Since these two appeals involve common contentions, they are disposed of by common order for sake of convenience. 2. appellant is Saraswat Co-operative Bank Ltd. It carries on banking business with its registered office at Girgaum and branches at Dadar, Goregaon, Chembur, Juhu, Khetwadi, Ghatkopar and Sadashiv Cross Lane. These appeals relate to its income-tax assessments for assessment years 1980-81 and 1981-82. 3. For first year 1980-81, for which previous year ended on 30-6- 1979, appellant-bank filed its return of income declaring income of Rs. 2,780. ITO found that appellant-bank derived income from banking business, rent from house property and dividend income from shares. For first time, appellant claimed in course of assessment proceedings that rental income of Rs. 19,990 from house property would be exempt under section 80P(2)(c) of Income-tax Act, 1961 ('the Act'). ITO did not accept this claim, as he was of view that income from house property was not derived as result of any activity, as envisaged by section 80P(2)(c). He, accordingly, rejected assessee's claim for exemption of this income of Rs. 19,990 from tax. 4. In next year 1981-82, for previous year ended on 30-6-1980, appellant had declared total income of Rs. 2,780 in its return of income filed on 29-4-1981. It had claimed in return that income amounting to Rs. 34,05,417 was exempt from tax under section 80P(2)(a), (c) and (d). ITO observed that appellant derived income from banking business and other sources, that out of assessee's claim for exemption under section 80P(2), appellant was not entitled to exemption in respect of property income amounting to Rs. 20,949 under section 80P(2)(c) for reasons given in assessment order for earlier assessment year. He, accordingly, brought to charge said income. 5. appellant took up matter in appeal and contended that it was entitled to exemption under section 80P(2)(c) in respect of this income also, even though it was derived from house properties. It was contended before Commissioner (Appeals) that acquisition of properties and receipt of rental income therefrom by appellant should be considered as part of its business activities and that appellant would be entitled to deduction of Rs. 20,000. Reliance was placed on decision of Supreme Court in case of CIT v. Calcutta National Bank Ltd. [1959] 37 ITR 171. 6. Commissioner (Appeals) held that decision of Supreme Court, relied on by appellant, turned on provisions of Excess Profits Tax Act, 1940, wherein it was held that definition of 'business' under Excess Profits Tax Act was wider than definition under Income-tax Act. He pointed out that under section 80P(2)(e), income derived from renting of godowns or warehouses was exempted, that if intention was to grant exemption in respect of rental income from other properties, it could have been so specified and that it could not be said that appellant was engaged in any activity in respect of earning rental income from properties. In these circumstances, Commissioner (Appeals) held that section 80P(2)(c) (which is wrongly mentioned as (e) in Commissioner's order) did not appear to be applicable to appellant's case. He, therefore, confirmed both assessments and dismissed appeals. appellant feels aggrieved by these orders of Commissioner (Appeals) and has come up in appeal to Tribunal. 7. Shri D.Y. Pandit, learned counsel for appellant, submitted before us that appellant's claim for exemption in respect of property income in question in both years was based on main provisions contained in section 80P(2)(a)(i) itself, as appellant was co-operative society engaged in carrying on business of banking as specified in said provision of law. He next submitted that appellant's claim for exemption under section 80P(2)(c) was only by way of alternative claim. Shri Pandit placed before us copy of bye-laws of Saraswat Co-operative Bank Ltd., appellant herein, as also copies of statements disclosing particulars of property income filed under head 'Income from house property' for both assessment years along with appellant's returns of income. learned counsel pointed out that appellant owned six buildings in first year and eight buildings in second year, that all these buildings were acquired by appellant-bank mainly for purpose of carrying on its banking business and appellant-bank mainly for purpose of carrying on its banking business and that only in four of buildings, viz., those situated at Girgaum, Dadar, Juhu and Khetwadi, appellant-bank was deriving income from rent from tenants, who were in occupation of portions of these properties. According to learned counsel, these properties were let out to these tenants even prior to acquisition of these properties by appellant-bank, that these tenants continued to remain in properties even after acquisition of properties by Bank, since they were protected by Bombay Rent Control Act, and that rental income received by appellant-bank formed part and parcel of income of appellant in normal course of carrying on its banking business, even though said rental income had to be computed in accordance with provisions of Act under separate head for purposes of assessment. learned counsel further submitted that under section 70 of Maharashtra Co-operative Societies Act, 1960, co-operative society was to invest or deposit its funds in accordance with said provisions of law and that under rules 54 and 55 of Maharashtra Co-operative Societies Act, 1960, co-operative society can invest its reserve funds or other funds in any immovable property