SOLAPUR DCC BANK EMPLOYEES CO- OPERATIVE SOCIETY LIMITED,SOLAPUR vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX -4, PUNE

This appeal by the assessee is directed against the order dt. 23-03-2022 passed by the Pr.CIT, Pune-4 u/s.263 of the Income- tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2017-18.

The appeal is time barred by 390 days. The assessee has filed an affidavit explaining the reasons for the delay. We are satisfied with the reasons. The delay in filing the appeal is, therefore, condoned and the appeal is admitted for disposal on merits.

Succinctly, the facts of the case are that the assesse filed its return claiming deduction u/s.80P in respect of interest income earned from the deposits kept with Cooperative Banks/Societies, which was allowed by the AO. The ld. PCIT invoked the jurisdiction u/s 263 of the Act and held the assessment order to be erroneous and prejudicial to the interest of the revenue on account of allowing the deduction either u/s.80P(2)(a)(i) or u/s.80P(2)(d) in respect of such interest income. Aggrieved thereby, the assessee has come up in appeal before the Tribunal.

We have heard the rival submissions and gone through the relevant material on record. The ld. PCIT has held the assessment order to be erroneous and prejudicial to the interest of the Revenue only on the ground that the claim of deduction u/s.80P on the interest income was not in order. In this regard, it is observed that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co- operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. Similar view has been taken by the Pune Benches of the Tribunal in several cases including The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT (ITA No.203/PUN/2019, order dated 16-11-2022).

In view of the foregoing discussion, we hold that the impugned order cannot be sustained. The same is, therefore, overturned.

In the result, the appeal is allowed.