ITA No 53 to 55/C/2016 IN INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/SHRI B P JAIN, AM & GEORGE GEORGE K, JM ITA Nos 53 to 55/Coch/2016 (Asst Years 2008-09;09-10 & 11-12 ) Vadakara Coop Rural Bank Ltd Vs Income Tax Officer VO Road, Ward 2(2), Kozhikoe Vadakara PO Kozhikode ( Appellant) (Respondent) PAN No. AAAAT6785E Assessee By Sh V S Narayanan Revenue By Sh Dhanaraj, Sr DR Date of Hearing 15th Sept 2016 Date of pronouncement 15TH Sept 2016 ORDER PER BENCH: These appeals, at instance of assessee, are directed against separate orders; all dated 27th Nov 2015 of CIT passed u/s 263 of I T Act. relevant assessment years are 2008-09, 2009-10 and 2011-12. 2 assessments for assessment years 2008-09, 2009-10 and 2011-12 was set aside by Commissioner by invoking his powers u/s 263 of I T Act. According to Commissioner, AO had wrongly allowed claim of deduction u/s 80P of Act. CIT was of view that though, assessee is registered as primary agricultural credit society under Kerala Cooperative 1 ITA No 53 to 55/C/2016 Societies Act, 1969, majority of loans which had been disbursed was for non agricultural purposes; and hence, was not entitled to benefit of deduction u/s 80P of Act. With above said reasoning, CIT passed order u/s 263 of Act by setting aside assessments for relevant assessment years and directed AO to make fresh assessment. 3 Aggrieved, assessee is in appeal before us. 4 None appeared on behalf of assessee. However, we proceed to disposed of matter after hearing ld DR. 5 We have heard ld DR and perused material on record. Admittedly, in this case, assessee is cooperative society registered as primary agricultural credit society under Kerala Cooperative Societies Act 1969. Hon ble jurisdictional High Court in case of Chirakkal Service Cooperative Bank Ltd & others reported in 384 ITR 490 has held that primary agricultural credit society registered under Kerala Cooperative Societies Act, 1969 is entitled to benefit of deduction u/s 80P(2). Hon ble High Court was considering following substantial question of law: a) Whether on facts and in circumstances of case under consideration, Tribunal is correct in law in deciding against assessee, issue regarding entitlement for exemption under section 80P, ignoring fact that assessee is primary agricultural credit society? 2 ITA No 53 to 55/C/2016 5.1 In considering above question of law, Hon ble High Court rendered following findings: 15. Appellants in these different appeals are indisputably societies registered under Kerala co-operative societies Act, 1969, for sort, KCS Act and bye-laws of each of them, as made available to this court as part of paper books, clearly show that they have been classified as primary agricultural credit societies by competent authority under provisions of that Act. parliament, having defined term 'co-operative society' for purposes of BR Act with reference to, among other things, registration of society under any State law relating to co-operative societies for time being; it cannot but be taken that purpose of societies so registered under State Law and its objects have to be understood as those which have been approved by competent authority under such State law. This, we visualise as due reciprocative legislative exercise by Parliament recognising predominance of decisions rendered under relevant State Law. In this view of matter, all appellants having been classified as primary agricultural credit societies by competent authority under KCS Act, it has necessarily to be held that principal object of such societies is to undertake agricultural credit activities and to provide loans and advances for agricultural purposes, rate 'of interest on such loans and advances to be at rate fixed by Registrar of co-operative societies under KCS Act and having its area of operation confined to village, panchayat or municipality. This is consequence of definition clause in section 2(oaa) of KCS Act. authorities under IT Act cannot probe into any issue or such matter relating to such applicants. 16. position of 1aw being as above with reference to statutory provisions, appellants had shown to authorities and Tribunal that they are primary agricultural credit societies in terms of clause (cciv) of section 5 of BR Act, having regard to primary object or principal business of each of appellants. It is also clear from materials on record that bye-laws of each of appellants do . not permit admission of any other co-operative society as member, except may be, in accordance with proviso to sub-clause 2 of section 5(cciv) of BR Act. different orders of Tribunal which are impeached in these appeals do not contain any finding of fact to effect that bye- 1aws of any of 3 ITA No 53 to 55/C/2016 appellant or its classification by competent authority under KCS Act lS anything different from what we have stated herein above. For this reason, it cannot but be held that appellants are entitled to exemption from provisions of section 80P of IT Act by virtue of sub- section 4 of that sect; on. In this view of matter, appeals succeed. 17. In light of aforesaid, we answer substantia1 question 'A' in favour of appellants and hold that Tribunal erred in law in deciding issue regarding entitlement of exemption under section 80P against appellants. We hold that primary agricultural credit societies, registered as such under KCS Act; and classified so, under that Act, including appellants are entitled to such exemption. 5.2 Societies Act and bye-laws are placed on record. It is clear from perusal of same that assessee is primary agricultural credit society and providing agricultural credit facilities to its members. Hon ble Jurisdictional High Court, in above cited judgment has held that such societies are entitled to benefit of deduction u/s 80P(2) of Act. In view of above findings of Hon ble Jurisdictional High Court (supra), we allow appeal of the. It is ordered accordingly. 6 In result, appeals filed by assessee are allowed. Order pronounced in open Court on this 15th day of Sept 2016. Sd/- Sd/- (B P JAIN) (GEORGE GEORGE K ) Accountant Member Judicial Member Cochin: Dated 15th Sept 2016 Raj* 4 ITA No 53 to 55/C/2016 Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT, 5. DR 6. Guard File By order Assistant Registrar ITAT, COCHIN 5 Vadakara Coop Rural Bank Ltd v. Income-tax Officer Ward 2(2), Kozhikoe