19 January 2013
Clarification No.F.133/06/2007/TPL dated 9-5-2007 of CBDT which deals with IT exemption for co-operative societies u/s 80(P) is required. Is it available in the internet?
26 July 2013
Section 80P. DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOCIETIES.
(1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee.
(2) The sums referred to in sub-section (1) shall be the following, namely :- (a) In the case of a co-operative society engaged in – (i) Carrying on the business of banking or providing credit facilities to its members, or
(ii) A cottage industry, or
(iii) The marketing of the agricultural produce grown by its members, or
(iv) The purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or
(v) The processing, without the aid of power, of the agricultural produce of its members,
(vi) The collective disposal of the labour of its members, or
(vii) Fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its members, the whole of the amount of profits and gains of business attributable to any one or more of such activities :
Provided that in the case of a co-operative society falling under sub-clause (vi) or sub-clause (vii), the rules and bye-laws of the society restrict the voting rights to the following classes of its members, namely :- (1) The individuals who contribute their labour or, as the case may be, carry on the fishing or allied activities;
(2) The co-operative credit societies which provide financial assistance to the society;
(3) The State Government;
(b) In the case of a co-operative society, being a primary society engaged in supplying milk, oilseeds, fruits or vegetables raised or grown by its members to-
(i) A federal co-operative society, being a society engaged in the business of supplying milk, oilseeds, fruits or vegetables, as the case may be; or
(ii) The Government or a local authority; or
(iii) A Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act (being a company or corporation engaged in supplying milk, oilseeds, fruits or vegetables, as the case may be, to the public), the whole of the amount of profits and gains of such business;
(c) In the case of a co-operative society engaged in activities other than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as does not exceed, - (i) Where such co-operative society is a consumer’s co-operative society, one hundred thousand rupees; and
(ii) In any other case, thousand rupees.
Explanation : In this clause, “consumers’ co-operative society” means a society for the benefit of the consumers;
(d) In respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income;
(e) In respect of any income derived by the co-operative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income;
(f) In the case of a co-operative society, not being a housing society or an urban consumers’ society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power, where the gross total income does not exceed twenty thousand rupees, the amount of any income by way of interest on securities or any income from house property chargeable under section 22.
Explanation : For the purposes of this section, an “urban consumers’ co-operative society” means a society for the benefit of the consumers within the limits of a municipal corporation, municipality, municipal committee, notified area committee, town area or cantonment.
(3) In a case where the assessee is entitled also to the deduction under section 80HH, or section 80HHA or section 80HHB or section 80HHC or section 80HHD or section 80-I or section 80-IA or section 80J or section 80JJ, the deduction under sub-section (1) of this section, in relation to the sums specified in clause (a) or clause (b) or clause (c) of sub-section (2), shall be allowed with reference to the income, if any, as referred to in those clauses included in the gross total income as reduced by the deductions under, section 80HH, section 80HHA, section 80HHB section 80HHC, section 80HHD, section 80-I, section 80-IA, section 80J and section 80JJ.
Jafari Momin Vikas Co-Op. Credit ... vs Department Of Income Tax on 1 March, 2013 IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "B" BENCH AHMEDABAD
Before Shri G.C.Gupta, Vice President and
Shri T.R. Meena, Accountant Member
ITA Nos. 2665, 2666 & 2667/Ahd/2012
Assessment YearS :2007-08, 08-09 & 09-
10 (Respectively)
ACIT, V/s. The Jafri Mom in Vikas Credit B.K. Circle, Palanpur Co.Op. Society Ltd., Station Road, Near Masjid, Palanpur.
PAN No. AAEFJ2304G
(Appellant) .. (Respondent)
अपीलाथȸ कȧ ओर से Shri Y. P. Verma, Sr. D.R. By Appellant
ू×यथȸ कȧ ओर से/By Respondent Shri Mukesh M. Patel, A.R. सुनवाई कȧ तारȣख/Date of Hearing
22.01.2013
घोषणा कȧ तारȣख/Date of Pronouncement 01.03.2013
ORDER
PER : T.R.Meena, Accountant Member
These are three appeals at the behest of Revenue which have
emanated from the orders of CIT(A)-XX, Ahmedabad, dated 21.09.2012 for all
three assessment years. All three appeals were heard together and are being
disposed of by way of this common order for the sake of convenience. The
sole ground of appeal is against deleting the disallowance of Rs. 21,76,526/-
for A.Y. 07-08, Rs.18,23,372/- for A.Y. 08-09 & Rs.21,98,927/- for A.Y. 09-10
made u/s. 80P(2)(a)(i) of the Act.
I T A No s . 2 66 5 , 26 66 & 2 667 / A hd/ 2 0 12 A. Y s . 0 7- 0 8, 08 - 0 9 & 09- 1 0 Page 2
2. The appellant is a society is carrying out business of Banking and
claimed deduction u/s. 80P(2) of the Act. The A.O. observed that Section
2(24) of the Act has been amended w.e.f. 1.4.2007, which reads as under:
"(viia) the profit and gain of any business of banking (including providing credit facility) carried on by co-operative society with its members."
Further, sub-section (4) of 80P inserted with effect from 1.4.2007 reads as
under:
"(4) the provision of this section shall not apply in relation to any co-operative bank other than A primary Agricultural Credit society, or A primary co-operative Agricultural and Rural Development bank."
