SAJJAPURAM PRIMARY AGRICULTURAL CO OPERATIVE CREDIT SOCIETY LIMITED,ONGOLE vs. ITO, WARD-1, ONGOLE

आयकर अपील�य अ�धकरण, हैदराबाद पीठ�, हैदराबाद INCOME TAX APPELLATE TRIBUNAL, HYDERABAD “A-SMC”-BENCH, HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.Nos.2461 & 2462/Hyd./2025 Assessment Years 2018-2019 & 2019-2020 Sajjapuram Primary Agricultural Cooperative The Income Tax Officer, Credit Society Limited, Ward-1, Rodhan Plaza, Sajjapuram (v), vs. Ram Nagar, ONGOLE. Santhamaguluru Post, PIN – 523 001. Prakasam District. Andhra Pradesh. PIN – 523 302. PAN AAHAS0325A (Appellant) (Respondent)

For Assessee : Sri Siva Rama Krishna R CA For Revenue : MS Payal Gupta, Sr. AR

Date of Hearing : 03.06.2026 Date of Pronouncement : 10.06.2026 ORDER PER VIJAY PAL RAO, VICE PRESIDENT :

These two appeals by the Assessee are directed against the two separate Orders both dated 27.10.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short

2 ITA.Nos.2461 & 2462/Hyd./2025 "NFAC"], Delhi, for the assessment years 2018-2019 and 2019-2020, respectively.

1) “The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2) The learned Commissioner of Income Tax (Appeals) is not justified in disallowing deduction under section 80P even though the delay in filing the return of income was condoned by CCIT, Hyderabad. 3) The learned Commissioner of Income Tax (Appeals) is not justified in holding that the deduction u/s 80P(2)(a)(i) would not be available to interest received from deposits/savings account kept with other cooperative societies/banks which are governed by RBI Banking Regulation Act and schedule commercial banks. 4) The learned Commissioner of Income Tax (Appeals) is not justified in holding that the deduction u/s 80P would not be available to commission received for marketing agriculture produce produced grown by members. 5) The appellant craves leave to add to, alter, amend, modify, delete, all OR any of the above grounds of appeal.”

3 ITA.Nos.2461 & 2462/Hyd./2025 2.1. The assessee has also filed a petition for admission of additional grounds. The additional grounds raised by the assessee are as under:

a) Invalid sanction under Section 151 of the Act: The notice under Section 148 dated 09.04.2022 has been issued beyond three years from the end of the relevant assessment year. Therefore, as per Section 151(ii), prior approval of the specified authority (i.e., Principal Chief Commissioner/Principal Director General/ Chief Commissioner/ Director General) is mandatory. In the present case, the approval obtained is not in accordance with the mandate of Section 151(ii), rendering the notice issued under Section 148 invalid and void ab initio. Consequently, the entire reassessment proceedings deserve to be quashed. Hon'ble High Court of Telangana took this view in their order dated 25.09.2025 in Deloittee Consulting India (P.) Ltd. vs. Assessment Unit, Income-tax Department, National Faceless Assessment Center, New Delhi [2025] 178 taxmann.com 781 (Telangana)[25-09-2025). b) Lack of jurisdiction - Notice issued by Jurisdictional Assessing Officer (JAO): The notice under Section 148 dated 09.04.2022 has been issued by the jurisdictional Assessing Officer (ITO, Ward-1, Ongole). However, as per Section 144B read with Section 151A of the Act and the Income Escapement Assessment Scheme, 2022, the power to issue such notice vests with the Faceless Assessing Officer (FAO) through National Assessment Centre (NFAC). Hence, the notice issued by the JAO without jurisdiction is invalid, and the consequent assessment is liable to

4 ITA.Nos.2461 & 2462/Hyd./2025 be quashed. Hon'ble High Court of Telangana took this view in their order dated 14.09.2023 in Kankanala Ravindra Reddy vs. Income- tax Officer [2023] 156 taxmann.com 178 (TELANGANA)/[2023] 295 Taxman 652 (TELANGANA)[14-09-2023]”.

5 ITA.Nos.2461 & 2462/Hyd./2025 4. On the other hand, the learned DR has objected to the admission of the additional ground and submitted that the assessee has not explained the reasons which have prevented the assessee from raising this issue before the authorities below. Therefore, the additional grounds raised by the assessee for the first time before the Tribunal cannot be entertained and admitted.

6 ITA.Nos.2461 & 2462/Hyd./2025 circumstances of the case, we find that the additional grounds raised by the assessee is purely legal in nature and can be adjudicated on the basis of the facts and material already available on record and therefore, in light of Hon'ble Supreme Court in the case of in the case of NTPC vs. cIT (supra), the additional grounds raised by the assessee are admitted for adjudication.

7 ITA.Nos.2461 & 2462/Hyd./2025 Tax [in short “CCIT”] as required u/sec.151(ii) of the Act. Thus, the Order passed by the Assessing Officer u/sec.148A(d) as well as notice u/sec.148 of the Act are invalid due to invalid approval and consequently, the re- assessment order passed by the Assessing Officer is vitiated. In support of his contention, the learned Authorised Representative for the Assessee has relied upon the Judgment of Hon’ble jurisdictional High Court in the case of Deloittee Consulting India (P.) Ltd., vs., Assessment Unit, Income Tax Department, National Faceless Assessment Centre, New Delhi [2025] 178 taxmann.com 781 (Telangana-HC) as well as the Order of ITAT, Hyderabad in the case of Vijaya Malisetty, Khammam vs. ITO, Ward-1, Khammam in ITA.No.1141/Hyd./2025, dated 25.03.2026.

