TXA132-130-17.DOC

Santosh

IN THE HIGH COURT OF BOMBAY AT GOA

TAX APPEAL NO. 132 OF 2017

The Principal Commissioner of Income Tax,

having office at Aayakar Bhavan, Patto-Plaza,

Panaji, Goa.

…Appellant.

Versus

Deendayal Nagar Sahakari Pathsaunstha

Maryadit, Deendayal Bhavan, F 2, Town

Center, Bicholim, Goa.

…Respondent.

Ms. Amira Abdul Razaq, Central Govt. Standing Counsel for

the appellant.

Mr. Somnath Karpe, Advocate for the respondent.

WITH

TAX APPEAL NO. 130 OF 2017

The Principal Commissioner of Income Tax,

having office at Aayakar Bhavan, Patto-Plaza,

Panaji, Goa.

…Appellant.

Versus

The Shiroda Urban Co-operative Credit

Society Ltd., Panchayat Building, Shiroda,

Ponda, Goa

…Respondent.

Ms. Amira Abdul Razaq, Central Govt. Standing Counsel

for the appellant.

Mr. Riyaz Padvekar, with Mr. Prashil Arolkar,

Advocates for the respondent.

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TXA132-130-17.DOC

CORAM:

SUNIL P. DESHMUKH &

M. S. SONAK, JJ.

DATED:

3^rd August 2021

ORAL JUDGMENT : (Per SUNIL P. DESHMUKH, J.)

1.

Aforesaid tax appeals have been preferred by the Revenue

against the decisions of the Income Tax Appellate Tribunal,

Panaji Bench, (ITAT) on similar grounds.

2.

The appeals have been admitted on the following

substantial questions of law :

(i) Whether in law and on facts the Hon'ble ITAT

was right in not appreciating the fact that the assessee

is a co-operative society which fulfills all the three

conditions of being held a Primary Co-operative

Bank, as given in section 5(ccv) of Banking Regulation

Act, 1949 ?

(ii) Whether in law and on facts, the Hon'ble Income

Tax Appellate Tribunal was right in not appreciating

the definition of a co-operative bank which as per

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explanation below section 80P(4) "The Co-operative

bank" shall have the meaning assigned to it in part-V

of the Banking Regulation Act, 1949 ?

(iii)Whether in the law and facts the Hon'ble Tax

Appellate Tribunal was right in not appreciating the

facts that the assessee society being a credit co-

operative society engaged in banking business is a

Primary Co-operative Bank within the definition of

section 5(ccv) of the Banking Regulation Act, 1949

and as such, not eligible for deduction under section

80P(2)(a)(i) of the Income Tax Appellate Act, 1961 ?

and, as such, are conducted and heard together, and are being

disposed of by common order.

3.

Ms. Razaq, the learned Standing Counsel for the Revenue

vehemently contends that going by the business conducted by the

respondents-cooperative societies, it would be seen that the

cooperative societies are doing banking business and would be

primary cooperative banks under the Banking Regulation Act,

1949 and thus, would not be eligible for deduction under

Section 80P(1)(2)(a)(i) of the Income Tax Act, 1961 (IT

Act). She submits that admittedly, share capital of the

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TXA132-130-17.DOC

respondent-cooperative societies is more than rupees one

lakh, they do banking business with their members and do

not allow a cooperative society as their members. Thus,

requisites for a cooperative society to be a primary

cooperative bank are fulfilled in the present cases and as such,

deductions ought to have been disallowed pursuant to orders

passed by the Assessing Officer.

4.

On the other hand, Mr. Padvekar and Mr. Karpe,

learned Counsel appearing for the respondent-cooperative

societies submit that consideration of these aspects had come

up earlier, on a number of occasions and this Court has

consistently considered that a cooperative society doing

business with the members whilst accepting deposits and

lending money to the members, would not be a primary

cooperative bank pursuant to the Banking Regulation Act,

1949. They submit that respondents-cooperative societies do

accept deposits, but only from their members and also are

lending money only to their members. They further purport

to contend that eve