Lok Sabha Question No. 5020 (UNSTARRED), answered on 2017-03-31
Subject: Cooperative Societies
Ministry: FINANCE
Asked by: GAJANAN CHANDRAKANT KIRTIKAR, VIJAY KUMAR S.R., T. RADHAKRISHNAN, ASHOK SHANKARRAO CHAVAN, SUNIL BALIRAM GAIKWAD, KUNWAR HARIBANSH SINGH, BIDYUT BARAN MAHATO, SUDHEER GUPTA

## Government of India Ministry of Finance Department of Financial Services

To be answered on Friday, March 31, 2017/Chaitra 10, 1939 (Saka)

## LOK SABHA Unstarred Question No. 5020 Cooperative Societies

5020.   SHRI GAJANAN KIRTIKAR: SHRI T. RADHAKRISHNAN: DR. SUNIL BALIRAM GAIKWAD: SHRI BIDYUT BARAN MAHATO:

SHRI S.R. VIJAYAKUMAR: SHRI ASHOK SHANKARRAO CHAVAN: KUNWAR HARIBANSH SINGH: SHRI SUDHEER GUPTA:

Will the Minister of FINANCE be pleased to state:

- (a) the number of cooperative societies which are registered under the Registrar Cooperative Societies, New Delhi, category-wise;
- (b) the number of cooperative societies in which timely audit and election is being conducted, category-wise;

(c) whether under provision of Section 269 SS of Income Tax Act, 1961, the thrift and credit societies are not liable to give loan and accept deposit Rs. 20000 or more in cash;

- (d) if so, whether banking companies, post offices, saving banks and cooperative banks are exempted under above section; and
- (e) if so, the details thereof and the reasons for the same along with the corrective measures taken/being taken by the Government to streamline the disparity in this regard?

## Answer

The Minister of State in the Ministry of Finance (Shri  Santosh Kumar Gangwar)

- (a)  &  (b):  Co-operative  Societies  is  a  State  Subject  under  entry  32  of  the  State  List  of  Seventh  Schedule  of  the Constitution of India. Therefore, the information/data relating to cooperative societies registered under the Registrar Cooperative Societies, New Delhi is not available with the Central Government. However, Reserve Bank of India has reported that 16 co-operative societies which are registered with the Registrar of Cooperative Societies, New Delhi has been granted license for carrying out banking activities in New Delhi.
- (c): As per section 269SS of the Income-tax Act, 1961 (the Act), no person (other than the exempted person) shall take and accept any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, if, such amount is twenty thousand rupees or more. As no exemption has been provided to the thrift and credit societies, they are not permitted to take or accept any loan or deposit or any specified sum by the mode other than the mode specified under section 269SS, if such amount is twenty thousand rupees or more.
- (d): The provisions of section 269SS do not apply to certain categories of persons (which are specified in the section). Such persons to whom provisions of Section 269SS do not apply include banking company; post office savings bank and co-operative bank.
- (e): Before insertion of section 269SS in the Act, the unaccounted cash found in the course of search and seizure were  often  explained  as  representing  loans/deposits  taken  from  various  persons.  With  a  view  to  counter  such malpractices, vide Finance Act, 1984, section 269SS was inserted in the Act to debar taking or acceptance of the loan or deposit exceeding a specified amount otherwise than by an account payee cheque or account payee bank draft.  However,  exemption from this restriction  has  been provided to certain category of persons/entities including banking company, cooperative bank, post office saving bank in view of the fact that these entities are regulated and there is little possibility of these entities providing accommodation entries to the taxpayers for explaining unaccounted cash .