Jagannath Co-operative Credit Society vs ITO, Ward -41(1)(2)

Parties Involved

Facts Summary

The assessee, Jagannath Co-operative Credit Society, filed an appeal challenging the order passed by the National Faceless Appeal Centre (NFAC) / CIT(A) under section 250 of the Income Tax Act, 1961 for the assessment year 2016-17. The assessee claimed deduction under section 80P(2)(a)(i) of the Act for its entire income derived from providing credit facilities to its members. The Assessing Officer disallowed the claim, which was sustained by the CIT(A). The assessee argued that it is a Co-operative Credit Society and not a Co-operative Bank, and thus entitled to the deduction. The assessee also cited statutory requirements for making fixed deposits in Co-operative Banks and claimed that the interest income from these deposits is attributable to providing credit facilities and hence eligible for deduction.…

Legal Issues

• 1. Whether the Assessing Officer erred in denying the deduction u/s 80P(2)(a)(i) to the assessee.
• 2. Whether the definition of 'Primary Co-operative Bank' under section 56(ccv) of the Banking Regulation Act, 1949 was wrongly interpreted by the Assessing Officer.
• 3. Whether the judgment of Hon'ble Bombay High Court in Quepem Urban Co-operative Credit Society vs ACIT is applicable to the appellant Society.
• 4. Whether the interest on fixed deposits in Co-operative Banks is taxable under the head 'Income from Other Sources' u/s 56 of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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