After analyzing both the Sections, the ld. A.O. found that the appellant is not a
co-operative society neither a primary Agricultural Credit Society nor a primary
Co-operative Agricultural and Rural Development Bank. The clarification
issued by the CBDT is also not applicable in case of assessee. As per A.O.,
the amended provision is applicable on the appellant and income earned by
the Co-operative Credit Society is not exempt under the provisions of Section
80P(2)(a)(i) of the Act, but covers u/s. 80P(4) of the IT Act. Thus, he denied
the deduction u/s. 80P(2)(a)(i) of the Act in all the years.
3. The assessee carried the matter before the ld. CIT(A), who had partly
allowed the appeal after considering the detailed reply of the appellant and
also CBDT clarification vide letter dated 09.05.2007 in F.No. 133/06/2007-TPL
issued. He also considered respected Bangalore 'B' Bench decision in case
of ACIT vs. Bangalore Commercial Transport Credit Co-operative Society Ltd.
in ITA No. 1069/Bang/2010 for A.Y. 2007-08, dated 08.04.2011, wherein the I T A No s . 2 66 5 , 26 66 & 2 667 / A hd/ 2 0 12 A. Y s . 0 7- 0 8, 08 - 0 9 & 09- 1 0 Page 3
difference between the "Co-operative Bank" and "Co-operative Society" has
been discussed in detail. He also relied in case of Dy.CIT, Central Circle,
Panaji, Goa vs. Jayalakshmi Mahila Vividodeshagala Souharda Sahakari Ltd.
(137 ITD 163), ITO, Ward-1(4) Vs. Jankalyan Nagri Sahakari Past Sanstha
Credit Society Ltd. vs. CIT, Ahmadabad Tribunal, order dated 20.06.2012 in
ITA No. 902/Ahd/2012. Ld. CIT(A) has held as under:
"Keeping in view the above mentioned CBDT's circular, clarification and the case-laws, AO's finding that in view of the amendments made in Section 2(24) and 80P, appellant is not eligible for deduction u/s.80P is not in accordance with law. In view of the amendment to Sec.2(24), the profits and gains of the appellant are its income. However, since the appellant is not covered by Section 80P(4), it is entitled to the deduction u/s. 80P(2). The disallowance is deleted. AO is directed to allow the deduction in accordance with the said section."
However, Hon'ble Supreme Court decision in case of Totgars Co-operative
Sale Society Ltd. vs. ITO (322 ITR 283) (2010), wherein the interest income
on short term deposits and in Government securities is to be treated as
income from other sources. Thus, the CIT(A) allowed the appeal partly.
4. Now the Revenue is before us. Ld. Sr. D.R. relied upon the order of the
A.O., however, ld. Counsel for the appellant relied on the order of the CBDT
Circular as well as various case laws cited by the appellant before the CIT(A)
and requested to confirm the order of the CIT(A).
5. We have heard the rival contentions and perused the material on
record. The ld. CIT(A) has verified the nature of activity and held that the I T A No s . 2 66 5 , 26 66 & 2 667 / A hd/ 2 0 12 A. Y s . 0 7- 0 8, 08 - 0 9 & 09- 1 0 Page 4
assessee company is a co-operative society not in banking business. The
provisions of Section 80P(4) will not have any application in the assessee's
case. Therefore, it is entitled to deduction u/s. 80P(2)(a)(i) of the Act. Thus,
we confirm the order of the CIT(A).
6. In the combined result, the Revenue's appeals are dismissed in all
assessment years.
These Orders pronounced in open Court on 01.03.2013
Sd/- Sd/- (G.C.Gupta) (T.R. Meena) Vice President Accountant Member True Copy
S.K.Sinha
आदे श कȧ ूितिलǒप अमेǒषत / Copy of Order Forwarded to:-
Regional Rural Banks not eligible for deduction under section 80P The CBDT has, through this circular, reiterated that Regional Rural Banks are not eligible for deduction under section 80P of the Income-tax Act, 1961 from the assessment year 2007-08 onwards. It has also been clarified that the Circular No. 319 dated 11-1-1982 deeming any Regional Rural Bank to be cooperative society stands withdrawn for application with effect from A.Y.2007-08. This is consequent to the amendment in section 80P by the Finance Act, 2006, providing specifically that w.e.f. 1-4-2007, the provisions of section 80P will not apply to any co-operative bank other than a Primary Agricultural Credit Society or a Primary Cooperative Agricultural and Rural Development Bank. The same has been further clarified by this circular.
27 July 2013
Thanks for the response. There are plethora of decisions in the same manner,like in the case of yaswanthpur credit society, Sarvodays credit society, Jankalyan nagari cs, Jayalakshmi CS etc. But what I require is the CBDT clarification No.F.133(6)/2007/TPl Dt.9-5-2007 on which all these decisions are based. Jafari memon decision also refers this letter.
19 October 2013
CBDT clarification mentioned in this thread on the applicability of sec.80(P)to Co-operative societies on which a number of decisions of ITATs all over India is based upon is required.
27 September 2015
Thank God, at last I have got it. ALL CO-OPERATIVE SOCIETIES WHICH DO NOT HAVE A LICENSE OF RBI ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 80(P). But the Court, ITAT and Income tax authorities in KERALA STATE alone do not accept this truth.
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