| Case ID |
237d7a28-e37d-4576-a513-9533e497b016 |
| Body |
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| Case Number |
MISC. JUDICIAL CASE No. 804 OF 1959 |
| Decision Date |
Dec 21, 1961 |
| Hearing Date |
|
| Decision |
The Patna High Court ruled in favor of the Bihar State Co-operative Bank Ltd, affirming that income derived from dealings with non-members is exempt from tax under the Government of India Notification No. R. Dis. 291-I.T./25, dated 25-8-1925. The court highlighted that the Income-tax Officer's bifurcation of profits between members and non-members was incorrect as the notification's wording was broad enough to encompass profits from any business conducted by the co-operative society, not just those from transactions with its members. This decision was based on the precedent set by the Supreme Court in Hoshiarpur Central Co-operative Bank Ltd. v. CIT, confirming the exemption of such income from taxation. |
| Summary |
In the significant ruling by the Patna High Court, the case of Bihar State Co-operative Bank Ltd. v. Commissioner of INCOME TAX addressed the exemption of profits for co-operative societies per the Income Tax Act, 1961, specifically under Section 80P. The court examined the implications of Government of India Notification No. R. Dis. 291-I.T./25, which allows co-operative societies to extend their business to non-members. The judgment emphasized that the profits derived from such dealings should not be subjected to taxation, as the notification's language was inclusive of all profits generated by the society, not limited to those from transactions with members. This case reinforces the legal standing of co-operative societies in their operational capacity and their entitlement to tax exemptions based on legislative provisions. It serves as a crucial reference point for future cases concerning the taxation of co-operative societies and their business activities, ensuring clarity in the interpretation of the relevant laws. The ruling is a landmark decision that could influence similar cases and legislative discussions surrounding the taxation of co-operative entities in India. Keywords: Income Tax Act, co-operative society, tax exemption, legal precedent, business operations, non-members, Patna High Court. |
| Court |
Patna High Court
|
| Entities Involved |
Commissioner of INCOME TAX,
Bihar State Co-operative Bank Ltd
|
| Judges |
V. RAMASWAMI, CJ,
N.L. UNTWALIA, J
|
| Lawyers |
Thakur Prasad,
Awadh Behari Prasad,
R.J. Bahadur
|
| Petitioners |
Bihar State CoOperative Bank Ltd
|
| Respondents |
Commissioner of INCOME TAX
|
| Citations |
1963 SLD 100,
(1963) 47 ITR 607
|
| Other Citations |
Hoshiarpur Central Co-operative Bank Ltd. v. CIT [1960] 40 ITR 421 (SC)
|
| Laws Involved |
Income Tax Act, 1961
|
| Sections |
80P
|