The Karnataka High court held that the entity registered under the Karnataka Souharda Sahakari Act 1997 fits into the definition of “co-operative society” as enacted by sec. 2(19) of the Income Tax Act, 1961 for the purpose of tax deduction under Section 80P(1).
The Petitioner is a Credit Cooperative, registered under the Karnataka Souharda Sahakari Act, 1997. The Petitioner is registered as the State-Federal Cooperative, as provided under Section 33 of the said Act. They have knocked at the doors of writ court in substance for a prayer that they are entitled to seek deduction in respect of their income in terms of the scheme envisaged under section 80P of the Income Tax Act, 1961, on the premises that they too are a Cooperative society.
A single-judge bench of Justice Krishna. S. Dixit delivered the order based on a writ petition filed by M/s Swabhimsni Souharda Credit Cooperative Ltd.
Section 2(19) elaborates as ” co-operative society” means a co-operative society registered under the Co-operative Societies Act, 1912 4 (2 of 1912 ), or under any other law for the time being in force in any State for the registration of co-operative societies;
Section 80P, (1) elaborates as, 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.
While allowing the writ petition the Court further observed that these writ petitions succeed; a declaration is made to the effect that the entities registered under the Karnataka Souhrada Sahakari Act, 1997 fit into the definition of “co-operative society” as enacted in sec.2(19) of the Income Tax Act, 1961 and therefore subject to all just exceptions, petitioners are entitled to stake their claim for the benefit of sec.80P of the said Act.
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