NAMDEO KADAM GRAMIN BIGAR SHETI SAHAKARI PAT SANSTHA LTD,SATARA vs. INCOME TAX OFFICER, WARD-3, SATARA, SATARA

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ITA 471/PUN/2023Status: DisposedITAT Pune18 May 2023AY 2018-194 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 a co-operative society is eligible for deduction under Section 80P(2)(d) on interest income earned from investments/deposits with a co-operative bank, even after the insertion of Section 80P(4). The impugned orders were overturned.

What were the facts?

The assessee claimed deduction under Section 80P on interest income earned from co-operative banks. The Assessing Officer disallowed this deduction, and the CIT(A) affirmed the disallowance for assessment years 2018-19 and 2020-21.

What were the issues?

Whether interest income earned by a co-operative society from a co-operative bank is eligible for deduction under Section 80P(2)(d) despite the provisions of Section 80P(4).

Which sections of the Income-tax Act were involved?

Section 80P,Section 143(3),Section 250,Section 80P(2)(d),Section 80P(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH, PUNE

Before: SHRI R.S. SYAL

For Appellant: Ms. Deepa Khare
For Respondent: Shri Suresh Gaikwad

आदेश / ORDER

PER R.S. SYAL, VP:

1.

These two appeals by the assessee arise out of the ex parte orders dated 23-03-2023 passed by the CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment years 2018-19 & 2020-21.

2.

It is seen that the assessment orders in these cases were passed u/s.143(3) of the Act disallowing the amount of deduction claimed by the assessee u/s.80P amounting to Rs.22,40,771/- and Rs.26,85,471/- towards interest income earned by the assessee from co-operative banks. The ld. CIT(A) affirmed the view point of the AO for both the years under consideration. Aggrieved thereby, the assessee has approached the Tribunal.

3.

I have heard both the sides and gone through the relevant material on record. It is seen that the issue assailed in both the appeals under consideration 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 orders and direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest earned from various cooperative banks.

4.

In the result, both the appeals are allowed. Order pronounced in the Open Court on 18th May, 2023.

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