TaxTMI 
TaxTMI 
2024 (5) TMI 54
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....ders dated 22.03.2023 and 21.03.2023 respectively. The same raising common issues, were heard together, and are being disposed of per a common order. 2. The background facts of the case leading to the instant appeals, in brief, are that the assessee, a cooperative society in existence since 1961, and registered under the Kerala Cooperative Societies Act, 1969 (Kerala Act) as a primary agricultural credit society (PACS), returned it's income for the relevant years at nil, claiming deduction u/s. 80P of the Act on the entirety of it's profits and gains from business. 3. The issue arising in the appeals is the denial of deduction u/s. 80P of the Act, claimed u/s. 80P(1) r/w s. 80P(2)(a)(i). The basis for the said denial is that even as the a....
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.... of the said area restrictions be regarded as in banking business, with it further being not licensed by RBI. The Revenue reiterated it's case. 5. We have heard the parties, and perused the material on record. 5.1 The Assessing Officer (AO) has, on a perusal of the bye-laws, given a clear finding at para 12 of his order (for AY 2013-14) that the assessee is authorized thereby to accept deposits from members as well as non-members. This has not been disputed by the assessee at any stage. Acceptance of deposits from members and non-members implies deposits from public at large. The area restriction, on which the assessee relies, is applicable only for it's members, while it can admittedly, both accept as well as lend to non-members as well.....
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....rom (s. 80P(2)(a)(i)). It being not a PACS would thus not carry the Revenue's case far. Firstly, for the reason that exemption u/s. 80P(1) r/w s. 80P(2)(a)(i) is, as afore-noted, equally applicable to income derived from the business of banking, even as that from credit to members is not confined to that for agricultural purposes only. Two, inasmuch as the tax statutes are to be strictly construed (Banarsi Debi v. ITO [1964] 53 ITR 100 (SC); Ajmera Housing Corp. v. CIT [2010] 326 ITR 642 (SC)), the term 'cooperative bank' is it be, for the purpose of s. 80P(4), excluding cooperative banks from the benefit of s. 80P, strictly construed, i.e., as defined therein. The said definition would have to be satisfied strictly in terms of the said pro....
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....sessee being, or not being, a primary cooperative bank and, thus, a cooperative bank for the purposes of s. 80P of the Act. Copy of the byelaws is not on record. Even the two pages (in English) thereof, forming part of the paper-book, to which Shri Narayanan would refer during hearing, are not by an authorized translator for us to place reliance thereon; the original, as explained, being in vernacular. The matter, accordingly, is restored to the file of the AO to examine if the assessee falls under the definition of a 'cooperative bank' under BRA, construed strictly, which definition stands adopted for the purpose of s. 80P(4) of the Act, i.e., whether as a primary cooperative bank or district/state cooperative bank. We make it clear that t....