Amidst rising high-handedness of the Income Tax department, credit cooperatives of Karnataka have decided to catch the bull by horns and protest against Income Tax offices across the districts in the state.
The agitation will be led by Karnataka chapter of Sahakar Bharati and has the support from several cooperative organizations of the state. Those leading the protests also include Souharda Federal Cooperative societies.
These co-op organizations plan to hold a strong agitation before the district offices of Income Tax department across the state on 10th December.
It is to be noted that according to sub-section 4 of 80 P that the IT act does not apply on Credit Cooperatives but despite this income tax officials keep harassing them. They are given notices every now and then, said a Sahakar Bharati official.
Talking to Indian Cooperative Karnataka State Souharda Federal Cooperative Chairman B.H.Krishna Reddy said, “For the last two years credit cooperative societies have been receiving notices from the IT department. It is clearly mentioned in sub-section 4 of 80 P that the IT act would not apply on credit societies as they are not banks”, he asserted.
“There are 44,000 credit cooperatives in Karnataka covering 21% percent of total population. However, we are expecting nearly 1,000 people from each districts of state will join the agitation”, Reddy informed.
Reddy underlined, “On 7th December we will also call the press conference for disseminating information related to agitation. On 8th and 9th December we will give the representations before the MLAs and MPs of state”.
The whole thing sparked off when IT officials issued notices to Souharda societies recently. The Income Tax officials refuse to accept them credit cooperative institutions and treat them as business enterprises, Reddy informed.
In Karnataka, there are 250 Urban Cooperative Banks, about 5500 PACCs and 4,500 Souharda societies.
Earlier this year, cooperators connected with credit co-operative societies from across the country had assembled at NCUI to find a solution to what many of them call tax terrorism. After urban cooperative banks, credit societies have begun to get notices from IT dept for tax on their income, which was hitherto exempted.
It needs no repetition that urban coop banks have so far failed to get the exemption from 80P of the IT Act from even the NDA govt. Readers would recall it was P Chidambaram who in 2006 removed the special provision and imposed Income tax on the income of UCBs.
Hearing a plea the Supreme Court had observed that sub section 4 of 80 P clearly says that the IT Act would not apply on credit societies as they are not banks. But things change when the credit co-ops do business transaction with nominal members. The act gives exemption till the business is done with members as the principle of mutuality is very much there in such transactions.
