ITO 22(2)(3), NAVI MUMBAI vs. MUMBAI TELEWORKERS CO OP CREDIT SOCIETY LTD, MUMBAI

During hearing of this appeal, none was present for the assessee in spite of issuance of registered AD notice. Therefore, we have no option but to proceed ex-parte, qua the assessee, and proceed to dispose off this appeal on the basis of material available on record. The ld. DR, Shri Pradeep Kumar Singh, defended the addition made by the Assessing Officer. 2.1. We have considered the submissions of ld. DR and perused the material available on record. The facts, in brief, are that the assessee is a cooperative society registered under the Maharashtra Cooperative Society Act engaged in the business of accepting deposits from its members and providing loans/advances/credit facilities to its members. The ld. Assessing Officer denied the claimed deduction treating the assessee as a cooperative bank.

2.2. On appeal before the Ld. Commissioner of Income Tax (Appeal), the factual matrix was considered and decided in favour of the assessee. The Revenue is aggrieved and is in appeal before this Tribunal. 2.3. It is noted that the main objective of the assessee society is to provide financial assistance only to its members. Admittedly, the assessee society is not a bank as per Banking Regulation Act, 1949 so that it may attract sub-section (4) of section 80P of the Act. The issue was deliberated upon in Income Tax Officer vs Jankalyan Nagri Sahakari Sansthan Ltd. by the Pune Bench of the Tribunal. It is also noted that identical deduction was disallowed by the Assessing Officer for Assessment year 2009-10 and relief was granted to the assessee by the Ld. Commissioner of Income Tax (Appeal). No contrary decision was brought to our notice. The ratio laid down in CIT vs Jafari Momin Vikas Cooperative Credit Society Ltd. (Tax Appeal No.442, 443 and 863 of 2013) order dated 15/01/2014, supports the case of the assessee. While coming to this conclusion, the Hon'ble High Court duly considered CBDT Circular No.133 of 2007 dated 09/05/2007 clarifying that sub-section 4 of section 80P of the Act will not apply to an assessee which is not a Cooperative Bank.