2023 (1) TMI 526

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....ncome Tax Officer, Ward 3, Namakkal for the assessm ent year 2017-18 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the 'Act'), vide order dated 10.12.2019. 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in disallowing the claim of deduction u/s.80P(2)(a)(1) of the Act by holding that the associate members are not entitled to claim of deduction. For this, assessee has raised the following effective ground No.2:- "On the facts and circumstances of the case the appellant being Primary Agricultural Society is entitled to exemption u/s 80P(2)(a)(1) of the Income Tax Act which position has been settled by the decision of the Honourable Madras High Court in the case of PCIT....

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....(A) also confirmed the action of AO despite the fact that he has relied on the decision of Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd., & Ors. Vs. CIT, 123 Taxmann.com 161 (SC). Aggrieved, assessee came in appeal before the Tribunal. 4. We noted that this issue is squarely covered by the decision of Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd., supra wherein this Tribunal is consistently following the issue of regular members as well as associated members because the Tamil Nadu Co-operative Societies Act permits so. This issue has been c onsidered by this Tribunal in the case of ITO vs. The Tiruchengode Agricultural Producers Cooperative Marketing Society Ltd., in ITA Nos.2....

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....e of lending or investment of deposits of money from the public. Similarly, u/s.22(1)(b) of the Banking Regulation Act, as applicable to Co-operative Societies, no Co-operative Society shall carry on in banking business in India, unless it is a Co-operative Bank and holds license issued on this behalf by the Reserve Bank of India. In the present case also, there is no banking activity and it is not registered as a Bank and it does not hold any license issued by the Reserve Bank of India. The Assessee being a Primary Agriculture Credit Society is a Co-operative Society. The primary object of which is to provide financial accommodation to its members, i.e. members as well as Associate members for agriculture purposes or for purpose c....