JUDGMENT
R. Balasubramanian, J.
1. All the appeals stand admitted on the following question of law:
Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the assessee-co-operative society is engaged in the ‘collective disposal of the labour of its members’ and eligible as per Section 80P(2)(a)(vi) ?
2. Heard Mr. J. Narayanaswamy, learned Counsel appearing for the Revenue/appellant, and Mr. V.S. Jayakumar, learned Counsel appearing for the assessee.
3. We are concerned with the asessment years commencing from 1987-88 and ending with 1994-95. Thus assessee co-operative society. Using its resources, it procures work and gets the work done by its members-the members being partnership firms or other associations of persons, is entited deductions in respect of its income under Section 80P of the Income-tax Act, 1961. The assessee’s claim was sustained only by the Income-tax Appellate Tribunal and that is how the Department is before us. Section 80P(2)(a)(vi) and the proviso reads as hereunder:
the collective disposal of the labour of its members.
The proviso to Sub-section (2)(a) to Section 80P as hereunder:
Provided that in the case of a co-operative society falling under Sub-clause (vi), or Sub-clause (vii), the rules and bye-laws of the society restrict the voting rights to the following classes of its members, namely:
(1) the individuals, who contribute their labour or, as the case may be, carry on the fishing or allied activities ;
(2) the co-operative credit societies which provide financial assistance to the society;
(3) the State Government.
4. Reading the proviso, learned Counsel for the Revenue would contend that “members” mentioned in Sub-clause (vi) of Sub-section (2)(a) of Section 80P of the Income-tax Act is referable only to individual members and not partnership firms or other associations of persons. If that is so, when admittedly the work procured by the assessee had been done not by individual members but by others, the assessee is not entitled to any deduction. Llearned Counsel appearing for the assessee brought to our notice the judgment of the Supreme Court reported in Kerala State Co-operative Marketing Federation Ltd. v. CIT , wherein Sub-clause (iii) of Sub-section (2)(a) of Section 80P came up for consideration. Sub-clause (iii) reads as hereunder (page 818):
the marketing of the agricultural produce of its members.
5. The Supreme Court in that judgment held that the word “members” includes not only individual member but also others. But however, the Revenue counsel argued before us that, the proviso extracted above, is referable only to Clauses (vi) and (vii) and therefore the judgment of the Supreme Court referred to above may not be of any help to this court in sorting out the issue.
6. In the light of the facts noted above and the submissions made we went through the section. Our Reading of the proviso Section 80-P(2)(a) only snows that in respect of classes of members mentioned therein, the society should restrict the voting rights. The proviso does not mean that the society cannot have any other classes of members. In other words, classes of members enumerated in the proviso extracted above are only a few types of members that would have been admitted in the society and it does not mean no person not falling within the three classes enumerated in the proviso, could become member of the society. In fact, the Tribunal in its order in Appeals Nos. 93 and 94 of 2000 noted as hereunder:
It is the case of the assessee that restriction of voting rights of the society is only to the members. Others, who can participate in the activities of the society are not entitled to voting rights.
7. Under these circumstances, holding that it is not possible to read the proviso in the manner in which the Revenue wants to read it, we sustain the orders challenged in all these appeals by answering the question against the Revenue. Accordingly, the tax case appeals are dismissed. Consequently, the connected T.C.M. Ps are also dismissed.