TaxTMI 
TaxTMI 
1997 (11) TMI 72
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.... Act, 1974 (Central Act 45 of 1974), came into force with effect from September 23, 1974. In all the writ petitions, the Income-tax Officer issued a notice either calling upon the petitioner-society to furnish certain information and details of interest-tax return if any filed by the respective societies for the assessment years 1992-93 and 1993-94, such as the date of furnishing the said return and copy of the computation statement and other details. A few of the writ petitions have been filed challenging the said notice calling upon the petitioner-society to furnish details. In a few of the writ petitions, the Income-tax Officer proposed to assess the interest for the period from October 1, 1991, to March 31, 1992 (assessment year 1992-93) and called upon the petitioner to file a return within 30 days from the date of service of notice. In some other writ petitions, the Assessing Officer issued a notice to the writ petitioner to the effect that he had reason to believe that chargeable interest assessable under the provisions of the Interest-tax Act, 1974, for the assessment year 1992-93 has escaped assessment within the meaning of section 10 of the Interest-tax Act, 1974, a....
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....g on business of banking or providing credit facilities to farmers or village artisans, are liable to pay interest-tax in terms of the provisions of the Interest-tax Act and the action taken by the respondent is well within the authority. Learned senior counsel further contended that the petitioner in each of the writ petitions had come before this court against a notice calling upon them to furnish particulars or calling upon them to file returns and that the respondent is competent to decide the question and statutory appeal is provided for in terms of the provisions of the Interest-tax Act, and that the writ petitions are premature and they are not maintainable. Learned senior counsel further contended that the action taken by the respondent is not barred. This court is not going to decide the individual cases or the liability of the petitioner-society in these writ petitions and this court has to confine itself only to the common issues. In terms of sub-section (2) of section 4 which is the charging section in respect of credit institutions other than scheduled banks, interest-tax shall be charged on every credit institution for every assessment year. Sub-section (2) of s....
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.... Regulation Act, 1949, had not been made applicable and they are not banks. But the specific portion, namely, the second limb of the section has to be given its meaning, which would definitely mean that a co-operative society engaged in or carrying on the business of banking, falls within the definition of credit institution. The attempt on the part of learned counsel for the petitioners to read the second limb of the definition section, as if it is subject to the first limb of the provision, cannot be appreciated and it cannot be sustained. The terms contained in the definition section with respect to co-operative society has to be given full textual meaning and it has got a special significance and meaning. It is also to be pointed out that certain varieties of co-operative societies, which provide credit facilities to farmers or to village artisans, have been excluded from the definition of credit institution. This court is definite that a co-operative society which undertakes the business of banking, such as lending money to its members or accepting deposits or raising loans from the financial or banking institutions and advancing the same to its members, is definitely engaged ....
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....f section 10, the respondent would take action within 4 years of the end of that assessment year. In the present case, four years have not elapsed and immediately after the issue of notice, the petitioners in all the writ petitions, have rushed to this court and obtained an order of stay of all further proceedings. Thus, prima facie this court is of the view that the action taken by the respondent by issue of notice either calling for particulars or filing of returns or for details or a notice under section 10, is not barred by limitation. Incidentally, it has been contended that accepting deposits or raising loans from the financial bank and advancing the same to the members of the society, would not amount to the petitioner-society carrying on the business of banking. Such a contention cannot be accepted. Accepting for the purpose of lending or investment of deposits of money from the public repayable on demand or otherwise, is definitely banking business. In Addl. CIT v. U. P. Co-operative Cane Union [1978] 114 ITR 70 (All), the Division Bench of the Allahabad High Court had occasion to consider an activity of a co-operative society with reference to the exemption of its i....