In an interesting interpretation of Law, the Madras High Court has ruled that when an urban co-op bank is run by a co-op society, it stills remains just a co-op society and thereby it is exempted from paying tax to the income received through interests for investment made in cooperative banks.
India Express quotes Justice Krishnan Ramasamy observing, “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.”
The petitions were filed by two urban cooperative societies of the Vellore district challenging the re-assessment of tax by the I-T department.