TaxTMI 
TaxTMI 
2021 (4) TMI 1242
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....ty registered under the Karnataka Co-operative Societies Act, 1959. The assessee filed its return of income for the Assessment Year 2015-16 on 28.10.2015 declaring a total income of Rs. Nil. The case was selected for scrutiny and Notice under section 143(2) dated 28.07.2016 was issued and served on the assessee on 05.08.2016. Subsequently notices under section 142(1) have been issued calling for various details. In response to the notices issued, the assessee filed the details called for. After verification of the details, the assessment is concluded by accepting the total income returned by the assessee. 3. Learned AR contended that Principal CIT erred in not allowing deduction under section 80P(2)(a)(i) of the Act AO. Learned DR submit....
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.... the IT Act, being a benevolent provision enacted by Parliament to encourage and promote the credit of the co-operative sector in general must be read liberally and reasonably, and if there is ambiguity, in favour of the assessee. A deduction that is given without any reference to any restriction or limitation cannot be restricted or limited by implication, as is sought to be done by the Revenue in the present case by adding the word "agriculture" into Section 80P(2)(a)(i) when it is not there. Further, section 80P(4) is to be read as a proviso, which proviso now specifically excludes cooperative banks which are co-operative societies engaged in banking business i.e. engaged in lending money to members of the public, which have a licence in....
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....ction 80-P(2)(a)(i) of the Act in the light of the definition of that expression as contained in Section 2(n) of the Cooperative Societies Act. The said provision reads as under: "2. (n) 'Member' means a person who joined in the application for registration of a society or a person admitted to membership after such registration in accordance with the provisions of this Act, the rules and the bye-laws for the time being in force but a reference to`members' anywhere in this Act in connection with the possession or exercise of any right or power or the existence or discharge of any liability or duty shall not include reference to any class of members who by reason of the provisions of this Act do not possess such right or ....
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....s in the light of this judgment." 5. In view of the above, we are inclined to remit this issue to the file of AO to examine the deduction under section 80P(2)(a)(i) of the Act in the light of the decision of the Hon'ble Supreme Court. 6. In the result, appeal of the assessee is allowed for statistical purposes. Pronounced in the open court on the date mentioned on the caption page. ============= Document 1 1. In the facts and circumstances of the case, whether the Prl. C.I.T. was right in law in re- opening the concluded assessment of the Appellant and annuling the same holding it to be erroneous and prejudicial to the interest of the Revenue and directing the Assessing Officer for making fresh assessment of income of....
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.... the appellant is attributable to its business income and exempt u/s. 80P (2) (a) (i) of the Act as held by the Hon'ble High Court of Karnataka in ITA 307/2014 - Tumkur Merchants Souharda Credit Co-op. Ltd. Vs. I.T.O. Tumkur and the orders of Hon'ble High Court of Judicature at Hyderabad in W.P. No. 12727 and 12767/2016 - The Vavveru Co-op. Rural Bank Ltd. and Anr. Vs. The Chief C.I.T. and anr. involving identical issue. The appellant disputes the finding of the Respondent in the closing para of Para 6 of his impugned order that for the interst income to be exempt on the basis of Tumkur Merchants Souharda case law, the assessee need to do the business of banking going by the phrasology contained in Para 10 - Page 12 ....