INCOME TAX ACT, 1961

Section 80P(2)(a)(i)

Deductions under section 80P(2)(a)(i) - Co-operative society - Allowability in case oflending and borrowing involving non-members - Banking has never been assessees core activity

Assessee a cooperative credit society, registered under Goa Cooperative Societies Act, 2001, claimed deductions under section 80P(2)(a)(i). Issue for consideration was as to whether with its lending and borrowing, involving non-members, the society still retained its character as cooperative society or whether it should be treated as a cooperative bank, disentitled to the benefits under section 80P(2)(a)(i). Held: Section 80P being a benevolent provision enacted by Parliament to encourage and promote the credit of the co-operative sector in general must be read liberally and reasonably, and if there is ambiguity, it must be resolved in the assessee's favour. A deduction given without any reference to any restriction or limitation cannot be restricted or limited by implication. In the instant case, indisputably, assessee had been registered as cooperative credit societies, banking, as understood by revenue, had never been its core activity. Thus, accepting deposits from non-members did not disqualify assessee from claiming benefits under section 80P.

Followed:Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT & Anr. 2019 (2) KHC 287 : 2019 TaxPub(DT) 6558 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

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