Jason P. Boaz ORDER
Jason P. Boaz, Member (A)
1. This appeal by Revenue is directed against the order of the CIT(A)-2, Bangalore dated 26.5.2016 for Assessment Year 2012-13.
2. Briefly stated, the facts relevant for disposal of this appeal are as under:-
2.1 The assessee, admittedly a credit co-operative society providing credit/loan facilities to its members and accepting deposits from them, filed its return of income for asst. year 2012-13 on 25/9/2012 declaring total income of Rs. 19,039/- after claiming deduction of Rs. 2,57,77,021/- u/s. 80P(2)(a)(i) of the Income-tax Act, 1961 (in short 'the Act'). The return was processed u/s. 143(1) of the Act and the case was subsequently taken up for scrutiny. The Assessing Officer ('AO'), on examination of the assessee's claim for deduction u/s. 80P(2)(a)(i) of the Act, was of the view that the assessee credit co-operative society is in fact a bank as per sec. 5 (ccv) of the Banking Regulation Act, 1949 and therefore as per the provisions of sec. 80P(4) of the Act which are attracted, the assessee was not entitled to the deduction claimed u/s. 80P(2)(a)(i) of the Act. The assessment was accordingly concluded u/s. 143(3) of the Act vide order dated 30/3/2015, wherein the assessee's income was determined at Rs. 2,57,77,021/-. Aggrieved, the assessee preferred on appeal before the CIT(A)-2, Bangalore and in support of its claim for 80P(2)(a)(i) deduction, the assessee relied on the decision of the Hon'ble Karnataka High Court in ITA No. 187/2015 dated 8/9/2015, in the assessee's own case for asst. year 2009-10 wherein the Hon'ble High Court had dismissed the Revenue's appeal on the very same issue. The ld. CIT(A) observed that the issue of whether a cooperative society engaged in providing credit etc., to its members can be treated as a 'bank', has already been decided by the Hon'ble High Court of Karnataka in, inter alia, the assessee's own case for asst. year 2009-10 in ITA No. 187/2015 dated 8/9/2015 holding that the assessee is a credit co-operative society and not a 'bank' to whom the provisions of sec. 80P(4) are attracted. In that view of the matter, the ld. CIT(A) allowed the assessee's claim for deduction u/s. 80P(2)(a)(i) of the Act in her order dated 26/5/2016.
3.1 Aggrieved by the order of the CIT(A)-2, Bangalore dated 26/5/2016 for asst. year 2012-13, Revenue has field this appeal before the Tribunal wherein it has raised the following grounds:-
"1. The order of Ld. CIT(A) is clearly opposed to law as far as the findings are perverse, contrary to the facts and circumstances of the case and hence not sustainable.
2. The Ld. CIT(A) erred in treating the assessee as a cooperative society involved in extending credit facilities to its, members without appreciating the fact that the assessee is a co-operative bank and that the main activity of the co-operative society involved in extending credit facilities to its members 'in the nature of banking transactions which comes under the purview of inserted sub-section (4) to section 80P w.e.f. 01.04.2007.
3. The Ld. CIT(A) has erred in not appreciating the inserted provision of sec. 5(i)(ccii) in the part V of the Banking Regulation Act under section