ULHASNAGAR MAHANAGARPALIKA KARMACHARI SAHAKARI PATPETDHI MARYADIT ,THANE vs. COMM. OF INCOME TAX. (APPEALS)-CIRCLE 1, THANE

PER PAWAN SINGH, JUDICIAL MEMBER;

of ld. CIT(A) dated 26.12.2024, 27.09.2024 & 05.08.2024 for Assessment Year

(AY) 2020-21, 2018-19 & 2017-18 respectively. In all appeals, the assessee

has raised similar grounds of appeal, facts in all the years are almost similar

except variation of figure of addition on account of disallowance under section

80P(2)(d). In appeal for A.Y. 2020-21, the assessee has raised following

grounds of appeal:

A. GROUNDS OF APPEAL

Ulhasnagar MahanagarpalikaKarmachari SahakariPatpedhiMaryadit ITA Nos. 6960, 6961 & 6962/Mum/2025 (AY 2020-21, 2018-19 & 2017-18) 1. The learned CIT (Appeals) National Faceless Appeal Centre failed to appreciate that the Interest and dividend received by the Appellant Society from other co- operative societies of Rs 40,86,990/- is eligible for deduction u/s 80P(2)(d) 2. The learned CIT (Appeals) National Faceless Appeal Centre has erred in disallowing the deduction u/s 80P(2)(a)(i) for the Interest and dividend income of Rs 40,86,990,/- received from Co-operative Societies

B RELIEF CLAIMED 1. The deduction claimed by the Assesses u/s 80P(2)(d) of Rs 40,86,990/- be allowed.

about delay in filing appeal before Tribunal. In appeal for AY 2020-21 there is

delay of 249 days, in AY 2918-19, there is delay of 389 days and in AY 2017-

18 there is delay of 381 days in filing appeal before Tribunal.

The learned authorised representative (ld.AR) of the assessee submits that

delay in filing appeal is neither intentional nor deliberate. The assessee has

filed affidavit of AchyutBudhajiSase, Secretary of assessee society. The ld. AR

of the assessee further submits that assessment for AY 2020-21 was

completed during severe covid pandemic period. The assessee could not

respond to the notices of assessing officer. During the first appellate

Ulhasnagar MahanagarpalikaKarmachari SahakariPatpedhiMaryadit ITA Nos. 6960, 6961 & 6962/Mum/2025 (AY 2020-21, 2018-19 & 2017-18) proceeding, notices was issued to assessee through ITBA portal. The staff of

assessee was not very well convergent with the use of ITBA portal resultantly

no communication of hearing of appeal was realised. Thus, no compliance was

made. The assessee was not aware about dismissal of appeal. The assessee

came to know about dismissal of appeal when tax was recovered by

department. There is no intentional delay in filing appeal before Tribunal. On

merit, the ld. AR of the assessee submits that he has good case on merit and

is likely to succeed if his case is considered on merit. The assessee has earned

interest and dividend from cooperative Bank of Rs. 40,86,993/-. The

cooperative banks are primarily cooperative society as has been held in a

series of decision by various High Courts and Tribunal.

appeal before Tribunal were made in respect of appeal for AY 2018-19. On

merits it was argued that the AO while passing assessment order disallowed

deduction of interest from cooperative bank of Rs. 48,52,161/-under section

80P(2)(d) and treated it as income from other sources.

were made for condonation of delay 384 days in filing appeal before Tribunal

were made in respect of appeal for AY 2018-19. On merits it was argued that

the AO while passing assessment order disallowed deduction of interest from

cooperative bank of Rs. 45,45,868/- under section 80P(2)(d) and treated it as

Ulhasnagar MahanagarpalikaKarmachari SahakariPatpedhiMaryadit ITA Nos. 6960, 6961 & 6962/Mum/2025 (AY 2020-21, 2018-19 & 2017-18) income from other sources. The ld AR of the assessee submits that in a series

of decisions it has been held that Co-operative banks are primarily cooperative

society and such cooperative societies are eligible for deduction on interest

earned form deposits on dividends from co-operative banks. To support his

submissions, the ld AR of the assessee has relied on the following case laws;  Sikkim State Co-operative Supply & Marketing Federation Limited Vs DCIT (2026) 348 CTR 112 (Sikkim),  PCIT Vs Ashwani Kumar Arban Co-operative Society (2024) 168 taxmann.com 314 (Guj),  PCIT Vs Ambika Co-operative Credit Society in Tax Appeal No. 171 of 2024 dated 21.04.2025 and  ITO Vs MIG Co-operative Housing Society in ITA no 4576/Mum/2025 dated 04.09.2025. 6. On the other hand, learned senior departmental representative (Sr.DR) for the

