TaxTMI 
TaxTMI 
2023 (4) TMI 184
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Order of the Assessing Officer is against law, facts and circumstances of the case. 2. The CIT [A] erred in upholding the view of the Assessing Officer that though the appellant is a co-operative society, it is not eligible for deduction under section 80P of the Income Tax Act, 1961 by wrongly interpreting Explanation (b) to subsection( 4) of section SOP of the Act. 3. The CIT [A] erred in upholding the view of the Assessing Officer that the interest earned by the appellant from investment in District Co-operative Bank is INCOME FROM OTHER SOURCES and not INCOME FROM BUSINESS OR PROFESSION, thereby denying exemption available to your appellant under section 80P of the Act. 4. The CIT[A] erred in holding that sin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....leted without giving proper opportunity to your appellant. The appellant sought an adjournment on 21-07-2022 upto 06-08-2022, which was not considered by the CIT NFAC, and dismissed the appeal on 25-07-2022. In view of this, the order of the CIT NFAC is invalid. 10. Any other grounds that may be adduced at the time of hearing may also be considered." 3. The assessee is a Co-operative Bank engaged in the business of banking activity and also providing credit facilities to its members. The assessee filed the return of income on 02.10.2018 declaring NIL income after claiming deduction u/s.80P of the Income Tax Act (the Act) for an amount of Rs.1,09,67,207. The AO held that the assessee cannot be treated as a primary agricultural co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Tribunal held as under:- "7. The only other ground in ITA No.140/Coch/2018 is with regard to the issue whether interest earned on investment with sub- treasuries and Banks was eligible for deduction u/s 80P(2)(a)(i) of the I.T. Act. 7.1 We have heard the rival submissions and perused the material on record. The Tribunal had decided the issue in favour of the assessee in assessee's own case in in ITA No.525/Coch/2014 (order dated 20.7.2016) concerning the assessment year 2009-10. In view of the above order of the Tribunal in assessee's own case, we hold that the CIT(A) is justified in directing the Assessing Officer to grant deduction in respect of interest income earned on investment in subtreasuries and bank deposits ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t, 2006, which is in the nature of a proviso to the aforesaid provision, it is made clear that such a deduction shall not be admissible to a cooperative bank. However, if it is a primary agricultural credit society or a primary cooperative agricultural and rural development bank, the deduction would still be provided. Thus, cooperative banks are now specifically excluded from the ambit of Section 80-P. 23. If one has to go by the aforesaid definition of "cooperative 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 cooperative bank, it is imperative to have a licence from Reserve Bank of India, which the appellant does not possess. Not only this, as noti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....80P(2)(a)(i); (V) That section 80P(4) is in the nature of a proviso to the main provision contained in section 80P(1) and (2). This proviso specifically excludes only co-operative banks, which are co-operative societies who must possess a licence from the RBI to do banking business. Given the fact that the assessee in that case was not so licenced, the assessee would not fall within the mischief of section 80P(4). (para 21) Ratio decidendi of Citizen Cooperative Society Ltd. (supra), must be given effect to. Section 80P, 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 o....