2015 (11) TMI 802

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.... to credit co-operative societies. 2. The substantial questions of law which are raised in the appeal are as under: (i) "Whether the Tribunal was correct in upholding the CIT(A)'s order directing the assessing officer to grant deduction under Section 80P(2)(a)(i) of the Act of Rs. 70,58,624/- for assessment year 2009- 10 by relying on the earlier order of ITAT on identical issue without appreciating that the revenue had not accepted the said order and an appeal under Section 260A is pending before this Hon'ble Court for adjudication? (ii) Whether the Tribunal is correct in holding that the assessee is not a Co-operative Bank but only a Co-operative society engaged in providing credit facilities to its members? (iii) Whether the ....

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....ing Regulation Act, 1949 and Co-operative Societies Act, 1959 Co-operative Societies Act, 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 orders, Gift cheques, lockers, bank guarantees etc. 3. Co-operative Banks can 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 l....

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....d business cannot be deducted in computing the total income of the assessee. The said income is liable for tax. A Co-operative bank as defined under the Banking Regulation Act includes the primary agricultural credit society or a primary co-operative agricultural rural development bank. The Legislature did not want to deny the said benefit to a primary agricultural credit society or a primary co- operative agricultural and rural development bank. They did not want to extend the said benefit to a co-operative bank which is exclusively carrying on banking business i.e., the purport of the amendment. If the assessee is not a Co-operative bank carrying on exclusively banking business and if it does not possess a license from the Reserve Bank of....