLAIMED DEDUCTION UNDER SECTION 80P(2)(A)(I) OF RS. 50,32,2 44/- STATING THAT THE BANK IS AGRICULTURE CREDIT SOCIETY AND PRIMARY CO-OPERATIVE AGRICULTURE & RURAL AND LAND DEVELOPMENT BANK. AS PER AO, AFTER THE AMENDMENT, ONLY AGRICULTURE CREDIT SOCIETY OR PRIMARY CO-OPERATIVE AGRICULTURE & RURAL AND LAND D EVELOPMENT BANK ARE ENTITLED FOR DEDUCTION BY VIRTUE OF SECTION 80P(4) OF THE IT ACT . HE ALSO CONSIDERED THE CBDT CIRCULAR DATED 20.09.2010 ON THIS ISSUE. THE AO HEL D THAT ASSESSEE BANK HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE IN RESPECT OF IT S CLAIM AND HAS NOT FURNISHED THE OBJECTS OF THE BANK WHEREFROM ITS CLAIM THAT IT IS AGRICULTURE AND RURAL DEVELOPMENT BANK CAN BE VERIFIED. THE ASSESSEE AFTER THIS AMEN DMENT IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 80P(2)(A)(I). AFTER THIS AMENDMENT, DEFINITION OF CO-OPERATIVE BANK AND PRIMARY AGRICULTURAL SOCIETY AND PRIMARY CO-O PERATIVE AGRICULTURAL AND RURAL 3 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. DEVELOPMENT BANK HAS ALSO BEEN GIVEN IN THE ACT JU ST BELOW SUB-SECTION (4) OF SECTION 80P. THEREFORE, DEDUCTION CLAIMED UNDER SECTION 80P AT RS. 50,32,244/- WAS ADDED TO THE INCOME OF THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE LD. CIT (A) WHO HAD CONFIRMED THE ADDITION BY OBSERVING AS UNDER :- 2.3. I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS OF THE AO AND ALSO THE SUBMISSION MADE BY THE LD. AR IN THIS REGARD. THE B ASIC CONTROVERSY IN THE PRESENT APPEAL IS ABOUT THE ADMISSIBILITY OF SEC. 8 0P(2)(A)(I) OF THE ACT, IN THE CASE OF THE APPELLANT BANK. THE AO HAS MENTION THAT AFTER THE AMENDMENT IN THE SEC. 80P, W.E.F. 01.04.2007, AND I NTRODUCTION OF SUB- SECTION 4 TO THE IMPUGNED SECTION, THE DEDUCTION U/ S 80P WOULD APPLIED ONLY TO A CORPORATIVE BANK/CREDIT SOCIETY WHICH ARE PRIMARILY ENGAGED IN AGRICULTURE AND RURAL DEVELOPMENT ACTIVITIES, AS ME NTIONED IN THE EXPLANATION GIVEN BELOW THE SUB-SECTION FOR OF 80P( 4) OF THE ACT. SINCE THE APPELLANT BANK FAILED TO FURNISHED ANY DETAILS, WHI CH COULD SUBSTANTIATED THE ABOVE CONDITIONS, THEREFORE, THE AO DISALLOWED THE CLAIMED MADE U/S 80P(2)(A)(I) OF THE ACT. ON THE OTHER HAND THE LD. AR THROUGH HIS WRITTEN SUBMISSION, CONTENDED THAT A LIBERAL INTERPRETATION OF RELEVANT SECTIONS WITH PROPER UNDERSTANDING OF THE FACTS WOULD LEAD T O A CONCLUSION, WHICH WOULD SUPPORT THE APPELLANT CASE. IN THE LIGHT OF T HE ABOVE DELIBERATIONS, EVENTUALLY, I FIND THAT THE AO IS QUITE JUSTIFIED, WHILE HOLDING THAT THE APPELLANT BANK IS NOT ENTITLED FOR THE BENEFIT EXTE NDED U/S 80P OF THE ACT, FOR THE FOLLOWING REASONS :- I) THE PLAIN READING OF THE PROVISIONS OF RELEVANT SEC TIONS I.E. 80P(2)(A)(I) AND 80P(4) STIPULATE THAT A CORPORATIV