TaxTMI 
TaxTMI 
2018 (12) TMI 758
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....eties as envisaged under Section 80P of the Act. In coming to this finding the Assessing Officer submitted that the decision of the Hon'ble Karnataka High Court in the case of Billuru Gurubasava Pattina Sahakari Sangha Niyamitha (2014) 369 ITR 86 (Kar) relied on by the assessee has not been accepted by the Department and further appeal has been filed before the Hon'ble Apex Court which is pending. 2.2 Aggrieved by the order of assessment dated 23.12.2016 for Assessment Year 2014-15, the assessee filed an appeal before the CIT (Appeals). The CIT (Appeals) partly allowed the assessee's appeal vide the impugned order dt.22.01.2018 for Assessment Year 2014-15. While disposing the aforesaid appeal, the learned CIT (Appeals), inter alia, allowed the assessee's claim for deduction u/s 80P of the Act and deleted the disallowance made by the Assessing Officer (AO) in this regard following the judgment of the Hon'ble Karnataka High Court in the case of CIT Vs. Billuru Gurubasava Pattina Sahakari Sangha Niyamitha (supra). 3. Aggrieved by the order of the CIT (Appeals), Gulbarga dt.22.1.2018 for Assessment Year 2014-15, Revenue has preferred this appeal before the Tribunal wh....
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....kari Act, 1997 and under the said Act, Cooperative Societies are not being registered. The learned Departmental Representative contends that in view of the above, the assessee has wrongly represented itself as a co-operative society for claiming deduction under Section 80P of the Act; since the deduction there under is allowed only to co-operative societies and not to co-operatives registered under the Karnataka Souharda Sahakari Act, 1997. The learned DR further contended that Co-operative and Co-operative Societies are 2 different entities. If the co-operative wants to convert itself into a Co-operative society, it has to be converted as per the Amending Act 13/2004 which provides conversion of Co-operative under the Karnataka Souharda Act, 1997 into Co-operative Society. In the Cooperative Society Act, the Co-operative has also been defined according to which the co-operative means a co-operative registered under the Karnataka Souharda Sahakari Act, 1997 (Karnataka Act 17 of 2000) and includes union co-operative and the federal co-operatives. The learned DR further invited our attention to the Karnataka Souharda Sahakari Act also in which the co-operative word has been defined i....
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....n the light of judgment of the Apex Court in the case of Citizen Co-operative Society Ltd., Vs. ACIT (supra), wherein it was held that where the assessee being a cooperative society advances loan to members of general public without any approval from the Registrar of Societies, the activity of the Co-operative Society is in violation of co-operative societies Act and the co-operative credit society was not entitled to deduction under section 80P(2)(i)(a) of the Act. 8. Now, during the course of hearing of the appeals, the learned DR has raised a few valid points which cannot be outrightly ignored. The learned DR has specifically raised an issue that assessee is only a co-operative registered under the Karnataka State Souharda Sahakari Act. Since the assessee is not a co-operative society, it is not entitled/eligible for deduction under section 80P(2) of the Act. Though this argument was raised first time before the Tribunal at this stage, but when it is a legal argument and goes to the root of the case, it cannot be outrightly ignored. Therefore, we have to examine the argument raised by the learned DR in this regard. Under section 80P, the deduction is to be allowed only ....
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....tioned therein, is a Co-operative registered or deemed to be registered under this Act. (2) Notwithstanding anything contained in the Karnataka Co-operative Societies Act, 1959, when a certificate of registration is issued to a Co-operative after conversion of a Cooperative society into a Co-operative, the registration of such Co-operative society under the Karnataka Co-operative Societies Act, 1959, shall be cancelled by the Registrar with effect from the date of issue of certificate of registration under this Act." 11. Similarly, if the co-operatives intend to convert into co-operative societies, conversion is also possible as per Amending Act 13/2004. In the co-operative societies Act, the word cooperative societies and the Co-operatives has also been defined under section 2(c) and 2 (d)(2), according to which co-operative society means a society registered or deemed to be registered under the co-operative societies Act and the co-operative means co-operative registered under the Karnataka Souharda Sahakari Act, 1997. Therefore, from careful reading of both the sections, it is abundantly clear that the co-operative and the co-operative societies are 2 different....