TaxTMI 
TaxTMI 
2020 (2) TMI 155
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....ct, 1997" inasmuch as they also operate and adopt the principle of cooperation as required under the Act. (c) He misdirected himself in not following the decision of the jurisdictional ITAT in case of Siddartha Patina Souharda Sahakari Niyamitha (ITA No.1234/ Bang/2019) and failed to appreciate that the said decision was given after considering all other decisions on the subject and it currently hold the filed on the eligibility of Souhardas for claiming benefit under section 80P of the Income Tax Act." 2. Briefly stated the facts of the case are that the assessee is a Souharda Co-operative registered under The Karnataka Souharda Sahakari Act, 1997 and provides credit facilities to its members. The assessment order u/s 143(3) of the I.T.Act for assessment year 2016-2017 was passed on 17.12.2018 raising a demand of Rs. 23,45,495 with total addition of Rs. 54,18,036. The assessee has claimed deduction u/s 80P of the I.T.Act, which was disallowed by the Assessing Officer by observing as under:- "4.1 The AO during the course of scrutiny proceedings has observed that he claimed a deduction ofRs. 54,lB,036/- u/s 80P(2).According to the AO, the benefit of deduction u/s.80P(2)(a)(i) ....
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....nuary, 2020, wherein the following question was considered by the Hon'ble High Court of Karnataka :- "Whether an entity registered under the Karnataka Souharda Sahakari Act, 1997 fits into the definition of "co-operative society" as enacted by sec. 2(19) of the Income Tax Act, 1961 for the purpose of section 80P thereof?" 4.1 The Hon'ble High Court answered the above question as follows:- "5. Having heard the learned counsel for the parties and having perused the petition papers, this Court is of a considered' opinion that the answer to the above question needs to be in the affirmative for the following reasons: (a) sec.80P of the I.T. Act provides for deduction in respect of income of Co-operative Societies is obvious going by its' very text; sub-section (1) of said section reads as under: "80P. (1) Where, in the case of an assessee being a 'cooperative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2) in computing the total income of the assessee." The other provisions of this section being not of....
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....led position of constitutional jurisprudence vide UJAGAR PRINTS, ETC. vs. UNION OF INDIA, AIR 1989 SC 516; Chapter X of 1997 Act containing sec.67 enacts important co-operative principles that animate and brood through almost all the provisions of this Act; (d) the Karnataka Souharda Sahakari Bill, 1997 has the following as the Statement of Objects & Reasons: «1. the recognition, encouragement and voluntary formation of co-operatives based on self help, mutual aid, wholly owned, manaqed and controlled by members as accountable, competitive, self-reliant and economic enterprises guided by co-operative principles specified therein; 2. removing all kinds of restrictions that have come to clog the free-functioninq of the co-operatives and the controls and interference by the Government except registration and cancellation; 3. promotion of subsidiary orqanization, partnership between co-operatives and also collaboration between co-operatives and other institutions; 4. registration of' co-operatives, union co-operatives and Federal Co-operative in furtherance of the objectives specified above; 5. Conversion of co-operative societies registered under the Karnataka Co....
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....dly needs to be stated that in both these definitions the word (co-operative' is employed not as an adjective but as a noun; the definition of other relative concepts in. the dictionary clauses of these Acts strengthens this view: this apart, sec.7 of the 1997 Act provides that the entity registered as a 'co-operative' shall be a body corporate, notwithstanding the conspicuous absence of the word 'society' as a postfix; sec.9 of the 1959 Act makes the entity once registered u/s.8 thereof a body corporate; both the entities have perpetual succession by operation of law; thus on registration be it under the 1959 Act or the 1997 Act, a legal personality is donned by them, so that inter alia they can own and possess the property; (f) the employment of the word "Sahakari" in the very title of the 1997 Act is also not sans any significance; Kannada which means 'co-operation'; as already mentioned above both the 1959 Act and the 1997 Act employ this terminology; the 1997 Act is woven with the principles of co-operation; sec.4 of this Act bars registration of an entity unless its main objects are to serve the interest of the members in the area of co-operation....