M/s Puthiyangadi Service C-oop Bank Ltd. v. The Income-tax Officer, Ward-1(2), Kozhikode
[Citation -2016-LL-0926-100]

Citation 2016-LL-0926-100
Appellant Name M/s Puthiyangadi Service C-oop Bank Ltd.
Respondent Name The Income-tax Officer, Ward-1(2), Kozhikode
Court ITAT-Cochin
Relevant Act Income-tax
Date of Order 26/09/2016
Assessment Year 2010-11
Judgment View Judgment
Keyword Tags co-operative society • benefit of exemption • principal business • credit society
Bot Summary: 2 Brief facts of the case are as follows: The assessee, a primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969. The claim of deduction u/s 80P was denied by the AO for the reason that the assessee is primarily engaged in the business 1 ITA No 529 530/C/2014 of banking and in view of section 80P(4) of the Act, the assessee is not entitled to deduction u/s 80P(2) of the Act. Appellants in these different appeals are indisputably societies registered under the Kerala co-operative societies Act, 1969, for sort, KCS Act and the bye-laws of each of them, as made available to this court as part of the paper books, clearly show that they have been classified as primary agricultural credit societies by the competent authority under the provisions of that Act. The parliament, having defined the term 'co-operative society' for the purposes of the BR Act with reference to, among other things, the registration of a society under any State law relating to co-operative societies for the time being; it cannot but be taken that the purpose of the societies so registered under the State Law and its objects have to be understood as those which have been approved by the competent authority under such State law. 6.2 In the instant case, the assessee is a primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969. The Hon ble High Court, in assessees own case and other batch of cases, had held that primary agricultural credit society, registered under the Kerala Cooperative Societies Act, 1969, is entitled to the benefit of deduction u/s 80P(2). Since there is a certificate issued by the Registrar of Cooperative Societies, stating that the assessee is a primary agricultural credit society, we hold that the assessee is entitled to the benefit of deduction u/s 80P(2) of the Act.


ITA No 529 & 530/C/2014 IN INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/SHRI B P JAIN, AM & GEORGE GEORGE K, JM ITA No 529 & 530/Coch/2014 (Asst Year 2010-11 & 11-12) M/s Puthiyangadi Service Coop Vs Income Tax Officer Bank Ltd Ward 1 (2) Puhiyangadi POP Kozhikode Kozhikoe 673 021 ( Appellant) (Respondent) PAN No. AACAP0749C Assessee By None adjournment application filed -rejected Revenue By Shri Dhanaraj, Sr DR Date of Hearing 26th Sept 2016 Date of pronouncement 26th Sept 2016 ORDER PER GEORGE GEORGE K,JM: This appeal is restored to Tribunal by Hon ble Kerala High Court vide judgment dated 16.2.2016 in ITA no.200 of 2015. 2 Brief facts of case are as follows: assessee, primary agricultural credit society registered under Kerala Cooperative Societies Act, 1969. It is engaged in business of providing agricultural credit to its members. claim of deduction u/s 80P (2) was denied by AO for reason that assessee is primarily engaged in business 1 ITA No 529 & 530/C/2014 of banking and in view of section 80P(4) of Act, assessee is not entitled to deduction u/s 80P(2) of Act. 3 Aggrieved by assessment, assessee preferred appeal to first appellate authority. CIT(A) confirmed assessment order. 4 Aggrieved by above order of CIT(A), assessee preferred appeal to Tribunal. Tribunal vide order dated 21.11.2014 disposed off appeals of assessee holding that assessee was not entitled to benefit of deduction u/s 80P of Act. 5 Aggrieved by order of Tribunal, assessee preferred further appeal u/s 260A of Act. Hon ble Kerala High Court, vide judgment dated 16..2.2016 in ITA No. 200 of 2015, restored matter to Tribunal. It is in this context, case was heard on 26th Sept 2016. 6. None appeared on behalf of assessee. We have heard ld DR and perused material on record. Hon ble High Court had held that Tribunal was not justified in denying benefit of exemption u/s 80P of Act. 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 529 & 530/C/2014 6.1 In considering above substantial 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 529 & 530/C/2014 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. 6.2 In instant case, assessee is primary agricultural credit society registered under Kerala Cooperative Societies Act, 1969. certificate has been issued by Registrar of Cooperative Societies to above said effect and same is on record. Hon ble High Court, in assessees own case and other batch of cases, had held that primary agricultural credit society, registered under Kerala Cooperative Societies Act, 1969, is entitled to benefit of deduction u/s 80P(2). Since there is certificate issued by Registrar of Cooperative Societies, stating that assessee is primary agricultural credit society, we hold that assessee is entitled to benefit of deduction u/s 80P(2) of Act. 4 ITA No 529 & 530/C/2014 7 In result, appeals filed by assessee are allowed. Order pronounced in open Court on this 26th day of Sept 2016. Sd/- Sd/- (B P JAIN) (GEORGE GEORGE K ) Accountant Member Judicial Member Cochin: Dated 26th Sept 2016 Raj Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT, 5. DR 6. Guard File By order Assistant Registrar ITAT, COCHIN 5 M/s Puthiyangadi Service C-oop Bank Ltd. v. Income-tax Officer, Ward-1(2), Kozhikode
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