READYMONEY PREMISES CO-OP SOCIETY LIMITED,MUMBAI vs. INCOME TAX OFFICER, WARD 22(3)(6), MUMBAI, MUMBAI

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ITA 4708/MUM/2026Status: DisposedITAT Mumbai14 July 2026AY 2020-215 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 bank is a species of the genus 'co-operative society'. Therefore, interest earned by a co-operative society from a co-operative bank is deductible under Section 80P(2)(d).

What were the facts?

The assessee, a co-operative society, claimed a deduction under Section 80P(2)(d) for interest earned from deposits with co-operative banks. The Assessing Officer disallowed this deduction, and the CIT(A) confirmed the disallowance.

What were the issues?

Whether interest earned by a co-operative society from deposits with a co-operative bank is eligible for deduction under Section 80P(2)(d).

Which sections of the Income-tax Act were involved?

Section 80P(2)(d),Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH MUMBAI

Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL

Hearing: 02.07.2026Pronounced: 14.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 4708/MUM/2026 Assessment Year: 2020-21 Readymoney Premises Co-Op Income tax officer – Society Limited Ward 22(3)(6), Dr. Annie Besant Road, Mumbai Worli Naka, Vs. Mumbai - 400018 (PAN: AAAAR2069K) (Appellant) (Respondent) Present for: Assessee : Shri Rajesh Athavle, CA Revenue : Smt. Sujatha Iyyanger, Sr, DR Date of Hearing : 02.07.2026 Date of Pronouncement : 14.07.2026 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi vide order no. ITBA/NFAC/S/250/2025-26/1087930427(1), dated 26.03.2026, passed against the assessment order by the Assessment Unit, Income- tax Department, u/s. 147 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 18.03.2025, for Assessment Year 2020-21.

2.

Grounds taken by the assessee are reproduced as under: 1. The learned CIT(A) erred in confirming the disallowance of INR 31,03,187 under Section 80P(2)(d) by the assessing officer.

2 ITA No. 4708/Mum/2026 Readymoney Premises CSL Assessment Year 2020-21 2. Each one of the above grounds of appeal is without prejudice to the above.

3.

Brief facts of the case as culled out from the records are that assessee was incorporated on 13.01.1970 as a society and is registered under Maharashtra Co-Operative Societies Act, 1961 vide registration no. BOM/HSG/2259 dated 13.01.1970. It is a non-profit organization. Return of income was filed on 10.02.2025 in response to notice received under section 148, reporting total income at Nil after claiming deduction under section 80P(2) (d) for Rs.31,03,187/-. Interest earned by the assessee is from Abhyudaya Co-op Bank Ltd, Maharashtra State Co-op Bank Ltd and Saraswat Co-op Bank Ltd Ld. Assessing officer disallowed the said deduction. Aggrieved, assessee went in appeal before the ld. CIT(A) who confirmed the disallowance despite assessee submitting relevant details in this regard. Aggrieved, assessee is in appeal before the Tribunal.

4.

We have heard both the parties and perused the material on record. Regarding the issue in respect of claim of deduction u/s. 80P(2)(d) in respect of interest earned on deposits kept with cooperative banks is no longer res integra, as there is no dispute in respect of earning of interest by the assessee from the cooperative banks. The aspect of allowability u/s.80(2)P(d) is extensively dealt by the Hon'ble High Court of Karnataka in case of the PCIT vs. Totagar Cooperative Sales Society Limited [2017] 78 taxmann.com 169 (Kar). Relevant findings given in para 7 to 12 are as under: "7. However, the contention being taken by the learned counsel is untenable. For the issue that was before ITAT, was a limited one, namely whether for the purpose of Section 80P(2)(d) of the Act, a Co-operative Bank should be considered as a Co-operative Society or not? For, if a Co-operative Bank is considered to Co- operative Society, then any interest earned by the Co-operative Society from a Co- operative Bank wo necessarily be deductible under Section SOP(I) of the Act.