E SOCIETY ENGAGED IN CARRYING ON BUSINESS OF BANKING AND PROV IDING CREDIT FACILITIES TO ITS MEMBER WOULD BE ENTITLED FOR SUCH BENEFIT PROVIDED 4 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. SUCH CO-OPERATIVE BANK/SOCIETY SHOULD BE FULFILLING THE FOLLOWING CONDITIONS A. SUCH BANK/SOCIETY MUST BE HAVING ITS AREA OF OPERAT ION CONFINED TO A TALUKA (TEHISEL), AND B. THE PRINCIPAL OBJECT OF SUCH BANK SHOULD BE PROVIDI NG A LONG TERM CREDITS FOR THE AGRICULTURE AND RURAL DEVELOPMENT ACTIVITIES. 2.3.1. IN VIEW OF THE DIVERGENT UNDERSTANDING OF LA W ON THE PART OF THE AO AND LD. AR, TO PERCEIVE THE EXACT MEANING AND AMBIT OF THE ABOVE PROVISIONS, THE HELP OF THE OF PRINCIPLE OF INTERPR ETATION OF LAW WAS CONSIDERED RELEVANT AND ESSENTIAL, UNDER THE GIVEN CIRCUMSTANCES. THE CARDINAL RULE OF INTERPRETATION OF LAW SUGGESTS THA T WHEN THE MEANING OF THE WORDS/PHRASE USED IN A STATUTE IS CLEAR AND UNA MBIGUOUS, THEN SUCH WORDS TO BE GIVEN ITS PLAIN AND GRAMMATICAL MEANING AND EFFECT OF THE SUCH LAW HAS TO BE GIVEN THE IN SUCH CONTEXT ONLY. IN SUCH CASES, THE COURT CAN NOT ADD ANYTHING INTO A STATUTORY PROVISI ON, EVEN IF IT LEADS TO HARSH CONSEQUENCES OF THE STATUE, IF ANY. IN SIMPL ER TERM, WHEN THERE IS NO AMBIGUITY IN THE LANGUAGE OF THE STATUTE, THEN S UCH PROVISIONS CAN NOT BE INTERPRETED IN DIFFERENT MANNER TO CONFER BENEFI T ON ASSESSEE. IN THIS REGARD THE RELIANCE IS PLACED ON FOLLOWING DECISION S :- DHARMENDRA TEXTILE LTD. 306 ITR 277 (SC)\ VIJAY KUMAR & OTHERS 151 ITR 48 (KAR.) T & ARVINDA READY 120 ITR 461 (SC) IPCA LABORATORY LTD. 266 ITR 5221 (SC) THE LD.AR, IN HIS SUBMISSION, CONTENDED THAT THE IN TERPRETATION OF LAW SHOULD BE DONE, IN A MANNER, WHICH IS BENEFICIAL TO THE ASSESSEE, THEREFORE, THE CRUCIAL WORD USED IN THE EXPLANATION TO THE SUB-SECTION 4 OF SEC. 80P, I.E. A TALUKA INCLUDES MORE THAN ONE T ALUKA IN NUMBERS. MOREOVER, THE OBJECTS OF THE APPELLANT BANK ARE AKI N AND PART & PARTIAL OF THE AGRICULTURE AND RURAL DEVELOPMENT ONLY, THOUGH THEY HAVE GIVEN DIFFERENT NOMENCLATURE IN THE MANUAL OF THE BANK. HOWEVER IN VIEW OF THE 5 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. ABOVE SETTLED LAW, TOWARDS THE INTERPRETATION OF A STATUTE, THE APPELLANT REQUESTS OF PERCEIVING AND UNDERSTANDING THE RELEVA NT PROVISIONS IN DIFFERENT MANNER THEN WHAT THEY APPEAR FROM THEIR P LAIN MEANING OF RELEVANT PHRASES USED THEREIN, IS FOUND UNTENABLE A ND REJECTED ACCORDINGLY. 2.3.2. IN VIEW OF THE ABOVE LEGAL POSITION, THE FAC TUAL POSITION OF THE APPELLANT IS EXAMINED AND THE OUT CAME OF THE SAME IS BEING DISCUSSED AS UNDER :- S.R. CONDITIONS OF THE RELEVANT SECTIONS I.E. 80P(2)(A)(I) & 80P(4). APPELLANT FACTUAL POSITION I.R.O. SUCH CONDITIONS (AS MENTIONED IN THE MANUAL OF THE BANK) REMARKS 1. THE BANKS ACTIVITIES SHOULD BE CONFINED TO A/SINGLE TALUKA THE BANKS AREA OF THE OPERATIONS CONFINED TO SIX TALUKIA/TEHISLE OF SIKAR DIST. CONDITION NOT FULFILLED. 