TaxTMI 
TaxTMI 
2020 (12) TMI 666
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....aid Act, Co-operative Societies are not being registered, the Assessee should not be allowed the benefit of deduction u/s.80P(2)(a)(i) of the Act. According to the AO, 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 amended provisions of Karnataka Souharda Sahakari Act,1997 as amended by Act 13/2004. Similarly, under the Karnataka Co-operative Societies Act, 1959 'Co-operative' has been defined according to which the co-operative means a co-operative registered under the Karnataka Souharda Sahakari Act, 1997. The AO has made reference to the fact that under the Karnataka Souharda Sahakari Act, 1997 the word cooperative has been defined in clause 2(e) according to which co-operative means a Co-operative including a co-operative bank doing the business of banking registered or deemed to be registered under section 5 and which has the word Souharda Sahakari in its name. In Souharda Sahakari Act, the word co-operative society has also been defined in clause 2(g), according to which the co-operative society means a co-operative society registered under the Karnat....
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....19) defines co-operative societies for the purpose of the Act and the same is as follows: "Definitions. 2. In this Act, unless the context otherwise requires,- (19) "co-operative society" means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies ;" 7. As can be seen from the aforesaid definition of Co-operative society under the Act, any co-operative society registered under any other law of any State for registration of co-operative society is also regarded as co-operative society under the Act. Souharda's also operate on the principle of co-operation and adopt the principles of co-operation. Co-operative Societies and Co-opertives are all founded on the principle of co-operation. 8. Since the beginning of mankind the concept of 'co-operation' has been the foundation for harmonious existence In India, the Cooperative Societies Act 1912 regulated formation, management, winding up and other supervision by the Government etc. This Act became the model for the provincial governments to form their own cooperative acts. Post-Indepen....
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....d 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 matters connected therewith; WHEREAS it is expedient to provide for recognition encouragement and voluntary formation of co-operatives 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 for matters connected therewith; BE it enacted by the Karnataka State Legislature in the Forty-eighth Year of Republic of India as follows:- " 10. The Souharda Cooperatives enjoy functional autonomy in design and implementation of their Business plans, customer service activities, etc based on the needs of their members. Unlike other forms of cooperatives in India, the interference of State / Central in day-to-day operations of Souharda Cooperatives is almost minimal. 11. The above discussion would show that souharda co-operatives are also one form of co-operative societies registered under a law in force in the State of Karnataka for registration of co-operative societies. Therefore the c....
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....r of the CIT(A) is set aside and matter is restored to the AO for adjudication of the impugned issue in terms indicated above." 8. Thus the issue whether a 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 raised for the first time before the Tribunal and hence the tribunal remanded the issue for fresh consideration by the AO. There was therefore no view taken by the tribunal that Souharda's are not entitled to claim benefit of deduction u/s.80P of the Act. 9. He pointed out that the tribunal has in the order which is subject matter of this MP specifically observed in paragraph-5 as follows: "5. I have heard the rival submissions. The learned counsel for the Assessee submitted that Souharda sahakari registered under the Karnataka Sauharda Sahakari Act, 1997 are also co-operative societies within the meaning of Sec.2(19) of the Act and therefore the revenue authorities were not justified 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 Co-operative Socie....
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.... the Act, what can be rectified is only a mistake that is apparent on the face of the record. The expression "mistake apparent on the face of the record" will not include a mistake which can be identified only by a difficult process of long drawn reasoning. The tribunal does not have powers to review its order u/s.254(2) of the Act. I am of the view that the present MP is devoid of any merit as what the Revenue seeks through this MP u/s.254(2) of the Act is only a review of the order of the Tribunal. As to whether the decision in the case of Udaya Souhardha Credit Co-operative society Ltd. (supra) has only remanded the issue to the AO for fresh consideration or has laid down the law on the issue is a debatable issue. Such debatable issues cannot be subject matter of an MP u/s.254(2) of the Act. 14. I am of the view that the decision of the Tribunal in the case of Udaya Souhardha Credit Co-operative Society Ltd. (supra) does not lay out any law that a souharda registered under the Karnataka Souharda Sahakari Act, 1997 cannot be regarded as co-operative society entitled to benefit of deduction u/s.80P(2)(a)(i) of the Act. The Tribunal in the said order has only remanded the issue to....