specified by Registrar by general or special order and that co-operative society was prohibited from investing in any immovable property without prior sanction of Registrar of Co-operative Societies. learned counsel also relied on clause 5(a) and (e)(xvi) of objects clause of its bye- laws, and pointed out that acquisition of all these properties had been made by appellant-bank in accordance with these provisions of its bye-laws and provisions of Maharashtra Co-operative Societies Act and Rules thereunder. learned counsel argued that in view of prohibition contained against co-operative society investing in any immovable property without prior sanction of Registrar, it would be clear that all these properties have been acquired by appellant-bank only for purpose of carrying on its banking business with such prior permission of Registrar of Co-operative Societies and that deriving of rental income from already existing tenants of these properties was only incidental to and part of banking business carried on by appellant-bank. Shri Pandit argued that under rule 54(1)(iv), co-operative society can invest in any immovable properties specified by Registrar by general or special order and that Explanation to rule 55(1) showed that any investment made by societies in immovable property with prior sanction of Registrar in buildings for its own use, was also considered as for purpose of business of co-operative society for that purposes of that sub-rule. Shri Pandit also placed before us copies of orders of Divisional Joint Registrar, Co-operative Societies, dated 11-9-1979 and 24-10-1979, granting sanction to appellant-bank to invest amount of Rs. 20 lakhs from its reserve fund for purchase of building at Navneet Bhavan, Girgaum, Bombay-4, as illustrative example in support of appellant's case. learned counsel, therefore, argued that rental income derived by appellant-bank formed part of business income of appellant-bank in normal course of carrying on its banking business, that fact that rental income from this property has to be computed under specific provisions contained in Income-tax Act would not alter or affect true nature and character of this income as business income of appellant-firm and that, therefore, appellant would be entitled to exemption under main provisions of section 80P(2). Alternatively, appellant would be entitled to exemption under section 80P(2)(c), as claimed before departmental authorities. In support of these submissions, Shri Pandit relied on following decisions---CIT v. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306 (SC), CIT v. Universal Radiators (P.) Ltd. [1981] 128 ITR 531 (Mad.), Shardlow India Ltd. v. CIT [1981] 128 ITR 571 (Mad.) and Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC). 8. Shri C.K. Vohra, learned departmental representative, placed before us copy of letter dated 2-5-1980 filed by appellant's counsel before ITO in course of assessment proceedings for assessment year 1980- 81 and submitted that appellant's claim for exemption has throughout been only under section 80P(2)(c) and that this was only point to be decided in present appeals. He argued that appellant's present claim for exemption under section 80P(2)(c) was entirely new case set up for first time before Tribunal and it was necessary for deciding this issue to know whether properties in question were acquired for purpose of banking business of appellant-bank, as claimed by it. Shri Vohra argued that there was no material before lower authorities to decide this issue and that, therefore, we should not allow appellant to take up this plea for first time before Tribunal. In support of his contentions, Shri Vohra relied on grounds of appeal filed by appellant before Commissioner (Appeals) in both years and also relied on decision of Supreme Court in Addl. CIT v. Gurjargravures (P.) Ltd. [1978] 111 ITR 1 to argue that appellant was precluded from taking up this plea. He also relied on findings of departmental authorities and contended that there was no material to presume that rental income received by assessee from its tenants formed part of banking business carried on by it and that appellant's claim for exemption under section 80P(2)(c) was also rightly rejected by departmental authorities. 9. assessee's learned counsel in his reply relied on decision of Supreme Court in CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710, and contended that appellant was entitled to put forward plea for exemption under different provision of law and that this was not new case that was being set up for first time. He further pleaded that no further facts were necessary to be gone into for purpose of deciding this claim of appellant in both years. 10. We have carefully considered submissions urged on both sides in light of materials and authorities relied on by learned counsel. 