HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Hoshiarpur Central Co-operative Bank Ltd. v. Commissioner of Income-tax, Simla
Civil Appeal No. 238 of 1955 — Single certified appeal under section 66A(2), addressing the referred notification question for two assessment years.
[1961] 1 SCR 107 ·
Legacy Indian Income-tax Act regime, section 60 notification; report headnote prints 1921(IX of 1921), while judicial body uses the historical section scheme without an express year
Holding and result. The notification’s broad exemption for co-operative-society business profits covered authorised commodity trading with nonmembers; a supposed mutuality limitation could not narrow its words.
Sources & disclosures includedDownload original judgment / order
3 Judges · S. K. Das · M. Hidayatullah · J. C. Shah
Assessment years: 1948–49, 1949–50
01 · Facts of the case
The bank’s authorised commodity-trading profits were exempt under the historical notification. It traded in controlled commodities with the Registrar’s approval and claimed the 25 August 1925 notification, as amended, for 1948–49 and 1949–50. Revenue treated the exemption as confined to business with members. The High Court accepted that restriction, and the bank appealed. The report’s headnote prints an anomalous 1921 Act citation; the judicial discussion uses the legacy section scheme.
Source: SCR 108–110; target passages only,shared-page exclusions in read_bounds.
02 · Discussion by the Hon’ble Court
Hidayatullah J treated the question as one of construing the notification. Its reference to profits of any co-operative society was broad enough to embrace business with outsiders when that business had been authorised. The added Explanation distinguished business profits from specified investment, property, dividend and other-source income; it did not impose a general members-only condition. Revenue did not pursue its other-sources argument in the Supreme Court. Earlier decisions about securities income or mutual dealings did not justify reading an unexpressed restriction into the notification.
Source: SCR 110–113; target passages only,shared-page exclusions in read_bounds.
03 · Judicial decision
The controlled-commodity business profits fell within the exemption. The reference question should have been answered affirmatively.
Source: SCR 113–113; target passages only,shared-page exclusions in read_bounds.
04 · Outcome / in whose favour
Bank’s appeal allowed. The High Court’s adverse answer was displaced by an answer recognising the notification exemption. Bank awarded costs in both courts.
Source: SCR 113–113; target passages only,shared-page exclusions in read_bounds.
05 · AKHB REVIEW POINT
Read the precise exemption and its exclusions before importing mutuality concepts. This result concerns an old notification and authorised commodity trading. It cannot itself establish a modern co-operative bank’s deduction; later provisions have distinct activity conditions and bank exclusions.
Source: SCR 109–113; target passages only,shared-page exclusions in read_bounds.
Originating proceedings
- case numbers
- Civil Reference No. 3/1952
- relationship
- Punjab High Court judgment 27 May 1953.
Source & verification
Download original judgment / order · Open cited source rendition
7-page retained public-mirror SCR report. The complete report was read as text and page images. The acquisition URL is preserved provenance; current endpoint availability and authentication as a signed original are not newly verified. All 7 physical text and image pages personally read; SCR107–113. Target boundaries: physical PDF pages 1–7; SCR 107–113. Start: after previous-case disposition and divider. End: above next case caption/divider. Headnote p. 1 expressly prints Income-tax Act, 1921(IX of 1921); retained without silently substituting 1922. The body cites the legacy scheme but no year. Body p. 2 prints permission letter 28 September 1954 despite assessment years 1948–49/1949–50 and High Court judgment 27 May 1953. No corrected date is invented. Previous Pandit M. S. M. Sharma tail and running title on p. 1 are excluded; next Balwantrai Chimanlal Trivedi caption/headnote on p. 7 is excluded. Frozen catalogue uses Shimla; printed target caption uses Simla.
- Headnote p. 1 expressly prints Income-tax Act, 1921(IX of 1921); retained without silently substituting 1922. The body cites the legacy scheme but no year.
- Body p. 2 prints permission letter 28 September 1954 despite assessment years 1948–49/1949–50 and High Court judgment 27 May 1953. No corrected date is invented.
- Previous Pandit M. S. M. Sharma tail and running title on p. 1 are excluded; next Balwantrai Chimanlal Trivedi caption/headnote on p. 7 is excluded.
- Frozen catalogue uses Shimla; printed target caption uses Simla.
Statutory scope
Legacy Indian Income-tax Act regime, section 60 notification; report headnote prints 1921(IX of 1921), while judicial body uses the historical section scheme without an express year; Historical Income-tax Act sections 6,8,9,10,12,60,66(1),66A(2); source-year anomaly preserved, Government of India notification F.D.(C.R.)R.Dis.No.291-I.T./25,25 August 1925, as subsequently amended, Co-operative Societies Act, section 31
The retained Finance Act 2011 version of section 80P provides specified activity-based deductions and limits other activities under section 80P(2)(c). Section 80P(4) excludes co-operative banks except the stated agricultural credit/development categories. That scheme is not the broad notification construed here.
Section 149(2)/(5), Finance Act 2026 text, retains specified deductions and a co-operative-bank exclusion with exceptions; the old exemption is not carried over.
Historical operative law remains separate from the specified later text. Tax-year applicability,unexamined statutory conditions,complete transition provisions and comprehensive later judicial history have not been verified.
Other provisions addressed: Historical Income-tax Act sections 6,8,9,10,12,60,66(1),66A(2); source-year anomaly preserved; Government of India notification F.D.(C.R.)R.Dis.No.291-I.T./25,25 August 1925, as subsequently amended; Co-operative Societies Act, section 31
Later treatment
Source checked 2026-10-08. No specific subsequent judicial treatment independently verified for this note.
No specific subsequent judicial treatment independently verified; the Madras and Rangoon decisions discussed are antecedent authorities.
Antecedent authorities are not subsequent treatment.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
Identified source links
- Income-tax Act,1961: bounded later-version comparison
DOR-hosted Taxmann compilation as amended by Finance Act2011 The retained Finance Act 2011 version of section 80P provides specified activity-based deductions and limits other activities under section 80P(2)(c). Section 80P(4) excludes co-operative banks except the stated agricultural credit/development categories. That scheme is not the broad notification construed here. Identified2011version; not current consolidated law,whole-Act or image review. Text pages read: 42, 538–541.
- Income-tax Act, 2025 bounded provisions
Official compilation as amended by Finance Act 2026 Versionlines 0–13; section 149(1)–(5), lines 8528–8603, physicalpp 209–211. Capture hashes identify exact extracted tool-output bytes,not remotePDF bytes. No whole-source,image,current-applicability or exhaustive history claim.
AI disclosure & professional disclaimer
AI-assisted research. The AKHB Review Point is editorial analysis, not part of the Court’s judgment.
AI-assisted legal research note for general information and professional research. It is not legal or tax advice. Verify the original judgment, applicable statutory version and subsequent judicial treatment before relying on it. The AKHB Review Point is editorial analysis, not part of the Court’s judgment.