AI Drafter 
TaxTMI 
TaxTMI 
2016 (4) TMI 1123
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.... for the year under consideration on 7.8.2009. The return was processed u/s. 143(3) of the Act and the AO assessed the total income as returned by the assessee without making any addition. The ld. CIT, however, exercising his powers u/s. 263 of the Act observed that the assessee had claimed deduction u/s. 80P of the Act. He observed that as per the amendments introduced vide Finance Act, 2006 w.e.f. 1.4.2007, as per sub-section 4 to Sec. 80P, deduction u/s. 80P is not available to the assessee society not being an agricultural co-operative society. He show caused the assessee in this respect. In reply, the assessee submitted that the assessee society was a co-operative credit society and not a co-operative bank, and thus was entitled to ded....
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....e findings of the CIT. 5. We have considered the rival contentions. The controversy in this case revolves around the provisions of Sec. 80P(4) of the Act which read as under : "80P(4) The provisions of this section shall not apply in relation to any co-operative bank other than primary agricultural credit society or a primary co-operative agricultural and rural development bank." 6. The ld. AR has further invited our attention to the objects of the society which reads as under : "1. To encourage and promote habit of thrift, self-help and co-operation among the members. 2. To accept deposit from members. 3. To provide credit facilities to its members. 4. To manage and protect properties of t....
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....of the Tribunal dated 28.03.2014 (supra) is relevant:- "4. Having heard both the sides and perused the material on record, it is pertinent to mention that the only issue arising out of both the appeals relate to the allowability of the exemption/deduction claimed by the assessee u/s 80P of the Income Tax Act. The allowability of exemption of the said income depends on whether the assessee/cooperative credit society is a co-operative bank or not for the purposes of section 80P(4) of the Act since according to the said provision, deduction under section 80P shall not be available to any co-operative bank other than primary agricultural society or primary co-operative agricultural and rural development bank. 4.1 It is the cas....
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....nly. 4.3 Moreover, for commencing a banking business by the co-operative society, due license has to be obtained from the Reserve Bank of India and in the assessee's case, there is no such license obtained for commencing any banking business. The mere fact that the assessee has been providing credit facilities to its members and thereby earns interest and dividend cannot make the 'society' into a 'bank' for the purposes of section 80P(4) of the Act. If the intention of the legislature was not to grant deduction to cooperative societies carrying on the business of providing credit facilities to its members, then this section would have been deleted. This proposition is supported by various decisions including the decis....
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....ety. Co-operative Banks are classified as Co-operative Bank. 3 Co-operative Credit Societies can accept deposits and advance loans only to the members. Hence the business activities are restricted to members and hence it can be termed as a mutual association/self help group. Co-operative Banks can accept deposits from public. However, unlike Co-operative credit societies they can advance loans to the members only. 4 Co-operative Credit Societies cannot accept deposits from public. Co-operative can accept deposits from public. 5 The provisions of Banking Regulation Act 1949 are not applicable to the Co-operative Credit Societies. The provisions of Banking Regulation Act 1949 are applicable to the Co-operative Ba....
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....he Hon'ble Bombay High Court in the case of the CIT Vs. Pruthvi Brokers and Shareholders P. Ltd. [(2012) 349 ITR 336 (Bom)] has held that the appellate authorities have the power to consider the claim not made in return of income. The Hon'ble Bombay High Court while deciding so, has considered the judgment of the Hon'ble Apex Court in the case of Goetze India Ltd. (supra). In view of that matter, the Ld.CIT(A) giving relief to the assessee at the appellate stage on the claim of deduction not made in the return of income is justified. 4.6 Considering the entire facts and position of law, we are of the considered opinion that the Ld.CIT(A) is justified in directing the AO to allow the deduction claimed by the assessee u/s....