11. In our view, appellant is entitled to succeed on its main contention that it is entitled to exemption in respect of property income in question in both years under section 80P(2)(a)(i), as appellant co-operative society is engaged in carrying on business of banking as specified in said provision of law. We are unable to agree with revenue that appellant should not be allowed to raise this plea for first time before Tribunal. It will be seen that appellant had been claiming exemption in respect of property income before departmental authorities in both years, no doubt under section 80P(2)(c). At same time, appellant had also mentioned that it was banking company in co-operative sector, that during course of its business it had acquired buildings, that part of these buildings, which were not required for business, was let out on rental basis to tenants and that realisation of such rental income became source of business income to assessee. This would be clear from letter dated 2-5-1980 written by appellant's counsel, enclosing return for assessment year 1980-81. Thus, present claim of assessee is only for exemption not merely under section 80P(2)(c) but also under section 80P(2)(a)(i). decision of Supreme Court in case of Mahalakshmi Textile Mills Ltd. fully supports such contention being raised by assessee. At page 713 of report, their Lordships of Supreme Court have pointed out that there is nothing in Income-tax Act which restricts Tribunal to determination of questions raised before departmental authorities, that all questions whether of law or of fact which relate to assessment of assessee may be raised before Tribunal, that if for reasons recorded by departmental authorities in rejecting contention raised by assessee, grant of relief to him on another ground is justified, it would be open to departmental authorities and Tribunal, and indeed they would be under duty, to grant that relief and that right of assessee to relief is not restricted to plea raised by him. We are, therefore, unable to agree with objections of revenue to entertainment of this plea raised by assessee before us. 12. As name of assessee itself indicates, it is co-operative society carrying on business of banking. This position is also accepted by revenue, as could be seen from assessment orders for both years where it is specifically mentioned by ITO that appellant derives income from banking business. further question for our consideration is whether property income derived by assessee also forms part of its business income. Bye-law 5 of appellant-bank specifies objects of society, for which it is formed. Bye-law 5(a) reads as follows: " OBJECTS 5. objects of Society are: (a) To do banking business on co-operative principles by accepting for purpose of lending or investment, of deposits of money from members as well as public, repayable on demand or otherwise and, withdrawable by cheque, draft, order or otherwise." Bye-law 5(e)(xvi) is relevant for our purpose and it reads as follows: " 5(e). To engage in any one or more of following forms of business namely: (i) to (xv) ** ** ** (xvi) acquisition, construction, maintenance and alteration of any building or works necessary or convenient for purposes of society, with previous permission of Registrar; " learned counsel has also placed before us section 70 of Maharashtra Co-operative Societies Act, which provides for investment of funds by co-operative society. Section 70(e) enables co-operative society to invest its funds in any other mode permitted by rules or by general or special order of State Government. Rules 54 and 55 enable co-operative society to invest its funds in any immovable property specified by Registrar by general or special order. learned counsel has also placed before us copy of order, dated 11-9-1979, issued by Divisional Joint Registrar of Co-operative Societies, allowing appellant-bank to invest Rs. 20 lakhs from its reserve fund to purchase building at Navneet Bhavan at Girgaum. We are only referring to this just to show that there is substance in contentions of counsel for assessee that there are restrictions on appellant-bank in investing in immovable property except for purpose of carrying on its banking business with permission of Registrar of Co-operative Societies. Thus, it is clear from reading of bye-laws quoted above as well as order of Registrar of Co-operative Societies that acquisition of immovable properties by appellant-bank was only for purpose of appellant-bank carrying on its banking business. This would also be clear from statement of income filed along with returns for these two years. For example, break up of Rs. 2,85,241.76 shown as gross income from building in profit & loss account for year ended on 30-6-1979 shows that Rs. 1,12,726.88 represented rent notionally charged for premises used by bank for its own business in its head office and five branches. As against this, rental income received from tenants in four of properties at Girgaum, Dadar, Juhu and Khetwadi amounts to Rs. 37,892.28 only. balance of Rs. 1,34,622.60 represents interest on building fund investment. Thus, it will be clear that major portion of buildings acquired by appellant-bank is being utilised only for purposes of its banking business, viz., for location of its branches at various places or offices, as case may be. letting out of portion of some of these buildings in four places mentioned above is only incidental to carrying on of its banking business. In fact, learned counsel for appellant stated before us that these tenants were there even before these properties were acquired by appellant-bank and that, therefore, appellant had to continue these tenants who could not be evicted, since they were protected by Bombay Rent Control Act. We do not see any reason to disbelieve this statement made on behalf of appellant-bank. 13. It may be that for purposes of computing income from property, this rental income would be assessable under sections 22 and 23 of Act. But it does not mean that this income ceases to be business income of appellant-bank, since business of appellant is essentially banking and not that of builder or real estate owner who builds properties and lets them out on rent. As mentioned already, letting of property and receipt of rental income is incidental to carrying on of banking business by appellant co-operative society. 