TaxTMI 
TaxTMI 
2015 (10) TMI 1380
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....completing the assessment denied deduction under section 80P of the Act on the entire income of the assessees on the ground that the assessees did not fulfil the conditions of being primary agricultural co-operative societies extending credit facilities to its members. The Assessing Officer further held that the assessees are not banks eligible for deduction under section 80P(2) of the Act. However, the Assessing Officer restricted the deduction under section 80P to the income earned from farm sector out of banking business and to the income from the credit facilities extended to its members. The Assessing Officer also denied the claim of the assessees that the entire income is exempt from taxation under the principles of mutuality. On appe....
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....2014] 3 ITR (Trib)-OL 246 (Chennai). Counsel also relied on the decision of this Tribunal in the case of S-1145 Perarignar Anna Primary Agricultural Co-operative Credit Society v. ITO in I. T. A. Nos.402 to 417/Mds/2014 dated May 8, 2014 in support of his contentions. This Tribunal in the case of S-6608 Narasingapuram PACB Ltd. v. ITO in I. T. A. No. 919/Mds/2013 dated May 23, 2014 [2014] 3 ITR (Trib)-OL 246 (Chennai) considered a similar issue and held that definition of member as per section 2(16) of the Societies Act under which assessees are registered, the term "member" includes "associate member" and reference to class "B" members by the appellate authority is with respect to associate member. Therefore, credit facilities provided ....
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....hich includes associate member. The learned authorised representative further submitted that the case of the assessees is squarely covered by the decision of the co-ordinate Bench of the Tribunal in I. T. A. No. 292/Mds/2014 in the case of SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd. v. ITO decided on March 17, 2014. In the said case, the Tribunal has held that for availing of deduction under section 80P, classification of members in 'A' and 'B' is irrelevant. The learned authorised representative also placed on record a copy of the order of the Tribunal in I. T. A. No.197/Mds/2013 in the case of ITO v. Veerakeralam Primary Agricultural Co-operative Credit Society decided on February 11, 2....
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....nbsp; "Member means a person joining in the application for the registration of society and a person admitted to membership after registration in accordance with the provisions of this Act, the rules and bylaws and includes an associate member.' A perusal of definition of the term 'member' clearly shows that 'member' includes 'associate member'. The reference of class 'B' members by the Commissioner of Income-tax (Appeals) is with respect to associate members. The Commissioner of Income-tax (Appeals) has denied deduction to the assessees only for the reason, that credit facilities have been extended to a particular class of members, who are not normal mem....
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....tutory recognition as per the Act. The net result is that once the "nominal" members or non-voting members are themselves included in the definition of "members", they satisfy the relevant condition imposed by the Legislature under section 80P(2)(a)(i). We make it clear that we are dealing with a deduction provision to be interpreted liberally. In our considered opinion, the objections of the Revenue that the "members" defined in sub-clause (i) of section 80P(2)(a) should only include voting members would amount to a classification within classification which is beyond the purview of tax statute ; unless provided specifically by the Legislature. Moreover, we find that the case law of the hon'ble Punjab and Haryana High Court also suppor....