M/S GRADUATES CO-OPERATIVE CREDIT SOCIETY LTD ,BANGALORE vs. INCOME TAX OFFICER WARD-6(2)(1), , BANGALORE

O R D E R Per Shri A.K. Garodia, Accountant Member Both these appeals are filed by the assessee and these are directed against two separate orders of CIT(A)-1, Bangalore both dated 30.11.2017 for Assessment Years 2009-10 and 2010-11. Both these appeals were heard together and are being disposed of by way of this common order for the sake of convenience.

by the assessee for Assessment Year 2009-10 in are as under. “1. On the facts and in the circumstances of the case and in law, the Learned CIT(A)-I, Bangalore has grossly erred in dismissing the appeal filed by the Appellant.

2. Learned CIT (A) -I Bangalore is grossly erred in the differentiating the definitions and applicability of the 80P(2)(a)(i) and 80P(4) of Income Tax Act., disallowed the claim of the deduction under section 80P(2)(a)(i) by considering the appellant is a co-operative bank, by reading section 80(P)((2)(a)(i) together with the section 80P(4). Wrongly considering section 80(P)(2)(a)(i) is applicable only for primary agricultural credit society or a primary co-operative agricultural & rural development bank.

5. The Appellant prays that the disallowance of Rs.12,84,180/- in respect of the income derived from the activities of the appellant engaged in Carrying on the business of banking or providing credit facilities to its members.

3. The grounds raised

by the assessee for Assessment Year 2010-11 in are as under.

1. On the facts and in the circumstances of the case and in law, the Learned CIT(A)-I, Bangalore has grossly erred in dismissing the appeal filed by the Appellant.

2. Learned CIT (A) -I Bangalore is grossly erred in the differentiating the definitions and applicability of the 80P(2)(a)(i) and 80P(4) of Income Tax Act., disallowed the claim of the deduction under section 80P(2)(a)(i) by considering the appellant is a co-operative bank, by reading section 80(P)((2)(a)(i) together with the section 80P(4). Wrongly considering section 80(P)(2)(a)(i) is applicable only for primary agricultural credit society or a primary co-operative agricultural & rural development bank.

3. As per the provisions of the section 80P(2)(a)(i) of the income tax act, which is reproduced below: 80P. Deduction in respect of income of co-operative societies. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub- section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub- section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely : (a) in the case of a co-operative society engaged in (i) carrying on the business of banking or providing credit facilities to its members. On the facts and in the circumstances of the case and in law the Assessing Officererred in reading the section 80(P)(2)(a)(i) without appreciating that all itsmembers are graduates. 4. Learned CIT(A) -I Bangalore, grossly erred in reading the section 80(P)(2)(a)(i) without appreciating that all its members are graduates who are residing within the jurisdiction as specified in the bye laws of credit society. a credit co-operative society formed for exclusive benefits of the graduates. 5. The Appellant prays that the disallowance of Rs.21,33,923/- in respect of the income derived from the activities of the appellant engaged in Carrying on the business of banking or providing credit facilities to its members. 6. The appellant prays to adduce such further evidence to substantiate his case. 7. The appellant prays leave to add, alter, clarify amend and or withdraw any grounds of appeal as and when the occasion demands.”

4. Both sides were heard and it was noted that the impugned order of CIT(A) is without considering the latest judgement of Hon’ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT as reported in 397 ITR 1 and therefore, we feel it proper to restore the entire matter back to the file of CIT(A) for fresh decision after considering this latest judgement of Hon’ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. vs. ACIT (supra) and after comparing the facts of the present case with the facts of that case. Hence the orders of CIT(A) are set aside in both the years and the entire matter is restored back to his file for fresh decision in the light of above discussion after providing adequate opportunity of being heard to both sides. Needless to say, the CIT (A) should pass a speaking and reasoned order after comparing the facts of the present case with the facts of that case i.e. in the case of The Citizen Co-operative Society Ltd. vs. ACIT (supra).

Order pronounced in the open court on the date mentioned on the caption page.