Revenue submits that in appeal for A.Y. 2020-21, the assessee was ex-parte

before AO as well as before ld. CIT(A). In other years, the lower authorities

have considered issue on merit. The Sr. DR for the Revenue submits that

cooperative banks are not a cooperative society and the assessee is not

eligible for deduction of interest earned from such cooperative bank. To

support his submission, the ld. Sr. DR for the Revenue relied upon the decision

of Janpriya Sahakari Patsanstha Maryadit in ITA No. 6516/M/2024 dated

28.02.2025.

through the orders of lower authorities. Firstly, we are considering the plea of

Ulhasnagar MahanagarpalikaKarmachari SahakariPatpedhiMaryadit ITA Nos. 6960, 6961 & 6962/Mum/2025 (AY 2020-21, 2018-19 & 2017-18) condonation of delay in filing all the appeal. Before us, the ld. AR of the

assessee vehemently argued that delay is not intentional or deliberate rather,

the employee of assessee was not aware about passing of impugned order of

ld. CIT(A) and that the assessee came to know about passing of assessment

order only of recovery of tax demand. To support such contention, the

assessee has filed affidavit of one of his employees who is looking after affairs

of assessee society. Thus, considering over all facts of the case, we find that

assessee is interested in pursuing the case on merit. Hence, delay in filing

appeal is all years are condoned. Now adverting to the merits of the case.

section 80P(2)(d) for interest or dividend earned from co-operative society. We

find that grounds of appeal raised by the assessee is in fact covered by a

series of decision by this Bench as well as other Co-ordinate Benches of

Tribunal wherein it has been consistently held that Co-operative Banks are

primarily co-operative society and the interest or dividend earned from such

Co-operative Bank are eligible for deduction under section 80P(2)(d). Similar

View was taken by Gujarat High Court in Gujarat High Court in the case of

Surat Vankar Sahakari Sangh Ltd. (2016) 72 taxmann.com 169; PCIT Vs

Ashwani Kumar Arban Co-operative Society (2024) 168 taxmann.com 314

(Guj),Allahabad High Court in the case of U.P. Cooperative Sugar Factories

(2013) 17 taxmann.com 58; Punjab Haryana High Court in the case of

Haryana Co-operative Sugar Mills Ltd. (1989) 46 Taxman 28 (P & H), Sikkim

Ulhasnagar MahanagarpalikaKarmachari SahakariPatpedhiMaryadit ITA Nos. 6960, 6961 & 6962/Mum/2025 (AY 2020-21, 2018-19 & 2017-18) High Court in Sikkim State Co-operative Supply & Marketing Federation Limited Vs

DCIT (supra)and decision of Pune Tribunal in Niphad Nagari Sahakari Pata

Sanstha Ltd. in ITA No. 1336/PN/2011 and in CIT ITO V Sri Biluru Gurubasava

Pattina Sahakari Sangha Niyamitha (ITA No. 5006/2013)(Karnataka HC). Now,

turning to specific year wise deduction under section 80P(2)(d) of the Act, we

find that in AY 2017-18 & in AY 2028-19, the AO has verified the figure of

deduction of interest of dividend income received from Cooperative bank, thus,

the appeal of these two years is allowed.

order of ld CIT(A) is ex-parte hence, the matter in this year is restored back to

the file of Jurisdictional AO for limited purpose for verification of figure of

interest and dividend from co-operative bank for the purpose of claim of

deduction under section 80P(2)(d) and to allow such deduction to the

assessee in accordance with case laws referred in para-8 above. In the result,

appeal for AY 2020-21 is allowed for statistical purpose.

(supra) relied by ld Sr DR for the revenue is not applicable on the facts of

present case, in the said case the assessee claimed deduction under section

80P(2)(a)(i), which is about the income earned form activities of the assessee

society. Moreover, the issue is restored back to the AO to decide the issue

afresh and to verify if the co-operative bank is co-operative society.

Ulhasnagar MahanagarpalikaKarmachari SahakariPatpedhiMaryadit ITA Nos. 6960, 6961 & 6962/Mum/2025 (AY 2020-21, 2018-19 & 2017-18) 11. In the result, all the appealsfor AY 2017-18 & 2018-19 are allowed and appeal

for AY 2020-21 is allowed for statistical purpose.

Order pronounced in the open Court on 13/05/2026.

/- S Sd-//- Sd/-

GIRISH AGRAWAL PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, DATED: 13/05/2026 Biswajit

Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order

Assistant Registrar ITAT, Mumbai