Deduction U/s. 80P cannot be denied to Society extending credit facilities to members only
From the provisions of sub-section 4 of section 80P and the Explanation to section 80P, it is evident that the benefit of section 80P is not available to co-operative banks whereas the Primary Agricultural Credit Societies are entitled for the same.
For the purpose of sub-section 4, ‘co-operative bank’ and ‘Primary Agricultural Credit Society’ shall have the meanings assigned to them under the Banking Regulation Act, 1949.
Issue whether credit co-operative societies are same as cooperative banks has been dealt in detail by the Bangalore Bench of the Tribunal in the case of ACIT Vs. M/s. Balgalore Commercial Transport Credit Co-operative Society Ltd., (supra). After comparative analysis of the ‘co-operative banks’ and ‘co-operative societies’ on various parameters, the Tribunal came to the conclusion that the activities of both the organizations and the compliances to be made under various Acts for both the organizations are varied. The sub-section 4 to section 80P is applicable only to co-operative banks and not to credit co-operative societies. The decision of the Bangalore Bench of the Tribunal in the case of ACIT Vs. M/s. Balgalore Commercial Transport Credit Co-operative Society Ltd., (supra) has subsequently been followed by the co-ordinate bench of the Tribunal in the cases of ITO Vs. The Kasipalayam Primary Agricultural Co-operative Bank Ltd., (supra) and ITO Vs. M/s. Yeswanthpur Credit Credit Co-operative Society Ltd., (supra).
The assessee has also placed reliance on the recent judgment of the Hon’ble Gujarat High Court in the case of CIT Vs. Jafari Momin Vikas Co-op. Credit Society Ltd.,(supra) wherein the Hon’ble High Court after taking into consideration the CBDT Circular No.133/07 has held that sub-section 4 section 80P will not apply to assessee which is not a co-operative bank.