3 ITA No. 4708/Mum/2026 Readymoney Premises CSL Assessment Year 2020-21 8. The issue whether a Co-operative Bank is considered to be a Co- operative Society is no longer res integra. For the said issue has been decided by the ITAT itself in different cases. Moreover, the word "Co-operative Society" are the words of a large extent, and denotes a genus, whereas the word "Co-operative Bank" is a word of limited extent, which merely demarcates and identifies a particular species of the genus Co-operative Societies. Co- Operative Society can be of different nature, and can be involved in different activities; the Cooperative Society Bank is merely a variety of the Co-operative Societies. Thus the Co- operative Bank which is a species of the genus would necessarily be covered by the word "Co-operative Society". 9. Furthermore, even according to Section 56(i)(ccv) of the Banking Regulations Act, 1949, defines a primary Co-operative Society bank as the meaning of Co- Operative Society. Therefore, a Co-operative Society Ban. would be included in the words 'Co- operative Society'. 10. Admittedly, the interest which the assessee respondent had earned was from a Co-operative Society Bank Therefore, according to Sec. 80P(2)(d) of the IT. Act, the said amount of interest earned from a Co-operative Society Bank would be deductible from the gross income of the Co-operative Society in order to assess it: total income. Therefore, the Assessing Officer was not justified in denying the said deduction to the assessee respondent. 11.The learned counsel has relied on the case of Totgars Co- operative Sale Society Ltd. v. IΠΟ (2010) 322 ITR 283/188 Taxman 282 (SC). However, the said case dealt with the interpretation, and the deduction, which would be applicable under Section 80P(2)(a)(i) of the I.T. Act. For, in the present case the interpretation that is required is of Section 80P(2)(d) of the L.T. Act and not Section 80P(2)(a)(i) of the IT. Act. Therefore, the said judgment is inapplicable to the present case. Thus, neither of the two substantial questions of la canvassed by the learned counsel for the Revenue even arise it is the present case. 12. For the reasons stated above, this Court does not find any merit in the present appeal. Hence, the appeal is dismissed.” 4.1. We also find that the issue before us of whether a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) for the interest income derived from its investments held with a cooperative bank or not, is covered in favour of the assessee not only by the decision of Hon’ble High Court of Karnataka referred above but also in plethora of cases including few of the following cases:

(i) Land and Cooperative Housing Society Ltd. v. ITO (2017) 46 CCH 52 (Mum)

4 ITA No. 4708/Mum/2026 Readymoney Premises CSL Assessment Year 2020-21 (ii) C. Green Cooperative Housing and Society Ltd. v. ITO 21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31.03.2017 (iii) Marvwanjee Cama Park Cooperative Housing Society Ltd. v. ITO Range- 20(2)(2), Mumbai (ITA No. 6139/Mum/2014, dated 27.09.2017.

5.

From the above, we understand that under section 80P(2)(d), assessee is entitled for the deduction in respect of interest or dividends received from investments made with any other cooperative societies. From the above extraction, we also note that Hon'ble High Court held that the word ‘cooperative society’ are the words of large extent and denotes a genus, whereas the word ‘cooperative bank’ is a word of limited extent, which merely de-markets and identifies a particular species of the genus ‘cooperative societies’. Thus, a cooperative bank is merely a variety of the cooperative societies which can be of a different nature and can be involved in different activities.

5.1. We are of the considered view that though the co-operative bank pursuant to the insertion of Sub-section (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P, however, since a co- operative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of cooperative societies, therefore, the interest and dividend income derived by a cooperative society from its investments held with a co-operative bank, would be entitled for claim of deduction under Sec.80P(2)(d) of the Act.

6.

Considering the undisputed factual matrix in the present case which are akin to the judicial precedents dealt above and the judicial precedents referred, we hold that assessee is entitled to claim of

5 ITA No. 4708/Mum/2026 Readymoney Premises CSL Assessment Year 2020-21 deduction u/s. 80P(2)(d). Accordingly, disallowance made by ld. Assessing Officer is deleted.

7.

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

Order pronounced in the open court on 14 July, 2026.

Sd/- Sd/- (Amit Shukla) (Girish Agrawal) Judicial Member (Accountant Member) Dated: 14 July, 2026 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai

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