2. THE MAJOR OBJECT OF THE BANK/SOCIETY IS PROVIDING LONG TERM LOAN FOR AGRICULTURE AND RURAL DEVELOPMENTS ONLY THE OBJECTS OF THE BANK ARE PROVIDING LOAN FOR IMMOVABLE PROPERTIES, AGRICULTURE LAND, RESIDENTIAL PLOTS AND HOUSES, AND ALSO TO BUY NSC, KVC AND TOWARDS FDR ALSO. SINCE AGRICULTURE AND RURAL DEVELOPMENTS OBJECT IS ONE OF THE SEVERAL OBJECTS OF THE APPELLANT BANK, THUS THE CONDITION IS NOT FOUND FULFILLED. 3. BEING NOT A ORDINARY COOPERATIVE BANK, THE ELIGIBLE BANK/SOCIETY CAN NOT ACCEPT LOANS/DEPOSITS FROM ITS MEMBERS/NON MEMBERS. THE MANUAL OF THE APPELLANT BANK AUTHORITIES THEM TO ACCEPT SUCH DEPOSITS ALSO. IN VIEW OF SUCH FACT, THE APPELLANT BANK ASSUMES THE CHARACTERISTIC OF A ORDINARY COOPERATIVE BANK THUS DOES NOT QUALIFIED FOR DEDUCTION FOR THE U/S 80P OF THE ACT. 2.3.3. AS FAR AS THE ISSUE OF ALLOWABILITY OF IMPUG NED DEDUCTION IN THE A.Y. 2007-08 BY MY LD. PREDECESSOR IS CONCERNED, THE SAM E IS NOT FOUND RELEVANT NOW, AS THE LEGAL SITUATION HAS CHANGED, A FTER THE AMENDMENT IN 6 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. THE SEC. 80P OF THE ACT, WHICH IS EFFECTIVE FROM 01 .04.2007 RELEVANT TO A.Y. 2008-09. IN THE PRESENT APPELLATE PROCEEDING, THE RELEVANT YEAR IS A.Y. 2008-09, THEREFORE THE DECISION GIVEN IN THE E ARLIER YEAR, I.E. BEFORE THE AMENDMENT IN THE ACT, AS NO BEARING IN THE CURR ENT YEAR. ACCORDINGLY, IN THE CURRENT YEAR THE CLAIM OF THE APPELLANT FOR IMPUGNED DEDUCTION HAS BEEN CONSIDERED IN THE LIGHT OF THE AMENDED RELEVAN T PROVISIONS, ASDISCUSSED HEREINABOVE. UNDER THE ABOVE FACTS AND CIRCUMSTANCES, IT IS EVID ENT THAT THE APPELLANT BANK HAS NOT FULFILLED THE NECESSARY CRIT ERIONS AND CONDITIONS, THEREFORE, THEY ARE FOUND NOT ELIGIBLE FOR THE DEDU CTION U/S 80P(2)(A)(I) OF THE ACT. ACCORDINGLY THE AOS STAND, IN THIS REGAR D, IS UPHELD AND THE PRESENT GROUND OF APPEAL IS HEREBY REJECTED. 4. NOW THE ASSESSEE IS BEFORE US. THE LD. A/R OF TH E ASSESSEE SUBMITTED THAT FROM A BARE READING OF THE PROVISIONS CONTAINED UNDER SECT ION 80P OF THE ACT, IT IS EXPLICITLY CLEAR THAT IF A CO-OPERATIVE SOCIETY IS ENGAGED IN CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND ITS GROSS TOTAL INCOME INCLUDES ANY INCOME THERE FROM, SUCH CO-OPERATIVE SOCIETY IS ENTITLED F OR THE DEDUCTION UNDER SECTION 80P(2)(A)(I). THE ASSESSEE IS A CO-OPERATIVE SOCIE TY AND HAS BEEN PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE ASSESSEE IS NOT A C O-OPERATIVE BANK OR NOT A PRIMARY CO- OPERATIVE BANK OR NOT EVEN A REGIONAL RURAL BANK. ASSESSEE IS