IN HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS 21ST DAY OF NOVEMBER, 2017 PRESENT HON BLE MRS.JUSTICE S.SUJATHA AND HON BLE Dr. JUSTICE H. B. PRABHAKARA SASTRY I.T.A.No.100010/2015 BETWEEN: LOKMANYA MULTIPURPOSE CO-OPERATIVE SOCIETY LTD., PLOT NO.8, R.S.NO.21/2, KHANAPUR ROAD, TILAKWADI, BELGAUM, RPTD.BY ITS CEO, SHRI ABHIJEET S/O AVINASH DIXIT, AGE: ABOUT 40 YEARS, OCC: SERVICE, R/O. TILAKWADI, BELGAUM-590006. APPELLANT (BY SRI.SANGRAM S.KULKARNI, ADV.) AND: 1. COMMISSIONER OF INCOME TAX (APPEALS), 3 RD FLOOR, PHIROZ KHIMJI COMPLEX, OPP.CIVIL HOSPITAL, DR.AMBEDKAR ROAD, BELGAUM-590001. 2. INCOME TAX OFFICER WARD 2 (2), OPP.CIVIL HOSPITAL, DR.AMBEDKAR ROAD, BELGAUM-590001. RESPONDENTS (BY SRI.Y.V.RAVIRAJ, ADV. FOR R1 AND R2) 2 THIS APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT PRAYING TO ALLOW APPEAL BY ANSWERING SUBSTANTIAL QUESTION OF LAW IN FAVOUR OF APPELLANT AND SET ASIDE ORDER DATED 26.09.2014, PASSED BY INCOME TAX APPELLATE TRIBUNAL, PANAJI, IN ITA NO.02/PNJ/2014 AND ETC., THIS APPEAL COMING ON FOR HEARING, THIS DAY, S.SUJATHA J., DELIVERED FOLLOWING: JUDGMENT This appeal is filed by assessee challenging order passed by Income Tax Appellate Tribunal, Panaji, (for short ITAT ), in I.T.A.No.02/PNJ/2014, for assessment year 2009-2010. 2. assessee is Multipurpose Co-operative Society registered under Karnataka State Co-operative Societies Act. For assessment year 2009-2010, return filed by assessee was processed under Section 143-(1) of Income Tax Act, 1961 (for short Act ) and case was selected for scrutiny and thereafter assessment was concluded disallowing deduction under Section 80P(2)(a)(i) of Act. Being aggrieved, assessee preferred appeal before Commissioner of 3 Income Tax (Appeals) which came to be rejected. Aggrieved by same, appeal was preferred before ITAT. ITAT dismissed same. Hence, this appeal is preferred under Section 260-A of Act, raising following substantial questions of law. i) Whether orders under challenge suffer from infirmities so far as denying exemption u/s 80P(2)(a)(i) of IT Act, 1961? ii) Whether Tribunal was justified in law in holding that provisions of Section 80P(4) of Income Tax Act, 1961 are applicable to assessee society when Assessee Society is Multipurpose Co-operative Society and not Primary Co-operative Bank on facts and circumstances of case? iii) Whether orders under challenge suffer from infirmities in considering fact that Income Tax Act, 1961 does not define word Co-operative Bank and it states that Co-operative Bank 4 will have meaning as assigned in Banking Regulation Act, 1949? iv) Whether appellant multipurpose Co- operative society falls within definition of Primary Agricultural Credit Co-operative Society under Section 2 (h-2) of Karnataka Co-operative Societies Act, and is entitled to benefit of deduction in respect of its income under Section 80P (2)(a)(i) of Act regard being had to Section 80P(4) as per dictum laid down by Hon ble High Court of Karnataka in ITA No.100042/2014 [Venugram Multi- purpose Co-operative Credit Society Ltd., vs. Income Tax Officer, Ward 1 (2), Belgaum]? 3. Learned counsel Shri Sangram S. Kulkarni, appearing for assessee submitted that in view of dictum pronounced by Hon ble Apex Court in case of CITIZEN CO-OPERATIVE SOCIETY LIMITED, THROUGH ITS MANAGING DIRECTOR, HYDERABAD in Civil Appeal No.10245/2017 (disposed of on 08.08.2017), 5 what is required to be noticed by Assessing Officer for allowing deduction under Section 80P(2)(a)(i), is firstly that activities of assessee is catering to two distinct categories of people namely resident/ordinary members or nominal members. Secondly, whether activities of assessee comes within ambit of co- operative society. These are findings of fact which requires to be adjudicated by Assessing Officer in terms of judgment of Hon ble Apex Court. Thus, learned counsel seeks for remand to Assessing Officer setting aside orders impugned herein. 4. Learned counsel Shri Y.V.Raviraj, appearing for revenue do not dispute same. Learned counsel has no objections to remand matter to Assessing Officer to redo assessment in light of judgment of Hon ble Apex Court in case of CITIZEN CO-OPERATIVE SOCIETY s case supra. 6 5. In view of aforesaid, without answering questions of law raised, impugned orders are set aside and matter is remanded to Assessing Officer to redo assessment in terms of law enunciated by Hon ble Apex Court in case of Citizen Co-operative Society s case supra, as expeditiously as possible. Appeal stands disposed of accordingly. (Sd/-) JUDGE (Sd/-) JUDGE Jm/- Lokmanya Multipurpose Co-Operative Society Ltd. v. Commissioner of Income-tax (Appeals), Belgaum / Income-tax Officer Ward 2(2), Belgaum