TaxTMI 
TaxTMI 
2022 (11) TMI 1528
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....issioner of Income Tax (Appeals) Order of the Tribunal ITA 1 2012-13; 11.03.2015 ITA No.K08/CIT(A)/KTM/2015- 16/172 dated 31.05.2016 ITA No.340/Coch/2 016 DATED 26.05.2017 68/2017 2 2012-13; 11.03.2015 ITA No.K8/CIT(A)/KTM/2015- 16/172 dated 31.05.2016 ITA No.340/Coch/2 016 dated 26.05.2017 01/2018 3 2013-14; 29.03.2016 Order dated 31.01.2018 ITA No.152/Coch/2 018 dated 29.08.2018 63/2019 4 2014-15; 23.12.2016 Order dated 31.01.2018 ITA No.153/Coch/2 018 dated 29.08.2018 196/2019 5 2015-16; 08.12.2017 Order dated 09.07.2018 ITA No.433/Coch/2 018 dated 17.01.2019 219/2019 The questions for consideration are identical. Therefore, the appeals are disposed of by this common judgment. ITA No.68/2017 has been treated as the lead case by the counsel appearing for the parties. ITA 68/2017 4. The assessee is a multi-state Co-operative Society registered under Section 7 of the Mult-State Co-operative Societies Act, 2002 (for short, 'MSCS Act'). The assessee extended its operation to the States of Kerala and Tamil Nadu. The assessee, on 20.09.2012, filed the return of income for the assessment year 2012- 13. The assessee claimed a deduction under Section 8....
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.... the Banking Regulation Act with which alone section 80P of the IT Act is concerned? 2. Whether on the facts and circumstances of the case and in law, Tribunal is justified in holding that the interest from surplus fund is "Income from business" and not as "Income from other sources"?" 8. Adv. A Kumar raises the preliminary objections on the maintainability and continuation of the appeal by the Revenue. He relies on Circular No.3/2018, read with an amendment dated 20.08.2018 and argues that the monetary limit supported by the Circular is attracted to the appeal and the appeals are to be dismissed. 9. Adv. Navneeth N. Nath refers to the following judgments in ITA No.211/2019: (1) Commissioner of Income Tax v. Surya Herbal Ltd. "Liberty is given to the Department to move the High Court pointing out that the Circular dated February 9, 2011, should not be applied ipso facto, particularly, when the matter has a cascading effect. There are cases under the Income-tax Act, 1961, in which a common principle may be involved in subsequent group of matters or a large number of matters. In our view, in such cases if attention of the High Court is drawn, the High Court will not apply ....
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....ding of the assessee under the MSCS Act and the applicability of Section 80P to a Society registered under the MSCS Act. The question is perennial and arises in cases where an assessee takes registration under the MSCS Act. There is no direct judgment on the point, and therefore, the case on hand comes under one exception or the other stated by the Supreme Court in the citation relied on by him. Thus, the question and status of the assessee are decided. Once the status is decided, the assessee could be entitled only to such deductions or allowances to which the assessee is entitled under the Act. 9.1 To bring home his argument, he explains by an illustration that, given the operation of various Circulars issued by the CBDT in the subsequent years to the subject assessment year as well for one available reason or not, the assessee would continue to avail the benefit of Section 80P(2) of the Act. Assuming that the Commissioner accepts the view of the assessee both on the standing of the assessee and eligible deductions available on this behalf, in that particular year, if the monetary limit is less than One crore, the remedies of appeal before the Tribunal and in this Court are prec....
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....s"; Therefore, the assessee-Society is not a society registered under the Co-operative Societies Act 1912 or under any other law for the time being in force in any State for the registration of Co-operative societies. The assessee is registered under MSCS Act. The said society cannot be given the benefit from Section 80P of the Act. The Supreme Court in Mavilayi Service Co-operative Bank Ltd v. Commissioner of Income Tax (2021) 431 ITR 1 (SC) was considering either Primary Agricultural Co-operative Societies or Co-operative Societies registered under the Kerala Cooperative Society Act, 1969 but not a society registered under the MSCS Act. Even going by the principle laid down by the Supreme Court in Mavilayi Service Co-operative Bank Ltd, the assessee is not entitled to the benefit under Section 80P of the Act. It is stated there is no binding precedent on the question urged by the Revenue, and from a plain reading of Section 2(19) and 80P of the Act, the assessee is a society registered under MSCS Act, is beyond the scope of Section 80P. He prays for answering the questions in favour of the Revenue and against the assessee. In such favourable consideration by this Cou....
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.... of a multi-State cooperative society and includes a person admitted to membership. after such registration in accordance with the provisions of this Act, the rules and the byelaws; Section 2(m): Nominal or associate member defined under; "nominal or associate member" means a member who possesses only such privileges and rights of a member and who is subject only to such liabilities of a member as may be specified in the bye-laws; Section 26: deals with Nominal or associate member; A multi-State co-operative society may, if provided in its bye-laws, admit a person as nominal or associate member: Provided that no such nominal or associate member shall be entitled to subscribe the shares of such society or have any interest in the management thereof including right to vote, elect as a director of the board or participate in the general body meetings Section 16 deals with persons who may become members Section 25 deals with persons who may become members Cooperative principle is defined under section 2(eccc) Cooperative principle is defined under Section 3(g) ● Both - Co-operative societies registered under the State Act and Multi State Cooperat....
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....ally Aided Cooperative Societies Act, 1995 with Registration No. AMC/RR/DCO/9714 by the Registrar of Mutually Aided Cooperative Societies, Ranga Reddy. As operations of the assessee over the years had increased manifold and as its operations were spread over States of the erstwhile Andhra Pradesh, Maharashtra and Karnataka, the assessee got registered under the MultiState Cooperative Societies Act, 2002 in terms of the certificate dated 26-7-2005 issued by Office of Central Registrar of Cooperative Societies, Krishi Bhawan, New Delhi. *** **** *** 18. We may mention at the outset that there cannot be any dispute to the proposition that Section 80-P of the Act is a benevolent provision which is enacted by Parliament in order to encourage and promote growth of cooperative sector in the economic life of the country. It was done pursuant to the declared policy of the Government. Therefore, such a provision has to be read liberally, reasonably and in favour of the assessee (see Bajaj Tempo Ltd. v. CIT [(1992) 3 SCC 78]). It is also trite that such a provision has to be construed as to effectuate the object of the legislature and not to defeat it (see CIT v. Mahindra and Mahindra L....
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....ent was answered in favour of the assessee. The following propositions may be culled out from the judgment: (I) That Section 80P of the IT Act is a benevolent provision, which was Parliament enacted order to encourage and promote the growth of the co-operative sector generally in the economic life of the country and must, therefore, be read liberally and in favour of the assessee; (II) That once the assessee is entitled to avail of deduction, the entire amount of profits and gains of business that are attributable to any one or more activities mentioned in subsection (2) of Section 80P must be given by way of deduction; (III) That this Court in Kerala State Cooperative Marketing Federation Ltd. and Ors. (supra) has construed Section 80P widely and liberally, holding that if a society were to avail of several heads of deduction, and if it fell within any one head of deduction, it would be free from tax notwithstanding that the conditions of another head of deduction are not satisfied; (IV) This is for the reason that when the legislature wanted to restrict the deduction to a particular type of co-operative society, such as is evident from Section 80P(2)(b) qua milk coope....