14. In Cocanada Radhaswami Bank Ltd.'s case, Supreme Court held that scheme of Income-tax Act is that income-tax is one tax, that section 6 of Indian Income-tax Act, 1922 ('the 1922 Act'), corresponding to section 14 o f 1961 Act, classifies taxable income under different heads for purposes of computation of net income of assessee and that though for purposes of computation of income, interest on securities is separately classified, income by way of interest from securities does not cease to be part of income from business if securities are part of trading assets. Their Lordships held that whether particular income is part of income from business falls to be decided not on basis of provisions of section 6 but on commercial principles. Their Lordships have explained their earlier decisions in United Commercial Bank Ltd. v. CIT [1957] 32 ITR 688 (SC) and East India Housing & Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 (SC) and applied ratio of their decision in CIT v. Chugandas & Co. [1965] 55 ITR 17 (SC). (SC). 15. In Bihar State Co-operative Bank Ltd. v. CIT [1960] 39 ITR 114, Supreme Court held that as appellant was bank and one of its objects was to carry on general business of banking, its normal business was to deal in money and credit and did not consist only of receiving deposits and lending money to its members or other societies. Their Lordships further held that it was normal mode of carrying on banking business to invest monies in such manner that they are readily available, that monies laid out in form of deposits did not cease to be part of appellant's circulating capital and that interest from deposits arose from business of bank and was exempt from income-tax under notifications and nothing turned on manner in which appellant chose to show this income in its return. Their Lordships further held that various heads under section 6 were mutually exclusive. 16. When we examine facts of present case, in light of two decisions of Supreme Court referred to above, it would be clear that investments made by appellant-bank in purchase of these properties was also part and parcel of its banking business as specified in bye-law (5)(e)(xvi) quoted above. Otherwise, appellant-bank is prohibited from investing its funds in immovable property as we have shown above with reference to provisions of Maharashtra Co-operative Societies Act and Rules made thereunder. It, therefore, follows that rental income derived by appellant- bank from portions of some of these buildings acquired by it for purpose of its banking business also forms part of its business income only though for purpose of computation of its total income under Act, said income has to be computed separately as income under head 'Income from house property' in accordance with sections 22 to 27. 17. We may, in this connection, also refer to provisions of Banking Regulation Act, 1949 (X of 1949). This Act is also made applicable to, co- operative banks as could be seen by insertion of section 56 in Part V of said Act by Banking Laws (Application to Co-operative Societies) Act (XXIII of 1965), with effect form 1-3-1966. Section 6 in Part II of this Act specifies forms of business, in which banking companies may engage. Section 6(1)(k) is relevant for our purpose and it reads as follows: " 6. Forms of business in which banking companies may engage. --- (1) In addition to business of banking, banking company may engage in any one or more of following forms of business, namely: (a) to (j) ** ** ** (k) acquisition, construction, maintenance and alteration of any building or works necessary or convenient for purposes of company; " It will be noticed that bye-law 5(e)(xvi) of appellant-bank substantially conforms to this provision of law in Banking Regulation Act also. It can hardly be disputed that appellant-bank is also subject to provisions of this Act in addition to Maharashtra Co-operative Societies Act, relied on by appellant's learned counsel. We, therefore, respectfully follow two decisions of Supreme Court referred to above and hold that bank is entitled to exemption in respect of its property income under section 80P(2)(a)(i). 18. Even alternative submission of appellant for exemption under section 80P(2)(c) has to be accepted. It cannot be disputed that income of Rs. 19,990 in 1980-81 and of Rs. 20,949 in 1981-82 is income attributable to such activities other than those specified in clause (a) or clause (b) of section 80P(2). learned counsel is right in his submission that words employed in section 80P(2)(c), viz., 'profits and gains attributable to such activities' are wider in their scope than 'income derived by co-operative society from letting of godowns or warehouses for storage', etc., in section 80P(2)(e), relied on by Commissioner (Appeals). This is now well settled by decision of Supreme Court in case of Cambay Electric Supply Industrial Co. Ltd.. two decisions of Madras High Court relied on by learned counsel for assessee in Universal Radiators (P.) Ltd.'s case and Shardlow India Ltd.'s case follow same principles laid down by Supreme Court in decision referred to above. We, therefore, hold that appellant would be entitled to exemption to extent allowed by section 80P(2)(c) also, if it is to be held that it is not entitled to exemption claimed by it under section 80P(2)(a)(i). 19. In result, appeals are allowed. *** SARASWAT CO-OPERATIVE BANK LTD. v. INCOME TAX OFFICER