SUBORDINATE ENGINEERS ASSOCIATION,KOLHAPUR vs. INCOME TAX OFFICER, WARD-2(2), KOLHAPUR, KOLHAPUR

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ITA 261/PUN/2023Status: DisposedITAT Pune16 May 2023AY 2017-184 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, following its own precedent which relied on the Karnataka High Court's view, held that the interest income earned from deposits with a nationalized bank is eligible for deduction under Section 80P(2)(a)(i).

What were the facts?

The assessee, a credit cooperative society, claimed deduction under Section 80P(2)(a)(i) for interest income earned from a nationalized bank. The Assessing Officer denied this deduction, a decision upheld by the CIT(A).

What were the issues?

The primary issue was whether interest income earned by a cooperative society from a nationalized bank is deductible under Section 80P(2)(a)(i) of the Income-tax Act.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, SMC BENCH, PUNE

Before: SHRI R.S. SYAL

For Respondent: Ms. Neha Deshpande

आदेश / ORDER

PER R.S. SYAL, VP:

1.

This appeal by the assessee arises out of the order dated 16-01-2023 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 year 2017-18.

2.

Succinctly, the facts of the case are that the assessee is a credit cooperative society engaged in the business of providing banking or credit facilities to its members. The assessee filed

Subordinate Engineers Association MSEB Co.op. Credit Society Ltd., return claiming deduction u/s.80P(2)(a)(i) of the Act in relation to interest income earned from a nationalized bank, namely, Oriental Bank Ltd., Kolhapur amounting to Rs.5,16,876/-. The Assessing Officer denied the benefit of deduction u/s.80P, which came to be countenanced in the first appeal. Aggrieved thereby, the assessee has come up in appeal before the Tribunal.

3.

I have heard the ld. DR and gone through the relevant material on record. There is no appearance from the side of the assessee despite notice. The sole issue agitated in the extant appeal on the allowability of deduction u/s.8P(2)(a)(i) is no more res integra. I find the Pune Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit Vs. The Pr.CIT (ITA No.713/PUN/2016) has decided the question of availability of deduction u/s 80P on interest income by noticing that the Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit Vs. ITO (ITA No.604/PN/2014) has allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed by the Hon’ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 Taxman 309 (Kar.) allowing deduction u/s. 80P on interest income and that of the Hon’ble Delhi High Court in Subordinate Engineers Association MSEB Co.op. Credit Society Ltd., Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT (2014) 110 DTR 89 (Delhi) not allowing deduction u/s.80P on interest income earned from banks. Both the Hon’ble High Courts took into consideration the ratio laid down in the case of Totgar’s Cooperative Sale Society Ltd. (supra). No direct judgment from the Hon’ble jurisdictional High Court on the point having been pointed out, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon’ble Karnataka High Court in the (supra). The position continues to remain the same before this Tribunal also. Respectfully following the precedent, the impugned order is overturned and the interest income earned from the deposits kept with nationalised bank amounting to Rs.5,16,876/- is allowed as deduction u/s.80P(2)(a)(i) of the Act.

4.

In the result, the appeal is allowed.

Order pronounced in the Open Court on 16th May, 2023.

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