TaxTMI 
TaxTMI 
2020 (1) TMI 1378
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....rom the learned CIT(A) dated 06.09.2017 delivered to the appellant on 28th Sep 2017, once again the appeal was sent in electronic mode on 14th October 2017 5. The Rule 45. Form of appeal to Commissioner (Appeals), was substituted vide notification dated lst March 2016 and effective from 1st April 2016. 6. The substituted Rule 45 (2)(b) states that "(b) in a case where the assessee has the option to furnish the return of income in paper form, by furnishing the for electronically in accordance with clause (a) of Sub-rule (2) or in paper form." 7. The ITR form to be used and mode of filing the return is specified in Rule 12 (3) states that: "(3) The return of income referred to in sub-rule (1) may be furnished in any of the following manners, namely:- (i) furnishing the return in a paper form; (ii) furnishing the return electronically under digital signature (iii) transmitting the data in the return electronically and thereafter submitting the verification of the return in Farm ITR-V, (iv) furnishing a bar-coded return in a paper form: Provided that- [(a) a person, other than a company and a person required to furnish the return in Form ITR-7, if his or its total i....
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....operative credit society means a co-operative society, the primary object of which is to provide financial accommodation to its members and includes a co-operative land mortgage bank. It is clear from the above definition the society is not a bank and the provisions of the section 80P(4) are not applicable to this society. Further, The High Court of Karnataka, Dharwad Bench in the case of Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha, Bagalkot V/s. CIT (Appeal No. 5006/2013) has held that there is a distinction between Co operative society and Co-operative bank and held that deduction u/s. 80 P is allowable to the Co-operative Society. Ground - 2. The Actual Fact is the society has only one class of members i.e., Permanent members who have the power to participate in the election and voting, and Jo not have any nominal members. The fact was reiterated and the relevant details given in the Auditors Report regarding membership was produced before both the authorities. However they have chosen to ignore the facts and went on the assumptions that the bye laws do not prevent accepting deposit from public. Coming to a conclusion bused on assumptions disregarding the....
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.... notice that the provision is introduced with a view to encouraging and promoting growth of cooperative sector in the economic life of the country and in pursuance of the declared policy of the Government. The correct way of reading the different heads of exemption enumerated in the section would be to treat each as a separate and distinct head of exemption. Whenever a question arises as to whether any particular category of an income of a cooperative society is exempt from tax what has to be seen is whether income fell within any of the several heads of exemption. If it fell within any one head of exemption, it would be free from tax notwithstanding that the conditions of another head of exemption are not satisfied and such income is not free from tax under that head of exemption..." (iii) In the case of Commissioner of Income Tax v. Punjab State Co-operative Bank Ltd. (2008) 300 ITR 24 (Punjab & Haryana H.C.), while dealing with an identical issue, the High Court of Punjab and Haryana held as follows: "8. The provisions of section 80P were introduced with a view 5 (1998) 5 SCC 48 6 (2008) 300 ITR 24 (Punjab & Haryana H.C.) 18 to encouraging and promoting the growth of the co-....
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....ive bank', the appellant does not get covered thereby. It is also a matter of common knowledge that in order to do the business of a co-operative bank, it is imperative to have a licence front the Reserve Bank of India, which the appellant does not possess. Not only this, as noticed above, the Reserve Bank of India has itself clarified that the business of the appellant does not amount to that of a cooperative bank. The appellant, therefore, would not come within the mischief of sub-section (4) of Section 80P. Further it was held in the said Case on the facts that: (vii) So far so good. However, it is significant to point out that the main reason for disentitling the appellant from getting the deduction provided under Section 80P of the Act is not sub-section (4) thereof. What has been noticed by the Assessing Officer, after discussing in detail the activities of the appellant, is that the activities of the appellant are in violations of the provisions of the MACSA under which it is formed. If is pointed out by the Assessing Officer that the assessee is catering to two distinct categories of people. The first category is that of resident members or ordinary members. There m....
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....ction are the contributors towards surplus, however, there are no participators in the surpluses. There is no common consent of whatsoever for participators as their identity is not established. Hence, the assessee fails to satisfy the test of mutuality at the time of making the payments the number in referred as members may not be the member of the society as such the AOP body by the society is not covered by concept of mutuality at all." (ix) These are the findings of fact which have remained unshaken till the stage of the High Court. Once we keep the aforesaid aspects in mind, the conclusion is obvious, namely, the appellant cannot be treated as a co-operative society meant only for its members and providing credit facilities to its members. We are afraid such a society cannot claim the benefit of Section 80P of the Act. Ground - 3. The Learned CIT(A) once again erred in disallowing interest income earned by the society as an income under the head income from other sources. The Honourable court had held that interest earned on deposit of idle and surplus fund is taxable under the head income from other sources. But the actual facts in the instant case is that the inter....