TaxTMI 
TaxTMI 
2026 (10) TMI 187
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....Aiyar Padmanabhan COMMON JUDGMENT DR. ANITA SUMANTH, J. This batch of seven appeals relate to the Pandyan Grama Bank (Bank) for assessment years (AY) 2007 - 08 (two appeals), 2008 - 09, (two appeals), 2009 - 10, 2010 - 11 and 2011 - 12. 2. The assessee / respondent is a Regional Rural Bank (RRB) governed by the provisions of the Regional Rural Banks Act, 1976 (in short 'RRB Act'). The status of the assessee as being a RRB is not in dispute and the Department also has proceeded on the basis that it is an RRB both pre and post the proceedings under Section 263 of the Income-Tax Act, 1961 (in short, 'IT Act') for AY 2007 - 08, that was the genesis by which the issues under consideration arose. 3. We have heard Mr.Mahalingam, lea....
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....incipal object of which is to provide for long-term credit for agricultural and rural development activities. 6. The assessment for AY 2007 - 08 was completed originally on 19.03.2009, the assessing officer accepting the case of the assessee in relation to the deduction sought. 7. While so, the Commissioner of Income-Tax (in short 'CIT'), being of the view that the assessment was both erroneous and prejudicial to the interests of the Revenue, exercised powers of revision under Section 263 and directed the assessing officer to re-look into the deduction sought. The order under Section 263 was the subject matter of challenge before the Tribunal, which quashed the same. 8. An order consequential to the Section 263 order came to be pas....
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....g the order passed by the Commissioner of Income Tax under Section 263 of the Income Tax Act? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in quashing the order passed by the Commissioner of Income Tax under Section 264, even though the deduction under Section 80P(2)(a)(i) to the Co-operative Banks has been withdrawn by an amendment to insertion to sub-section (4) in Section 80P with effect from 1.4.2007 (Assessment year 2007-08) onwards is valid?" 13. The substantial question admitted in the other appeals relating to the claim of deduction under Section 80P is common across appeals, and reads as follows:- "Whether on the facts and in the circumstances of the case....
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....Pr.Commissioner of Income Tax, Ajmer v M/s. Bhilwara Zila Dugdh Utpadak Sahakari Sangh Ltd (DB Income Tax Appeal No.2/2019 dated13.08.2019) (iii) Commissioner of Income-tax v Jafari Momin Vikas Co-op Credit Society Ltd [(2014) 49 taxmann.com 571 (Gujarat)] (iv) Baroda Uttar Pradesh Gramin Bank v Deputy Commissioner of Income Tax, Sultanpur [(2018) 91 taxmann.com 182 (Allahabad - Trib)] (v) Assistant Commissioner of Income Tax, Circle, Bhilwara v Bhilwara Zila Dugdh Utpadak Sahakari Sangh Limited (ITA No.163/Jodh/2019 dated 11.09.2023) (vi) Vidarbha Konkan Gramin Bank v Income Tax Officer, Ward-1(5), Nagpur (ITA No.7/Nag./2019 dated 28.11.2024) (vii) Karnataka Vikas Grameena Bank v The Asst.Commis....
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....as below:- (ccv) "primary Co-operative Bank" means a co-operative society, other than a primary agricultural credit society- (1) the primary object or principal business of which is the transaction of banking business; (2) the paid-up share capital and reserves of which are less than one lakh of rupees; and (3) the bye-laws of which do not permit admission of any other co-operative society as a member: Provided that this sub-clause shall not apply to the admission of a Co-operative Bank as a member by reason of such Co-operative Bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose. (ccvi) "primary credit society"....
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....nal Rural Bank, and provide managerial and financial assistance to such Regional Rural Bank, as may be mutually agreed upon between the Sponsor Bank and the Regional Rural Bank. 22. The RRB Act goes on to deal in extenso with the method of incorporation, activities and other aspects germane to the functioning of an RRB and is hence a self-contained enactment governing all aspects of the functioning of an RRB. Section 22 of the RRB Act contains a fiction by virtue of which an RRB is deemed to be a co-operative society for the purposes of the Income-Tax Act, 1961. Section 22 reads as follows:- "Regional Rural bank to be deemed to be a co-operative society for purpose of the Income-tax Act, 1961. - For the purpose of the Income-tax....