TaxTMI 
TaxTMI 
2018 (10) TMI 1440
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....erative Societies Act 1969 is a Co-Operative Society as defined U/s.2(19) of the Income Tax Act 1961. 4. Therefore the appellant Society is evidently a primary Co-operative, Agricultural & Rural Development Bank as defined U/s.80(P)(4) of The Income Tax Act, providing credit facilities to its members for Agricultural And allied Rural Development activities and eligible for deductions provided in Section 80P of the Act. 5. The Appellant do not accept any deposits and the Loans are provided to the members out of the funds obtained from the Apex Co-operative Bank, namely the Kerala State Co-operative Agricultural & Rural Development Bank Ltd., Trivandrum. 6. The Appellant Society is eligible for deduction provided U/s. 80(P)(2)(a)(i) &(d) of the Income Tax Act, being a primary Co-operative Agricultural And Rural Development Bank described u/s.80(P) (4) (a) (b), providing credit facility to its members for Agricultural and Allied Rural Development Activities. 7. The Assessing Officer's interpretation of Section 80(P)(4)(b) relating to the expression therein, "A Society having its area of operation confined TO "A" TALUK and the principle object of....
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....s to its members for Agricultural and allied Rural Development activities and eligible for deduction provided in Section 80P of the Act. 3. The principal object of Appellant Society is to provide for long term credits for Agricultural and Rural Development activities to its members. 4. The area of operation of the Appellant is confined to the rural taluks of Meenachil and Kanjirappally. 5. The Assessing Officer's interpretation of Section 80(P)(4) relating to the expression therein, "A Society having its area of operation confined to a Taluk even if the principle object of which is to provide for long term credit for Agricultural and Rural Development activities" is disputed by the appellant as under:- The Assessing Officer has totally misunderstood the expression "CONFINED TO "A" TALUK" in Section 80(P)(4)(b) which does not indicate a singular number. 6. The Assessing Officer has denied the exemption to the Appellant relaying on the following cases mentioned in Para 15 and 16 of the Assessment Order which are totally out of context. (a) In Para 15 the Assessing Officer referred to the Hon'ble Appellate Tribunal Jaipur B....
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....n (4) of section 80P will not apply to an assessee which is not a co-operative bank. In the case clarified by CBDT, Delhi Coop Urban Thrift & Credit Society Ltd. was under consideration. Circular clarified that the said entity not being a Co-operative bank, section 80P (4) of the Act would not apply to it. In view of such clarification, we cannot entertain the Revenues contention that section 80P (4) would exclude not only the Co-operative banks other than those fulfilling the description contained therein but also credit societies, which are not Co-operative banks. In the present case, respondent assessee is admittedly not a credit Co-operative bank but a credit co-operative society. Exclusion clause of subsection (4) of section 80P, therefore would not apply. In the result thereof we hereby allow the appeal with the direction to the AO to give all the benefits to the assessee under 80P of the Act. (Para 3, Page 16) 10. ITA 41/COCH/2015 dated 24/05/2017 Page 8 Para 6.4 of Hon'ble Tribunal Cochin Bench In the case of Jugal Kishore Saraf Vs. Raw Cotton Co. Ltd. in AIR 1955 SC 376 at page 381 Justice S.R Das held thus: "The cardinal rule of con....
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....al issue has been considered by the Tribunal in case of M/s.Kottayam Cooperative Agricultural & Rural Development Bank Limited v. ITO (ITA No. 295/Coch/2018 order dated 17.10.2018), wherein the Tribunal held that the assessee was not entitled to the benefit of deduction u/s 80P(2) of the I.T.Act. The relevant finding of the Tribunal reads as follows:- "8. We have heard the rival submissions and perused the material on record. We find that an identical issue has been considered by the Tribunal in assessee's own case for the immediately assessment year 2010-2011 (ITA No.41/Coch/ 2015 - order dated 24.05.2017), wherein the Tribunal held that the assessee was not entitled to the benefit of deduction u/s 80P(2) of the I.T.Act. The relevant finding of the Tribunal reads as follows:- "6. We have heard the rival contentions and perused the material on record. The Assessing Officer had denied 80P deduction for the following two reasons, namely, i) Assessee's area of operation is not confined to a taluk. ii) Agricultural credit provided by the assessee-bank is very less compared to the normal banking activities. 6.1 The CIT(A) confirmed the disall....
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....tural and grammatical meaning. If, however, such a reading leads to absurdity and the words are susceptible of another meaning, the Court may adopt the same. But if no such alternative construction is possible, the court must adopt the ordinary rule of literal interpretation. In the present case, the literal construction leads to no apparent absurdity and therefore, there can be no compelling reason for departing from that golden rule of construction." 6.5 Keeping in mind the above principle of construction, the words "having its area of operation confined to a taluk" obtained in the Explanation (b) to sub-section (4) of Section 80P should be understood as 'limited to' or 'within bounds' of a taluk. The first letter of the English alphabet which precedes the word 'Taluk' is used "before nouns and noun phrases that denote a single, but unspecified, person or thing.......". [Webster's Dictionary] 'A' is used to mean or denote 'one'. A Taluk is a revenue division. Few villages constitute a taluk and few taluks constitute a District. 6.6 The mischief of sub-section (4) will not fall on a primary cooperative agricultural and rural development bank provided it's operati....