ITO, SALEM vs. S-1308, AMMAPET PRIMARY AGRICULTURAL CO-OPERATIVE BANK LTD., SALEM

There was a delay of 24 days in filing this appeal by the Revenue. The Revenue has not filed a petition for condonation of delay. We have heard the Ld. D.R. and Ld. representative. We find that there was sufficient cause for not filing the appeal before the stipulated time. Therefore, we condone the delay and admit the appeal.

Shri Shiva Srinivas, the Ld. Departmental Representative submitted that the assessee a Co-operative Bank claimed deduction under Section 80P of the Income Tax Act, 1961 (in short ‘the Act’). According to the Ld. D.R., a Co-operative Bank cannot claim deduction under Section 80P of the Act. The deduction available under Section 80P of the Act is only to co-operative credit society and not to the bank. Referring to the decision of the co-ordinate bench of this Tribunal in Shri Chandraprabhu Urban Co-operative Credit Society Ltd., (2014) 45 taxman 14, the Ld. D.R., submitted that Co-operative Banks are not eligible for deduction under Section 80P of the Act.

On the contrary, Shri M. Balu, the Ld. representative for the assessee submitted that in the assessee’s own case in tax case appeal No.259 of 2016, the Madras High Court found that the assessee is not a Co-operative Bank. The activities of the assessee in the nature of accepting deposits, advancing loans, etc., are confined only to its members and that too in a particular geographical area. Therefore, the assessee society is eligible for deduction under Section 80P(a)(i) of the Act.

We have considered the rival submissions on either side and perused the material available on record. As rightly submitted by the Ld. representative for the assessee, the Madras High Court in the assessee’s own case examined this issue in tax case appeal No.259 of 2016 and found that the assessee Co-operative Bank is not a bank and it is only a credit society. The High Court further observed that the activity of the assessee in accepting deposits, advancing loans etc., are confined only to its members and also restricted to a particular geographical area. Therefore, the High Court found that the assessee’s society is eligible for deduction under Section 80P(2)(a)(i) of the Act. In view of the judgement of the High Court, this Tribunal do not find any reason to interfere with the order of the lower authority. Accordingly the same is confirmed.

In the result the appeal of the Revenue stands dismissed.