आदेश/ORDER

PER WASEEM AHMED, ACCOUNTANT MEMBER:

The captioned appeals have been filed at the instance of the Assessee against the two order of the Commissioner of Income Tax (Appeals)- 3, Vadodara [CIT(A) in short] of even dated 31/07/2017 arising in the matter of assessment order passed under s.143(3) of the Income Tax Act, 1961 (here-in- after referred to as "the Act") dated 18/03/2016 relevant to Assessment Years (AY) 2013-14 & 2014-15.

2. There is a common issue raised by the assessee in both the appeals. Therefore we heard them together for the sake of brevity. Accordingly, we are disposing of the same by way of passing the consolidated order for both the appeals.

3. First, we take up ITA No. 2156/Ahd/2017 for A.Y 2011-14. The assessee has raised the following grounds of appeal:

‘’1. The Ld.CIT(A) erred on facts and in law in confirming disallowance of deduction claimed u/s.80P amounting to Rs.15,14,410/-

The appellant craves permission to add, alter, amend or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal.’’

4. The only issue raised by the assessee in this appeal is that learned CIT (A) erred in confirming the disallowance of ₹15,14,410/- under section 80P of the Act.

5. Briefly stated facts are that the assessee in the present case is a co- operative society engaged in the activity of financing to its members. The assessee under the year consideration has claimed deduction under section 80P(2)(a)(i) of the Act amounting to ₹15,14,410 only. However, the AO during the assessment proceedings observed that the assessee is a co-operative bank and accordingly, he was of the view that the assessee is not entitled to the deduction under section 80P(2)(a)(i) of the Act. Accordingly, the AO denied the deduction of the assessee and added to the total income of the assessee.

6. Aggrieved assessee preferred an appeal to ld. CIT (A). The assessee before the ld. CIT (A) submitted that it is registered as a co-operative bank but the activities of it were of co-operative societies only. As such it is providing loan to its members only.

6.1 The assessee also submitted that the RBI had canceled its application for the banking activities. As such without having the valid registration certificate from the RBI, it cannot carry out banking activities.

6.2 The assessee also claimed that its application for the banking license is pending and subject to jurisdiction in the court of Hon’ble Gujarat High Court. Accordingly, the assessee requested to grant the deduction under section 80P(2)(a)(i) of the Act.

7. However, ld. CIT (A) disregarded the contention of the assessee and confirmed the order of AO by observing as under:

‘’5. I have considered the grounds of appeal, submission of the appellant and the order of the Assessing Officer. This issue came for consideration recently before Hon’ble Gujarat High Court in the case of State Bank of India (SBI) Vs CIT [2016] 72 taxmann.com 64 (Gujarat) wherein all cases on this issue including Apex Court decision in the case of Totgars Co-operative Sale Society v. ITO [2010] 322 ITR 283(SC) and CIT vs jafari Momin in Vikas Co-op. Credit Society Ltd. [2014] 362 ITR 331 (Guj.) were considered. Hon’ble Gujarat High Court has followed Totgars Co-operative Sale Society (Supra) and distinguished Jafari Momin Vjkas Co-op. Credit Society Ltd. (Supra) as well as CIT Vs Baroda Peoples Co-op. Bank Ltd. [2005] 280 !TR 282 (Guj.). Another landmark decision of Tumkur Merchants Souharda Credit Co-operative Ltd. Vs ITO [2015] 23C Taxrnan 309 (Kar.) was also considered. In case of State Bank of: India (SBI (Supra), it has been held by the Gujarat High Court as under:

"20. In so far as the decision of this court in the case of Baroda Peoples Co-op. Bank Ltd. (supra) is concerned, this court inter alia held that section 80P(2)(a)(i) of the Act permits a co-operative society engaged in carrying on business of banking or providing credit facilities to its members to claim deduction of th