TaxTMI 
TaxTMI 
2015 (8) TMI 1034
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..... The Revenue has raised the following common grounds in all the impugned assessment years. "1. The order of the learned Commissioner of Income-tax (Appeals) is erroneous in law and in the facts and circumstances of the case in allowing the assessee's appeal. 2. The learned Commissioner of Income-tax (Appeals) ought to have upheld the disallowance made under section 80P(4) as the above provision does not apply to a co-operative bank other than a Primary Co-operative Agricultural and Rural Development Bank or Primary Agricultural Society. 3. The learned Commissioner of Income-tax (Appeals)-VI has erred in treating the assessee as a co-operative society rather than a co-operative society (sic) as the assessee is carrying out banking acti vities." 3. Briefly stated, the assessee is a co-operative society registered under the Andhra Pradesh Mutually Aided Co-operative Societies Act (APMACS Act) with membership consisting of all criminal court employees of twin cities and other towns. It collects interests from its members on loans provided and receives interests from banks/societies where it has placed fixed deposits. In the impugned assessment years, ....
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....ociety cannot 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 the Reserve Bank of India. 4. Society are bound by rules as specified by in the Co-operative Societies Act. Filing of returns Co-operative banks have to submit annual return to Reserve Bank of India every year. Society has to submit the annual return to Registrar of Societies. Inspection Reserve Bank of India has the power to inspect accounts and overall functioning of the bank. Registrar has the power to inspect accounts and overall functioning of the bank. Part V Part V of the Banking Regulation Act is applicable to co-operative banks. Part V of the Banking Regulation Act is not applicable to co-operative banks. 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. 5.5 Examined on these touchstones, I find that : (a) The assessee is registered under the Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995, vide registration c....
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.... Assessing Officer has not considered that issue at all in the order. Therefore, the assessee being a co-operative society registered under the Andhra Pradesh Mutually Aided Co-operative Societies Act is eligible for deduction under section 80P(2)(a)(i) of the Act. Not only that, the assessee is also eligible for deduction under section 80P(2)(d) on the incomes received from other eligible co-operative societies/banks. Therefore, on the facts of the case, we do not see any reason to disallow the deduction under section 80P. The Revenue has raised the grounds that the provisions under section 80P(4) were applicable to the assessee. We do not see any reason to consider this ground as the restrictions brought out subsequently under section 80P(4) is applicable in the case of a co-operative bank not a co-operative society. This issue is also discussed in the co-ordinate Bench at Hyderabad decision in the case of Asst. CIT v. Advocates Mutually Aided Co-operative Society Hyderabad" pronounced on 20-02-2015, as under : "22.1. Ground No. 3 regarding deduction under section 80P(2)(d) is in respect of interest received from co-operative societies and the co- operative banks. We are....
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....nd officers should act responsibly while preferring the second appeal on the orders of the senior officer like the learned Commissioner of Income-tax (Appeals). The Revenue's appeal is dismissed." 5. In view of the above, we do not see any merit in the Revenue's grounds. Accordingly, the Revenue's appeals are dismissed. Assessment year 2010-11 6. In the assessment year, the Assessing Officer had passed little detailed order holding that the assessee has violated the Andhra Pradesh Co-operative Societies Act, 1964, therefore not eligible for deduction. The Assessing Officer however, allowed the deduction under section 80P(2)(d) of an amount of Rs. 51,45,018. The learned Commissioner of Income-tax (Appeals) following the predecessor's order in earlier years, however, elaborately discussed the issue and reworked out the deduction under section 80P(2)(a)(i) as well as 80P(2)(d). The order of the learned Commissioner of Income-tax (Appeals) in paragraph Nos. 5.3 to paragraph 8 is as under : "5.3 Perused the observations of the Assessing Officer and the submissions of the appellant. As could be seen from the facts of the case, the appellant-society is Mu....
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.... under section 80P(2)(d). As per the appellant, the Assessing Officer has allowed the deduction under section 80P(2)(d) to Rs. 51,45,018 as against the claim of Rs. 1,72,46,463 made under section 80P(2)(a)(i) of the Income-tax Act, whereby a separate ground of appeal was raised by the appellant relating to the claim. However, this claim stand revised, on account of reconsidering the facts to the case in the background of claim of deduction under section 80P(2)(a)(i), with the support of judicial decisions. 6.1 As per the appellant, the eligible deduction under section 80P(2)(d) has been quantified at Rs. 7,03,784, which has been worked out as under : Rs. 1. Total interest receipts 1,26,84,283 2. Interest receipts from Co.op Societies 13,42,472 3. Income from other sources (Total profits - profits from business) i.e., Rs. 2,32,63,447- Rs. 1,66,13,779 66,49,668 Interest from Co.op. Societies x Income from other sources Total interest receipts 13,42,472 x 66,49,668 = 7,03,784 1,26,84,283 Based on the facts of the case, the quantification of the deduction under section 80P(2)(d) in this case is jus....