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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI R.P.TOLANI
ORDER This is Revenue’s appeal challenging that the ld. CIT(A) has erred in law and on facts in:- (i) allowing benefits of section 80P(2)(a)(i) of the Income Tax Act, 1961 to the assessee referring to Banking Regulation Act, 1949 and holding that assessee is not a Co-operative Bank; (ii) relying on Hon'ble Bombay High Court in the case of Quepem Urban Cooperative Credit Society Ltd. (2015) 58 Taxmann.com 113 (Bom) to hold so.
The Ld. Departmental Representative relied on the order of Assessing Officer. On the other hand, Ld. Representative for the assessee contends that CIT(A) has categorically held that assessee is not a Cooperative Bank, which comes under the RBI Act and is registered and functioning as a Members Cooperative Credit Society, which is covered by Cooperative Societies Act. The Hon'ble Bombay High Court in the case of Quepem Urban Cooperative Credit Society Ltd. has held that the assessee cannot be considered as a co-operative Bank for the purposes of section 80P(4) of the Act as following three conditions are not satisfied:- (i) the principal business of primary objective should be business of banking. (ii) its paid up share capital and reserves should not be less than rupee one lac. (iii)its bye-laws do not permit admission of any other co-operative society as its member. Further, reliance is placed on the decisions Hon'ble Karnataka High Court in the cases of: i. Shri Vardhaman Urban Co-operative Credit Society Ltd. vs. CIT,ITA No.100038 of 2014 dated 21/09/2015. ii. Hon'ble Gujarat High Court in the case of CIT vs. M/s. Jafari Momin Vikas Co.op Credit,442,443 and 863 of 2013 dated 15th January, 2014, iii. These judgments also support the view adopted by the ld. CIT(A) and Hon'ble Bombay High Court.
I have carefully considered the rival submissions and perused the material on record. In my considered view, there is a clear distinction between Cooperative Bank governed by RBI Act and Members Credit Cooperative Society, which is governed by Cooperative Societies Act. It is undisputed that assessee is not functioning as a Bank. The CIT(A) has referred to the bye-laws , society registration certificate, etc. and held that the benefits of section 80P(2)(a)(i) cannot be denied to the assessee which is not a cooperative bank. In my considered view, there is no infirmity in the order of CIT(A), which is consonance with decisions of Hon'ble Bombay High Court, Hon'ble Karnataka High Court and Hon'ble Gujarat High Court. In view thereof, the order of CIT(A) is upheld and Revenue’s appeal is dismissed.
In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 01/02/2017