Case Law Details
Karnataka Vikas Grameena Bank Vs ACIT (ITAT Bangalore)
Assessee is a regional rural bank and formed with the merging of four regional banks into a single regional rural bank. As per the Regional Rural Bank Act 1976 notification dated 12/09/2005, the shareholders were Central Government, State Government and sponsored Bank. The case was reopened on the basis of two counts 1st for not complying TDS provisions and not submitting Form 15G/H to the respective offices, 2nd wrongly claimed deduction as per 36(1)(viia)(a) and deduction u/s 36(1)(viii) of the Act . As per assessment order for the assessment year 2014-15, the assessee filed detailed written synopsis and on the basis of that TDS issue on which the assessee has not deducted TDS of Rs.13,62,66,494/- was dropped by the AO during the reassessment proceedings and the second issue was not accepted by the AO for granting deduction u/s 36(1)(vii)/36(1)(viia) of Act. The assessee raised the issue before the CIT(A) and CIT(A) has also partly allowed the appeal of the assessee. During the course of hearing, the ld.AR vehemently argued on legal issue raised by the issue as additional ground that the assessee is a cooperative society as per Regional Rural Bank Act 1976. On perusal of Chapter V sec.22 it has been stated as under:-
“22. Regional Rural Bank to be deemed to be a co-operative society for purpose of the Income-tax Act, 1961.- For the purpose of the Income-tax Act, 1961 (43 of 1961), or any other enactment for the time being in force relating to any tax on income, profits or gains, a Regional Rural Bank shall be deemed to be a co-operative society.”
As per the above section, it is clear that for the purpose of Income-tax Act, the assessee is deemed to be a cooperative society and for computing the income from profit or gains as per sec.32 of the Regional Rural Bank Act 1976, is overriding provisions which is stated as under:-
“32. Act to override the provisions of other laws.-
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