MAVILAYI SERVICE COOPERATIVE BANK LTD.VS. CIT CALICUT & ANR. [CIVIL APPEAL NOS. 7343-7350 OF 2019]
Once it is clear that the co-operative society in question is providing credit facilities to its members, the fact that it is providing credit facilities to non-members does not disentitle the society in question from availing of the deduction
(I) That section 80P of the IT Act is a benevolent provision, which was enacted by Parliament in order to encourage and promote
the growth of the co-operative sector generally in the economic life of the country and must, therefore, be read liberally and in favour of the assessee.
(II) That once the assessee is entitled to avail of deduction, the entire amount of profits and gains of business that are attributable to any one or more activities mentioned in sub- section (2) of section 80P must be given by way of deduction;This is for the reason that when the legislature wanted to restrict the deduction to a particular type of co-operative society, such as is evident from section 80P(2)(b) qua milk co-operative societies, the legislature expressly says so which is not the case with section 80P(2)(a)(i).
(III) That section 80P(4) is in the nature of a proviso to the main provision contained in section 80P(1) and (2). This proviso specifically excludes only co-operative banks, which are co-operative societies who must possess a licence from the RBI to do banking business.