80P Deduction eligible to Co-op Societies providing Credit facilities only to its Members

ITO Vs. Shri Shri Revanasiddeshwar Co-op. Credit Society Limited (ITAT Bangalore)

Undisputedly, the assessee in the instant case, is a co-operative society, registered under the Karnataka Co-operative Societies Act, 1959. It is providing credit facilities only to its members. The assessee does not have any banking license from the RBI to do any banking business. The Hon’ble Karnataka High Court in the case of Shri Bilur Gurubasava Pattin Sahakari Sangh Niyamit (supra) had categorically held that a co-operative society registered under the Karnataka Co-operative Societies Act, which is not having a banking license from the RBI to carry on the business of banking, cannot be deemed to be a co-operative bank coming within the ambit of section 80P(4) of the Act. In the instant case, since the assessee is not having any banking license from the RBI and it is providing credit facilities only to its members, the dictum laid down by the Hon’ble jurisdictional High Court in the case of Shri Bilur Gurubasava Pattin Sahakari Sangh Niyamit (supra) is applicable to the instant case. The judgment of the Hon’ble Karnataka High Court in the case of Shri Bilur Gurubasava Pattin Sahakari Sangh Niyamit (supra) has not been stayed / reversed by the Hon’ble Supreme Court, hence, we follow the dictum laid by the judgment of the jurisdictional High Court and uphold the order of the CIT(A) as correct and in accordance with law. It is ordered accordingly.