NOT ENGAGED IN THE BUSINESS OF BANKING IN AS MUCH AS IT HAS NOT OBTAIN ED LICENSE REQUIRED FROM THE RESERVE BANK OF INDIA. THE AO WRONGLY INTERPRETED THE SECTI ON 80P(4). ONLY PRIMARY AGRICULTURAL CO-OPERATIVE SOCIETY (PACS) OR PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK (PCARDB) IS ENTITLED TO THE DEDUCT ION PROVIDED U/S 80P(2)(A)(I) OF 7 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. THE ACT. IN FACT, THE ASSESSEE IS NOT FOUND TO BE CO-OPERATIVE BANK, PROVISION OF SECTION 80P(4) BECOME IRRELEVANT AND, THEREFORE, ONE NEED N OT CONSIDER THE FURTHER EXCEPTION TO A COOPERATIVE BANK I.E. PACS OR PCARDB. SECTION 80P(2)(A)(I) NOWHERE SUGGEST SO. THE LAW CONTEMPLATES ALL TYPES OF CREDIT SOCIETIES INCLUDING THOSE WHICH ARE PRIMARY AGRICULTURAL CREDIT SOCIETY, ENGAGED IN PROVIDING C REDIT FACILITIES TO ITS MEMBERS, ELIGIBLE TO THE DEDUCTION. THUS ASSESSEES CASE IS COVERED UNDER SECTION 80P(2)(A)(I). SECTION 80P(4) WAS INSERTED BY THE FINANCE ACT, 2006 W.E.F. 01.04.2007 I.E. FOR AND FROM A.Y. 2007-08. HOWEVER, LD. AO ALLOWED THE DEDUCTION UNDE R SECTION 80P(2)(A)(I) IN A.Y. 2007-08. THEREFORE, THE PRESENT YEAR ALSO COVERED BY THE ORDER OF THE AO HIMSELF. THOUGH THE DOCTRINE OF RES JUDICATA DO NOT APPLY TO THE INCOME TAX PROCEEDINGS YET HOWEVER, UNLESS THERE IS A CHANGE IN THE FACTS AND CIRCUMSTANCES, THE VIEW TAKEN EARLIER SHOULD NORMALLY BE TAKEN CONSISTENTLY. FOR THIS HE RELIED ON THE CASE OF SARDAR KEHAR SINGH VS. CIT (1992) 195 ITR 769 (RAJ.) AND A VERY RECENT DECISION IN CIT VS. EXCEL INDUSTRIES LTD. (2013) 358 ITR 295 (SC). THIS VIEW IS ALSO SUPPORTED BY CBDT CIRCULAR NO. 14 OF 2006 DATED 28.12.2006. HE FURTHER DRAWN OUR ATTENTION TO DEFINITION OF BANKING, CO-OPERATIVE BANK. HE FURTHER RELIED ON FOLLOWING CASES :- DCIT VS. JAYALAKSHMI MAHILA VIVIDODESHAGALA SOUDH ARDA SAHARKARI LTD. (2012) 76 DTR 234 (PANAJI TRIB.) CIT VS. JAFARI MOMIN VIKAS CO-OPERATIVE CREDIT SO CIETY LTD. (2014) 100 DTR 421 (GUJ.) CIT VS. SHREE BILURU GURUBASAVE PATTINA SAHKARI S ANGH NIYAMITHA ITA NO. 5006/2013 DATED 5 TH FEBRUARY, 2014. CIT VS. BANGALORE CREDIT COOPERATIVE SOCIETY LTD. ITA NO. 598/2013 DATED 27 TH JUNE, 2014. 8 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. SAGAR CREDIT COOPERATIVE SOCIETY LTD. VS. CIT ITA NO. 306/BANGALORE/2014 ITO VS. YESWANTHPUR CREDIT COOPERATIVE SOCIETY LT D. ITA NO. 737/BANG/2011 DATED 11 TH APRIL, 2012. ACIT VS. M/S. BANGALORE COMMERCIAL TRANSPORT CRED IT COOP. SOCIETY LTD. ITA NO. 1069/BANG/2010 DATED 8.4.2011. ITO VS. JANKALYAN NAGRI SAHAKARI PAT SANSTHA LTD. (2012) 33 CCH 475 (PUNE TRIB.) CIT VS. SURAT VANKAR SAHAKARI SANGH LTD. TAX APPEAL NO. 1150 OF 2013 DATED 17.01.2014. THE AR FURTHER DRAWN OUR ATTENTION TO THE OBJECTS O F THE