TaxTMI 
TaxTMI 
2020 (3) TMI 45
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts members and Godown rent earned by the appellant under the facts and in the circumstances of the appellant's case. 3. The learned CIT[A] ought to have appreciated that the appellant is a primary Agricultural credit co-op. society and hence the provisions of Sec. 80P[4] was not applicable under the facts and in the circumstances of the appellant's case. 4. The learned CIT[A] erred in holding that the business of providing credit facilities to the members carried on by the appellant cannot be regarded as a business carried on by a co-operative society complying with the principles of mutuality since the appellant had admitted nominal members, who could neither vote nor were entitled to a share in the profits as per the bye-laws of the appellant and hence, the appellant was not entitled to deduction u/s. 80P[2][a][i] of the Act having regard to the rationale behind the judgement of the Hon'ble Supreme Court in the case of Citizens Co-operative Society reported in 397 ITR 1 [SC] under the facts and in the circumstances of the appellant's case. 5. The learned CIT[A] ought to have appreciated that the appellant co-operative society had no doub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k for waiver of the interest levied, the appellant denies itself liable to be charged to interest under Section 234B and 234C of the Income Tax Act, which levy, under the facts and in the circumstances of the appellant's case, deserves to be cancelled. 11. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs." 3. Briefly stated the facts of the case are that the assessee is an Agricultural Co-operative Society, registered under the Karnataka Co-operative Societies Act, 1959. The assessee filed its return of income for the assessment year 2016-2017 declaring total income of Rs. 8,23,810 after claiming deduction u/s 80P of the Act at Rs. 1,06,78,048. The return of income was selected for scrutiny through CASS. The Assessing Officer noticed that the principles of mutuality were violated by the assessee-society and therefore denied the deduction in view of the Hon'ble Supreme Court judgment in the case of M/s.Citizen Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the facts discussed above. Regarding the argument of ld. DR of revenue that the earlier Tribunal order rendered by the Division Bench of the Tribunal in the case of M/s. Udaya Souharda Credit Cooperative Society Ltd. (supra) should be followed in preference to the later decision of SMC bench of the Tribunal rendered in the case of Siddartha Pattina Souharda Sahakari Niyamitha Vs. ITO (supra), I find that in this later case, the SMC bench of the Tribunal has duly considered the earlier decision of the Division Bench of the Tribunal rendered in the case of M/s. Udaya Souharda Credit Co-operative Society (supra) and it is also noted that ld. CIT(A) and AO in that case has examined the whole issue in the light of Karnataka Souharda Sahakari Act, 1997. Because of this reason, it was held by the SMC bench of the Tribunal that issue has to be decided by the Tribunal and it cannot be remanded to the AO as was canvassed by the Revenue and hence, this argument has not merit that even now, the matter should be restored back to the AO for fresh decision although the SMC bench of the Tribunal has decided the issue. Regarding the judgment of Hon'ble Allahabad High Court rendered in the case o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tified in denying the benefit of deduction to the Assessee. The learned DR relied on a decision of the ITAT Bangalore Bench in the case of M/s. Millennium Credit Cooperative Society Ltd. Vs. ITO ITA Nos. 2606 & 2607/Bang/2017 in which the Tribunal followed the decision of ITAT Bangalore Bench in the case of M/s. Udaya Souharda Credit Co-operative Society Ltd. ITA No.2831/Bang/2017 order dated 17.8.2018 in which the issue whether souharda registered under the Karnataka Souharda Sahakari Act, 1997 can be regarded as co-operative society entitled to benefit of deduction u/s.80P(2)(a)(i) of the Act was remanded to the AO for fresh consideration. We are of the view that in the present case, the AO and CIT(A) have already considered this issue in the light of the Karnataka Souharda Sahakari Act, 1997 and therefore this issue has to be decided by me and cannot be remanded to the AO as was canvassed by the Revenue. 6. I have considered the rival submissions. Sec.2(19) defines cooperative societies for the purpose of the Actand the same is as follows: "Definitions. 2. In this Act, unless the context otherwise requires,- (19) "cooperative society" means a co-operative society regist....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aprakash as its head & with a task of drafting a 'Model Cooperative Act' which will prevent interference of the governments. This committee, after a detailed study of the Cooperative Acts of various states, drafted a 'Model Cooperative Act' in 1991 and Central Government recommended the state governments to adopt this. Accordingly, in 1997 a bill on parallel cooperative act was tabled in the state legislature of Karnataka. Demanding an early approval of this bill by both the houses of Karnataka Legislature, a committee 'Souharda Samvardhana Samithi' under the chairmanship of Justice Rama Jois came into existence. It was due to the combined efforts of Sahakara Bharathi Karnataka and Souharda Samvardhana Samithi, "The Karnataka Souharda Sahakari Act-1997 (KSSA, 1997)" was passed in the legislature. With the consent of The President of India, it was enforced from January 2001. Preamble to the Act reads thus:- "An Act to provide for recognition, encouragement and voluntary formation of Cooperatives based on self-help, mutual aid, wholly owned, managed and controlled by members as accountable, competitive, self-reliant and economic enterprises guided by cooperative principles and matter....