KERALA STATE CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD. KSCARDB versus THE ASSESSING OFFICER, TRIVANDRUM AND ORS.

KERALA STATE CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD. KSCARDB versus THE ASSESSING OFFICER, TRIVANDRUM AND ORS.

The appellant is not a 'co-operative bank' within the meaning of Section 56 of the Banking Regulation Act, 1949 read with the definitions in the NABARD Act, 1981 because it does not transact 'banking' as defined in s.5(b) BR Act (accepting deposits from the public), holds no RBI banking licence and has not been declared a state/central co-operative bank; therefore the exclusion in Section 80P(4) does not apply and the appellant is entitled to deduction under Section 80P(2)(a)(i).

Parties
Appellant/assessee: Kerala State Co-operative Agricultural and Rural Development Bank Ltd. (KSCARDB); Respondent: The Assessing Officer, Trivandrum and Ors.
Jurisdiction
India
Judgment Date
14 September 2023
Procedural Posture
Civil Appeal / Appeal to the Supreme Court (final Judgment)
Outcome
Appeals allowed
Legal Topics
Deduction Under Section 80 P, Definition of 'co Operative Bank', Distinction Between Banking and Providing Credit to Members, RBI Licensing Under Section 22 BR Act, Interpretation of Statutory Definitions
Income Tax Banking Regulation Co Operative Societies Law NABARD Act Reserve Bank of India Act Deduction Under Section 80 P Definition of 'co Operative Bank' Distinction Between Banking and Providing Credit to Members +2 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 5 Authorities cited 15 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Kerala State Co-operative Agricultural and Rural Development Bank Ltd. (KSCARDB)

Appellant/assessee

The Assessing Officer, Trivandrum and Ors.

Respondent

Procedural Posture

Civil Appeal / Appeal to the Supreme Court (final Judgment)

Legal Issues

  1. 1 Whether the appellant is a 'co-operative bank' within the meaning of Section 80P(4) of the Income Tax Act, 1961
  2. 2 Whether the appellant is entitled to deduction under Section 80P(2)(a)(i) as a co-operative society providing credit facilities to its members
  3. 3 Whether the tests and ratio in Mavilayi Service Co-operative Bank apply to the appellant

Ratio Decidendi

The appellant is not a 'co-operative bank' within the meaning of Section 56 of the Banking Regulation Act, 1949 read with the definitions in the NABARD Act, 1981 because it does not transact 'banking' as defined in s.5(b) BR Act (accepting deposits from the public), holds no RBI banking licence and has not been declared a state/central co-operative bank; therefore the exclusion in Section 80P(4) does not apply and the appellant is entitled to deduction under Section 80P(2)(a)(i).

Court Disposition

Appeals allowed

Orders

  • Order(s) of the Kerala High Court and other authorities set aside
  • Appellant held not to be a co-operative bank within the meaning of s.80P(4) and entitled to deduction under Section 80P of the Income Tax Act, 1961