ASSESSEE, THE DEFINITION OF AGRICULTURE AS PROVIDED UNDER THE NABARD ACT AND DEFINITION OF COOPERATIVE BANK, PRIMARY AGRICULTURAL CREDIT SOCIETY, PRIMARY COOPE RATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK AND CLAIMED THAT ASSESSEE IS NOT A COOPERATIVE BANK, BUT PROVIDING LOANS TO THE AGRICULTURISTS FOR AGRICULTURAL PURPOS ES. THE AO AS WELL AS LD. CIT (A) CONSIDERED THE TALUKA FOR THE ASSESSEES ACTIVITY A S PER THE ACT BUT TALUKA CONSISTS OF SEVERAL TEHSILS AND DISTRICTS AS PER WIKIPEDIA ENCYC LOPEDIA). THE LAW USED THE WORD TALUK AND NOT TEHSIL. IT IS A SETTLED LAW THAT EVERY WORD USED BY THE LEGISLATURES IS SIGNIFICANT AND HAS TO BE GIVEN DUE WEIGHTAGE. THE COURTS CANNOT SUPPLY SOMETHING MISSING. THEREFORE, FOLLOWING THE PRINCIPLE OF STR ICT INTERPRETATION OF FISCAL STATUTE, THE WORD TALUK HAS TO BE UNDERSTOOD IN ITS PLAIN GRAM MATICAL MEANING AND THERE IS NO SCOPE OF ANY INFERENCE. HAD THE LEGISLATURES INTEND ED, IT COULD HAVE USED THE WORD TEHSIL. THUS, EVEN IF THE OPERATION WAS SPREAD T O 6 TEHSILS, IT WAS, IN ANY CASE WITHIN ONE TALUK ONLY. THE ASSESSEE IS PROVIDING LONG TER M CREDIT FOR AGRICULTURAL AND RURAL 9 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. DEVELOPMENT ACTIVITIES. THE ASSESSEE GRANTED LOANS FOR IMPROVEMENT OF AGRICULTURAL LAND AND PRODUCTION THERE FROM UNDER THE RAJASTHAN COOPERATIVES SOCIETY ACT. 4.1. IN ANY CASE, IF A CONTRARY DECISION IS AVAILAB LE, THE ISSUE BECOME DEBATABLE AND THE VIEW WHICH IS FAVOURABLE TO THE ASSESSEE, HAS T O BE ADOPTED AS HELD IN CASE OF CIT VS. VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC). THER EFORE, HE REQUESTED TO ALLOW THE DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. 5. AT THE OUTSET, THE LD. D/R SUPPORTED THE ORDER O F LD. CIT (A). 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE INTENTION OF THE AMENDMENT MADE IN SECTION 80P(4) H AS BEEN EXPLAINED BY THE CBDT VIDE CIRCULAR NO. 14/2006 DATED 28.12.2006 WHICH IS REPRODUCED AS UNDER :- CIRCULAR NO. 14/2006 DATED 28.12.2006. 1. INTRODUCTION. 1.1.THE FINANCE ACT, 2006 (HEREAFTER REFERRED TO AS THE ACT) AS PASSED BY THE PARLIAMENT, RECEIVED THE ASSENT OF THE PRESIDEN T ON THE 18.4.2006 AND HAS BEEN ENACTED AS ACT NO. 21 OF 2006. THIS CIRCUL AR EXPLAINS THE SUBSTANCE OF THE PROVISIONS OF THE ACT RELATING TO DIRECT TAXES XXXXXXXXXX 22. WITHDRAWAL OF TAX BENEFITS AVAILABLE TO CERTA IN CO-OPERATIVE BANKS. 