SHAILENDRA CO- OPERATIVE HOUSING SOCIETY LTD,PUNE vs. THE INCOME TAX OFFICER, WARD-3(1), PUNE

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ITA 429/PUN/2023Status: DisposedITAT Pune31 May 2023AY 2019-204 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that interest income earned on fixed deposits with other co-operative banks qualifies for exemption under Section 80P(2)(d) of the Act. The CPC was directed to rectify the intimation and allow the exemption.

What were the facts?

The assessee, a co-operative society, filed a nil income return. The processing of the return denied exemption under Section 80P. A rectification petition was filed, and while some exemption was granted, the threshold limit and certain interest income were still denied.

What were the issues?

Whether interest income earned by a co-operative society on deposits with other co-operative banks is eligible for deduction under Section 80P(2)(d) of the Income-tax Act.

Which sections of the Income-tax Act were involved?

Section 80P,Section 143(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI INTURI RAMA RAO

For Appellant: Shri Sarang Gudhate

This is an appeal filed by the assessee directed against the order of National Faceless Appeal Centre (NFAC), Delhi dated 20.02.2023 passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

Briefly, the facts of the case are as under:

Shailendra Co-operative Housing Society Ltd.

The appellant is a Co-operative society registered under the Maharashtra Co-operative Societies Act. The return of income for the assessment year 2019-20 was filed on 27.09.2019 declaring nil income. The said return of income was processed u/s 143(1) of the Act at a total income of Rs.2,32,430/- vide intimation dated 16.04.2020 denying exemption u/s 80P of the Act.

3.

On receipt of said intimation, a rectification petition was filed on 01.10.2020 requesting the CPC to rectify the said intimation. The CPC vide order dated 08.10.2020 allowed the exemption u/s 80P of the Act, however, denied the threshold exemption limit of Rs.50,000/-. Being aggrieved by the Rectification order, an appeal was filed before the CIT(A), who vide impugned order while granting threshold exemption limit of Rs.50,000/-, enhanced the taxable income by holding that the interest income earned on fixed deposits with the Co-operative banks and interest on savings bank does not qualify for exemption u/s 80P(d) of the Act.

4.

Being aggrieved by the decision of CIT(A), the appellant is in appeal before this Tribunal.

Shailendra Co-operative Housing Society Ltd.

5.

I have heard the rival contentions and perused the material available on record. The issue in the present appeal is no longer res integra as the same is covered by the decision of the Tribunal in Vaibhav Nagari Sahakari Pat Sanstha Maryadit vs. ITO (ITA No.280/PUN/2023) for A.Y. 2018-19, order dated 26.04.2013. The relevant findings of the Tribunal are as under:

“4. I have heard the rival submissions and gone through the relevant material on record. It is seen that the question is of granting deduction u/s 80P of the Act on interest income earned from various cooperative banks. The extant issue is no more res integra in view of the catena of decisions delivered by the Pune Benches. The Pune Bench in Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT (ITA No.1249/PUN/2018) has held, vide its order dated 07-01-2022, 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. The payer of interest is also a Co-operative society registered under the Cooperative Societies Act. Respectfully following the decision of the Division Bench, I overturn the impugned order and direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest earned from various cooperative banks.”

Shailendra Co-operative Housing Society Ltd.

6.

Respectfully following the decision of this Tribunal (supra), I hold that the interest income earned on fixed deposits with other co- operative banks qualifies for exemption u/s 80P(2)(d) of the Act. Accordingly, I direct the CPC to rectify the intimation and allow the exemption u/s 80P(2)(d) of the Act. Thus, the grounds of appeal raised by the assessee are allowed.

7.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 31st May, 2023.

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