ADHAR NAGRI SAHAKARI PATPEDHI MARYADIT,BHAYANDER vs. CIRCLE - 1, THANE, THANE

The brief facts of the case are that the assessee is a cooperative society and filed the return u/s 139 of the Act by declaring total income “Nil” after due deduction under chapter VIA of the Act amounting to Rs.52,98,121/-. The assessee’s case was selected for scrutiny. The Ld. AO found that the assessee claimed deduction amount to rs.

The Ld. AR filed an application for admission of additional evidence and submitted that the assessee had earned interest income from investments in a cooperative bank amounting to Rs.65,83,243/-. It was contended that such interest income is eligible for deduction under section 80P of the Act, subject to the limitation of the gross total income. The Ld. AR further reiterated that the total interest income earned from investments in the cooperative bank amounts to Rs.65,83,243/-. A detailed list of the interest earned from various bank accounts has been furnished in a tabular format, which is reproduced below: Particulars From To Interest SVC Co-operative Bank LTD 01-04-2019 31-03-2020 7,69,546.00 NKGSB Co-operative Bank LTI 01-04-2019 31-03-2020 6,61,488.00 Cosmos Bank 01-04-2019 31-03-2020 1,49,696.00 ApnaSahakari Bank 01-04-2019 31-03-2020 9,41,225.00 Vasai JantaSahakari Bank 01-04-2019 31-03-2020 1,14,685.00 Saraswat Bank 01-04-2019 31-03-2020 6,47,354.00 TDC Bank 01-04-2019 31-03-2020 24,89,187.00 Vasai JantaSahakari Bank 01-04-2019 31-03-2020 8,10,062.00 Total 65,83,243.00

In relation to his submission, the assessee submitted the interest certificates of all the banks duly produced before the Bench. The Ld. AR prayed for quashing the addition made by the Ld. AO. 5. The Ld. DR argued and contended that the assessee failed to appear before the Ld. AO during the course of assessment proceedings; accordingly, the assessment was completed ex parte. The Ld. DR strongly relied upon and supported the orders of the Revenue authorities.

We have heard the rival submissions and perused the material available on record. The assessee is a cooperative society which filed its return of income claiming deduction under section 80P(2)(d) amounting to Rs.20,67,548/- and under section 80P(2)(a)(i) amounting to Rs.32,30,576/-, aggregating to Rs.52,98,121/-. On perusal of the record, it is observed that the assessee earned interest income from investments in cooperative banks amounting to Rs.65,83,243/-. We find that the assessee is eligible to claim deduction to the extent of the gross total income, i.e., Rs.52,98,121/-. The Ld. CIT(A), however, rejected the assessee’s claim of deduction under section 80P(2)(d) of the Act on the ground that the same is hit by the provisions of section 80P(4) of the Act. In our considered view, the issue is no longer res integra in light of the decisions of the Hon’ble Supreme Court in the case of PCIT vs. Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd. reported in (2023) 150 taxmann.com 173 (SC) and Kerala State Co- operative Agricultural and Rural Development Bank Ltd. vs. Assessing Officer reported in [2023] 458 ITR 384 (SC). Further, the Coordinate Benches of the ITAT, Mumbai, have consistently taken a view in favour of the assessee. Accordingly, we hold that a cooperative society is eligible for deduction under section 80P(2)(d) of the Act in respect of interest earned from investments in cooperative banks. We also admit the additional claim of the assessee, noting that the assessee had originally restricted its claim under section 80P(2)(d) to Rs.20,67,548/- in the return of income. In our view, the assessee is entitled to claim deduction under section 80P(2)(d) of the Act before computing the total income, subject to verification. However, it is noted that the impugned assessment order was passed ex parte, and the Ld. AO did not have the opportunity to verify the interest income earned by the assessee from investments in cooperative banks. The assessee has now furnished the relevant certificates before us during the course of hearing. In view of the above, we deem it appropriate to restore the matter to the file of the Ld. AO for the limited purpose of verifying the interest income earned from cooperative banks and to allow the deduction in accordance with law. Needless to say, the assessee shall be afforded a reasonable opportunity of being heard in the set-aside proceedings. Accordingly, the appeal of the assessee is allowed for statistical purposes on this limited issue. 7. In the result, the appeal of the assessee bearing ITA No.9018/M/2025 is allowed for statistical purpose.