22.1 SECTION 80P, INTER ALIA, PROVIDES FOR A DEDUCT ION FROM THE TOTAL INCOME OF THE CO-OPERATIVE SOCIETIES ENGAGED IN THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS, OR B USINESS OF A COTTAGE INDUSTRY, OR OF MARKETING OF AGRICULTURAL PRODUCE O F ITS MEMBERS, OR PROCESSING, WITHOUT THE AID OF POWER, OF THE AGRICU LTURAL PRODUCE OF ITS MEMBERS, ETC. 22.2 THE CO-OPERATIVE BANKS ARE FUNCTIONING AT PAR WITH OTHER COMMERCIAL BANKS, WHICH DO NOT ENJOY ANY TAX BENEFI T. THEREFORE, SECTION 80P HAS BEEN AMENDED AND A NEW SUB SECTION (4) HAS BEEN INSERTED TO 10 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. PROVIDE THAT THE PROVISIONS OF THE SAID SECTION SHA LL NOT APPLY IN RELATING TO ANY CO-OPERATIVE BANK OTHER THAN A PRIMARY AGRICULT URAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOP MENT BANK. THE EXPRESSIONS CO-OPERATIVE BANK, PRIMARY AGRICULTU RAL CREDIT SOCIETY AND PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOP MENT BANKI HAVE ALSO BEEN DEFINED TO LEND CLARITY TO THEM. 22.3 FURTHER, A NEW SUB CLAUSE (VIIA) HAS BEEN INSE RTED IN CLAUSE (24) OF SECTION 2 TO PROVIDE THAT THE PROFITS AND GAINS OF ANY BUSINESS OF BANKING (INCLUDING PROVIDING CREDIT FACILITIES) CARRIED ON BY A CO-OPERATIVE SOCIETY WITH ITS MEMBERS SHALL BE INCLUDED IN THE DEFINITIO N OF INCOME. 22.4 APPLICABILITY FROM ASSESSMENT YEAR 2007-08 ONWARDS. ASSESSEE IS A COOPERATIVE SOCIETY REGISTERED UNDER THE RAJASTHAN STATE CO-OPERATIVE SOCIETIES ACT, 1953. AS PER COPY OF MEMORANDUM AND RULES & REGULATIONS OF THE ASSESSEE, THE NAME GIVEN TO THE ASSESSEE IS SIKAR S AHAKARI BHOOMI VIKAS BANK LTD. IT OPERATES IN 6 TEHSILS OF SIKAR DISTRICT. THE OBJECT S OF THE BANK ARE AS UNDER :- 1. CSAD }KJK VIUS LNL;KSA DKS VPY LEIFRR] D`F'K HKWFE] VOKLH; HKOU VFKOK VKOKLH; HKW[K.M] RJY LEIFRR;KSA JK'VH; CPR&I=] FD LKU FODKL I=] HKWFE FODKL CSADKSA ESA LKOF/K TEK ,OA NKS DS VURXZR OF. KZR MN~NS';KSA GSRQ _.K NSUK@JKT; LJDKJ@HKKJR LJDKJ@ JK'VH; CSADKSA DH ;KS TUKVKSA ESA FCUK IZFRHKWFR DS CSADKSA DS LNL;KSA DKS _.K NSUK A 2. UKCKMZ@FJTOZ CSAD VKWQ BF.M;K }KJK LOHD`FR IZKIR GK SUS DH N'KK ESA LNL;KSA@XSJ LNL;KSA LS VEKURS FMIKSFTV~L IZKIR DJ UK A 3. BU MN~NS';KSA DH IWFRZ GSRQ CSAD] JKTLFKKU JKT; LGD KJH HKWFE FODKL CSAD DK LNL; CUSXH VKSJ MUDS }KJK FU/KKZFJR _.K UHFR ,OA VE KURKSA LACA/KH UHFR DK IKYU DJSXH A 11 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. THE ASSESSEE IS NOT A COOPERATIVE BANK AS PER BANKI NG REGULATIONS ACT. COOPERATIVE BANK MEANS A STATE COOPERATIVE BANK, A CENTRAL CO OPERATIVE BANK AND A PRIMARY COOPERATIVE BANK. PRIMARY COOPERATIVE BANK AS PER BANKING REGULATIONS ACT IS AS UNDER :- (CCV) PRIMARY CO-OPERATIVE BANK MEANS A CO-OPERA TIVE SOCIETY, OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY. AS PER THIS BOARDS CIRCULAR THIS AMENDMENT WAS APP LICABLE FROM A.Y. 2007-08. IN ASSESSMENT YEAR 2007-08, THE AO HAD ALLOWED THE BEN EFIT UNDER SECTION 80P(2)(A)(I) OF THE ACT IN THE CASE OF ASSESSEE. THIS ISSUE HAS BE EN CONSIDERED BY THE VARIOUS HIGH COURTS AS WELL AS ITATS PARTICULARLY IN CASE OF ACI T VS. M/S. BANGALORE COMMERCIAL TRANSPORT CREDIT COOPERATIVE SOCIETY LTD. IN ITA NO . 