2023 (8) TMI 34

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.... taken up as a lead case. ITA No.1239/Mum./2023 Assessee's Appeal - A.Y. 2013-14 3. In this appeal, the assessee has raised the following grounds:- "1. In the facts and the circumstance of the case and in law, the Commissioner of Income-Tax (Appeals), NFAC (hereinafter referred to as the 'the CIT(A)') has grossly erred in dismissing the appeal of the Appellant Society vide order dated February 15, 2023. 2. The CIT(A) has grossly erred in not appreciating the explanation offered by the Appellant Society and denying the deduction claimed u/s. 80P of the Act and thereby confirming addition of Rs. 87,80,140 made by the Assessing Officer in the assessment order. 3. The CIT(A) grossly erred in disallowing Rs. 87,80,140 u/s. 80P of the Act where in fact the claim of the Appellant Society under the said section was only Rs. 87,25,521 and thereby doubly taxing the income of Rs. 54,620. 4. In the facts, circumstances and merits of the case and in law, such order deserves to be quashed. 5. In the facts and circumstances of the case, the CIT(A) has misdirected himself in upholding the disallowance of deduction made by the Assessing ....

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....e corporation. The assessee further submitted that vide scrutiny assessment for the assessment year 2009-10 under section 143(3), the deduction claimed under section 80P(2)(a) of the Act was allowed as claimed in the return. Further, for the assessment year 2010-11, the learned CIT(A) has allowed the claim of deduction under section 80P(2)(a) of the Act. It was also submitted that the provisions of section 80P(4) of the Act brought into the statute are applicable only to Co-operative Banks and not to credit co-operative societies. The Assessing Officer ("AO") vide order dated 21/10/2015 passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that provisions of section 80P(4) of the Act are clearly applicable to the assessee and it is not necessary that the word „bank' is attached to the name. Accordingly, the AO disallowed the deduction claimed under section 80P of the Act. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee. Being aggrieved, the assessee is in appeal before us. 6. During the hearing, the learned Authorised Representative ("learned AR") submitted that this issue is covered in favour....

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....duction u/s 80P of the Act. However, according to the Ld. AR, the issue is no longer res-integra since in assessee's own case for AY. 2010-11, this Tribunal in ITA. No.6903/Mum/2013 for AY 2010-11 dated 29.01.2016 was pleased to uphold the action of the Ld. CIT(A) allowing similar claim of deduction u/s 80P of the Act by holding as under: - "2. This appeal filed by the Revenue on 28.11.2013 is against the order of the CIT (A)-33, Mumbai dated 2.9.2013 for the assessment year 2010-2011. 3. In this appeal, the only issue raised by the Revenue relates to the allowability of relief u/s 80P of the Act in respect of the income of the assessee when the assessee is a credit cooperative society". In the assessment, AO treated the same as a "credit cooperative bank". During the first appellate proceedings, CIT (A) examined the facts relevant to the definition of credit cooperative society" as well as the applicable citations and came to the conclusion that the assessee is not a bank" and therefore, the provisions of section 80P(4) will not apply to the assessee-credit cooperative society. The contents of paras 6 and 7 of the CIT (A)'s order are relevant in this rega....

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....e banking activities as the same are transacted between the cooperative society and the members of the society. Since, no public is involved the definition of banking" does not cover such activities. As such, there is no Reserve Bank of India"s approval for conducting such banking activities in this case. He also relied on the definition of "banking" and read out from the contents of section 5 of the Banking Regulation Act, 1949 and the same reads as under:- Sec. 5(b) "banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, or otherwise; 7. From the above, Ld Counsel for the assessee demonstrated that the members of the Credit Cooperative Society do not constitute "public" and there is no depositing, withdrawal by cheque or draft etc. After considering the said judgment of the Hon'ble jurisdictional High Court in the case of Quepem Urban Cooprative Credit Society (supra), we are of the opinion that decision of the CIT (A) is fair and reasonable and it does not call for any interference. Accordingly, issue raised in the Revenue"s appeal is di....

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....itled to exemption under Section 80(P)(2) of the Income Tax Act, 1961. Ms. Aakansha Kaul, learned counsel appearing on behalf of the appellant/Revenue has tried to submit that the respondent/Assessee will fall under the definition of Co- operative Bank as their activity is to give credit/loan. However, it is required to be noted that merely giving credit to its members only cannot be said to be the Co-operative Banks/Banks under the Banking Regulation Act. The banking activities under the Banking Regulation Act are altogether different activities. There is a vast difference between the credit societies giving credit to their own members only and the Banks providing banking services including the credit to the public at large also. There are concurrent findings recorded by CITA, ITAT and the High Court that the respondent/Assessee cannot be termed as Banks/Cooperative Banks and that being a credit society, they are entitled to exemption under Section 80(P)(2) of the Income Tax Act. Such finding of fact is not required to be interfered with by this Court in exercise of powers under Article 136 of the Constitution of India. Even otherwise, on merits also and taking i....

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....i-judicial authority and therefore is required to deal with each and every submission made before it and more particularly is duty bound to consider the judicial precedent rendered in assessee's own case on a similar issue. However, as is evident from the impugned order, the learned CIT(A) neither considered nor distinguished the binding precedent rendered in assessee's own case. 11. We find that the issue arising in the present appeal is recurring in nature and has been decided in favour of the assessee in the preceding assessment years. The Revenue could not show us any reason to deviate from the aforesaid decision rendered in assessee's own case and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following the orders passed by the Co-ordinate Bench of the Tribunal in assessee's own case cited supra, we are of the considered view that the assessee is entitled to claim deduction under section 80P(2) of the Act. Accordingly, the grounds no. 2-6 raised in assessee's appeal are allowed. 12. Ground no. 1 is general in nature and therefore needs no separate adjudication. 13. Ground no. 7 pertaining to the levy of interest under sectio....