TaxTMI 
TaxTMI 
2022 (6) TMI 908
X X X X Extracts X X X X
X X X X Extracts X X X X
....l is attributable to the Pandemic of Covid-19 and is covered by the decision of Hon'ble Supreme Court in its decision in suo moto Writ Petition (Civil) No.3/2020 dated 10.01.2022 had held that the period from 01.03.2020 to 28.02.2022 should be excluded while reckoning limitation period. Further, the Hon'ble Supreme Court has allowed 90 days from 01.03.2022 to file the belated appeals. Accordingly, the Counsel claimed that this appeal is filed within the time permitted by the Hon'ble Supreme Court and thus, prayed for its admission by condoning the delay. The assessee has put on record an Affidavit explaining the reasons for the delay. We have duly considered the contentions of the ld. Counsel and gone through the record. Accordingly, for the just decision of the controversy, we find it proper to condone the delay of 10 days which is related to Covid-19 pandemic and thus, admit it for adjudication. 4. Before us none appeared on behalf of the assessee and Department was represented by Mr. AR V Sreenivasan, Addl. CIT. 5. Ld. Sr. DR fairly submitted that the issue pertaining to claim of the assessee u/s. 80P(2)(a)(vi) of the Act is squarely covered in favour of the assessee in the ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the benefit for deduction claimed by the assessee and added it to the taxable income. Aggrieved, the assessee filed an appeal before the CIT(A). 3. The CIT(A) following the decisions of the Hon'ble High Court of Madras in the case of CIT Vs Salem District Printers Service Industrial Co-operative Society Ltd [2007] 290 ITR 371 and the Hon'ble High Court of Kerala in the case of CIT vs Palghat Food Corporation of India, Labour Contract Co-operative Society Ltd [2003] 266 ITR 315 held that the voting rights in elections have not been conferred on the NLC or its nominated persons as per Rule 22 of bye-laws of the assessee's society, hence, the provisions of section 80P(2)(a)(vi) are not violated by the assessee society and it is eligible for deduction. Aggrieved, the revenue filed this appeal, inter alia, with the following grounds: 2. The Commissioner of Income Tax (Appeals) erred in deleting the addition made on the ground that NLC is a member as per bye-laws of the society. If NLC has voting rights, assessee is not eligible for deduction u/s. 80P. If NLC has no voting rights, then it is eligible for the deduction u/s. 80P. 3. The Commissioner of Income Tax (Appeals) had f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of India, Labour Contract Co-operative Society Ltd [2003] 266 ITR 315 (Ker) and allowed the appeal. Hence, he pleaded that the revenue's appeal may be dismissed. 6. We have heard the rival submissions. The relevant portion of the order of the CIT(A) is extracted as under : 7.11 The Hon'ble High Court of Madras in the case of CIT v. Salem District Printers Service Industrial Co-Operative Society Ltd [2007J 290 ITR 371 has held with reference to the proviso to Section 80P of the Act that "Our reading of the proviso only shows that in respect of classes of members mentioned therein, the society should restrict the voting rights. The proviso does not mean that the society cannot have any other classes of members. In other words, classes of members enumerated in the proviso extracted above are only a few types of members that would have been admitted in the society and it does not mean no person not falling within the three classes enumerated in the proviso, could become member of the society". Following this decision of jurisdictional High Court, I hold that there is no bar for NLC being member of the assessee-Society and this is not sufficient to hold the society inelig....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bers, who are sympathisers, who have no right to work, also' (clause 5 of the bye-laws dealt with by the Assessing Officer in paragraphs 2 and 3 of the assessment order). Thus, going by the proviso mentioned above, the inhibition contained in the said proviso will apply. However, the case of the assessee is that the clause 5 of the bye laws, giving, voting right to the members who are sympathisers without any right to labour, is against the provisions of the Co-operative Societies Act, and the Rules framed thereunder, and that Rule 5 of the said Rules clearly provides that the bye-laws of the society shall not be contrary to the provisions of the Act. It is also the assessee's case that section 20 of the Act interdicts the conferment of any voting right to persons other than members (If the Society. Hence, we have to refer to the provisions of the Co-operative Societies Act and the Rules framed thereunder. Section 20 of the Act reads thus: "Votes of members.-Every member of a society shall have one vote in the affairs of the society: Provided that - (a) nominal or associate member shall not have the right to vote; (b) where the Movement is 11 member of the socie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be considered as confirming to the provisions of the TNCSA, 1983. Section 26 under the same chapter deals with "Votes of members' of the Society. Sub-section (4) of Section 26 clearly prohibits rights of nominee of Government, nominated members, etc to vote at elections. The bye-laws of the Society which has been elaborately discussed in. the 'preceding paragraphs clearly shown that they confirm to the provisions of the TNSCA, 1983. Chapter IV of (INCSA, 1983 deals with the Management of registered societies and conduct of general meetings comes under this chapter and expressly dealt in Section 32 of the Act. Thus; daily management of the Society, i.e. day-to-day affairs of the Society which.is managed by the Board elected under bye-laws of the society is distinct from the general body of the Society where the rights of nominated members to vote has been clearly restricted and therefore, the operation of proviso to sub-section (2) of Section 80P does not have any application in this case. As observed by the Kerala High Court, any deviation to the TNSCA, 1983 in the bye-laws would not have any effect and it would only render de-registration of the Society under the Act. The ....