1069/BANG/2010 DATED 8.4.2011. THE OPERATIVE PORTION IS REPRODUCED AS UNDER :- 9.3. IF THE INTENTION OF THE LEGISLATURE WAS NOT TO GRANT DEDUCTION U/S 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-OPERA TIVE BANKS AND NOT TO CREDIT CO-OPERATIVE SOCIETIES. THE INTENTION OF THE LEGISLATURE OF BRING IN CO-OPERATIVE BANKS INTO THE TAXATION ST RUCTURE WAS MAINLY TO BRING IN PAR WITH COMMERCIAL BANKS. SINCE THE ASSESSEE IS A CO-OPERATIVE SOCIETY AND NOT A CO-OPERATIVE BANK, THE PROVISIONS OF SECTION 80P(4) WILL NOT HAVE APPLICATION IN THE ASSESSEES CASE AND, THEREFORE, IT IS ENTITLED TO DEDUCTION U/S 80P (2)(A)(I) OF THE ACT . THE FACTS BEING SIMILAR, THE DECISION SQUARE LY APPLIES. THE HONBLE GUJARAT HIGH COURT ALSO CONSIDERED THIS ISSUE IN THE CASE OF CIT VS. SURAT VANKAR SAHAKARI SANGH LTD. IN TAX APPEAL NO. 1150 O F 2013 DATED 17.01.2014. THE OPERATIVE PORTION IS REPRODUCED AS UNDER :- 12 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. 7. FROM THE ABOVE CLARIFICATION, IT CAN BE GATHER ED THAT SUB SECTION (4) OF SECTION 80P WILL NOT APPLY TO AN ASS ESSEE WHICH IS NOT A COOPERATIVE BANK. IN THE CASE CLARIFIED BY CBDT, DELHI COOP URBAN THRIFT & CREDIT SOCIETY LTD. WAS UNDER CONSID ERATION. CIRCULAR CLARIFIED THAT THE SAID ENTITY NOT BEING A COOPERAT IVE BANK, SECTION 80P(4) OF THE ACT WOULD NOT APPLY TO IT. IN VIEW OF SUCH CLARIFICATION, WE CANNOT ENTERTAIN THE REVENUES CONTENTION THAT SE CTION 80P(4) WOULD EXCLUDE NOT ONLY THE COOPERATIVE BANKS OTHER THAN THOSE FULFILLING THE DESCRIPTION CONTAINED THEREIN BUT AL SO CREDIT SOCIETIES, WHICH ARE NOT COOPERATIVE BANKS. IN THE PRESENT CAS E, RESPONDENT ASSESSEE IS ADMITTEDLY NOT A CREDIT COOPERATIVE BAN K BUT A CREDIT COOPERATIVE SOCIETY. EXCLUSION CLAUSE OF SUB SECTION (4) OF SECTION 80P, THEREFORE, WOULD NOT APPLY. IN THE RESULT, TAX APPEALS ARE DISMISSED. AFTER CONSIDERING THE AIMS AND OBJECTS OF THE ASSES SEE, IT IS HELD THAT ASSESSEE IS NOT A COOPERATIVE BANK IN TERMS OF BANKING REGULATIONS AC T. THE CASE LAWS RELIED UPON BY THE CIT (A) ARE NOT SQUARELY APPLICABLE ON THE CASE OF THE ASSESSEE. THEREFORE, WE REVERSE THE ORDER OF LD. CIT (A). ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE IT ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 17.07.2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 17/7/ 2015 DAS/ 13 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO WARD-1, SIKAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 999/JP/2011) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR 14 ITA NO. 999/JP/2011 A.Y. 2008-09 M/S. SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., SIKAR.