The Bangalore bench of Income Tax Appellate Tribunal (ITAT) observed that the benefit of sec 80P of the Income Tax Act is available to co-operative societies who do not have banking license from RBI and is engaged in providing facilities only to its members.
The bench comprising of Jason Boaz (Accountant Member) and George George K(Judicial Member) was hearing the appeal of Revenue against the assessee being a Co-operative credit society limited.
In the opinion of the Assessing Officer, the assessee is not eligible for getting deduction under section 80P since the co-operative societies engaged in the banking business are not entitled to the benefit of sec 80P(2) of the Act.
According to the said section in the case of co-operative society any income derived by way of interest or dividend by the co-operative society from its investment or any other co-operative society shall be deducted while computing the total income.
But here in this case the assessee is a co-operative society registered under the Karnataka Co-operative Societies Act 1959 and 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 Bangalore bench of ITAT observed that , the assessee cannot be considered as a co-operative bank according to the section 80P(4) of the act , because it doesn’t have any banking license from the RBI to do any banking business and it is registered under the Karnataka co-operative societies act 1959. It is just only a co-operative society which is providing credit facilities only to its members.
Hence the Bench dismissed the appeals of the revenue by declaring that the benefit of sec 80p is not available to co-operative societies who do not have banking license from the RBI and is providing credit facilities only to its members.
Read the full text of the Order Below
