CHENNAI: Holding that even a cooperative bank would fall under the definition of a cooperative society for exemption of tax for the income earned from deposits made, the Madras HC recently ruled a cooperative society is entitled to exemption from paying tax to the income received through interests for investment made in cooperative banks.
Justice Krishnan Ramasamy passed the orders on the petitions filed by two urban cooperative societies of the Vellore district challenging the re-assessment of tax by the I-T department by denying exemption to interests acquired through cooperative bank investments.
The judge held, “A reading of the definition would make it clear that co-operative society means a co-operative society registered under the Co-operative Societies Act. Thus, a co-operative society is only a co-operative society as defined under the Act, be it a co-operative society carrying on banking business or one carrying on other businesses.”
Advocate Suhrit Parthasarathy appeared for the petitioners- the Thorappadi Urban Cooperative Credit Society and the Virupachipuram Urban Cooperative Credit Society.