8 ITA.Nos.2461 & 2462/Hyd./2025 24.03.2022 and thereafter, passed the Order u/sec.148A(d) on 08.04.2022 after taking the approval of Pr. CIT, Vijayawada as stated in Para no.6 of the said order as under:

“6. This order is passed with the prior approval of the Principal Commissioner of Income Tax, VIJAYAWADA.” 8.1. Thereafter, the Assessing Officer has issued notice u/sec.148 of the Act on 09.04.2022 which reads as under:

9 ITA.Nos.2461 & 2462/Hyd./2025 8.2. Thus, as per Para no.3 of the said notice, the Assessing Officer has taken prior approval of the Pr. CIT. There is no doubt that the notice u/sec.148 was issued by the Assessing Officer after 03 years from the end of the assessment year under consideration. Therefore, the Competent Authority to grant approval for issuing notice u/sec.148 as per sec.151(ii) of the Act is CCIT and not Pr. CIT. An identical issue has been considered by the Hon’ble jurisdictional Telangana High Court in the case of Deloittee Consulting India (P.) Ltd., vs. Assessment Unit Income Tax Department, National Faceless Assessment Centre, New Delhi (supra) in Para nos.48 to 50 as under:

“48. The proviso to Section 151 has been introduced by the Finance Act, 2023 with effect from 01.04.2023. The relevant Section 151 with its proviso is applicable to the case of the petitioner is quoted hereunder: 151. Sanction for issue of notice:- Specified authority for the purposes of Section 148 and Section 148A shall be,- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year.

10 ITA.Nos.2461 & 2462/Hyd./2025 (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year. Provided that the period of three years for the purposes of clause (1) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of Section 149. 49. In the present case, the order under Section 148A(d) and notice under Section 148 have been issued on 07.04.2022 relatable to the relevant Assessment Year 201819 i.e., after more than three years from the end of the relevant assessment year. The approval before passing the order under Section 148A(d) of the Act and before issuing of notice under Section 148 of the Act has been taken from the Principal Commissioner of Income Tax by the respondent No.1, which is permissible only if three years or less than three years have lapsed from the end of the relevant assessment year. In the present case, the relevant three years lapsed on 31.03.2022. Therefore, the prior approval of the Principal Chief Commissioner or Principal Director General or the Chief Commissioner or the Director General was required to be obtained before passing of the order under Section 148A(d) or before issuance of the notice under Section 148 of the Act. 50. Learned counsel for the respondent has relied upon the proviso to Section 151 of the Act inserted by the Finance Act, 2023 with effect from 01.04.2023 quoted above to contend that the period of seven days furnished to the assessee to submit reply to the notice under Section 148A(b) issued on 23.03.2022 has to be excluded for counting the period of three years. It is submitted that

11 ITA.Nos.2461 & 2462/Hyd./2025 the proviso is clarificatory in nature and as such, it would operate from the date when the amended Section 151 was brought into force i.e., 01.04.2021. However, such a contention is fit to be rejected since the proviso to Section 151 has been inserted by the Finance Act, 2023 only with effect from 01.04.2023. It, therefore, cannot be applied retrospectively to exclude the period of seven days in furnishing the reply to the notice under Section 148A(b) of the Act by the assessee. The Assessing Officer could not have assumed exclusion of such a period while passing the order under Section 148A(d) of the Act or issuing notice under Section 148 of the Act on 07.04.2022 that such a proviso excluding the period consumed in furnishing the reply is going to be brought into the statute book by amendment by the Finance Act, 2023 with effect from 01.04.2023. In taxing statutes, intendment cannot be assumed unless specifically expressed in the provision enacted by the legislature. Therefore, the reopening of assessment without sanction/approval of the specified authority in accordance with Section 151 of the Act was bad in law. Consequently, reassessment order dated 16.01.2024 also is bad in law.” 8.3. Thus, on identical facts the Hon’ble jurisdictional High Court has held that the notice issued u/sec.148 of the Act dated 07.04.2022 which is after three years from the end of the assessment year by taking the prior approval from the Pr. CIT is invalid and bad in law and consequently, the re- assessment order passed by the Assessing Officer is also bad in law. By following the above Judgment of Hon’ble jurisdictional High Court, the Coordinate Bench of ITAT,

12 ITA.Nos.2461 & 2462/Hyd./2025 Hyderabad in the case of Vijaya Malisetty, Khammam vs. ITO, Ward-1, Khammam (supra) has held in Para nos.14 to 16 as under:

“14. At this stage, we may herein observe that our aforesaid view that in a case where a period of more than three years have elapsed from the end of the relevant assessment year, then, approval for issuing the notice under section 148 of the Act has to be taken from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General for issuing the notice under section 148 of the Act is supported by the recent judgment of the Hon’ble High Court of Telangana in Deloitte Consulting India Private Limited vs. The Assessment Unit, Income Tax Department, Civil Writ Petition No. 4061 of 2024, dated 25/09/2025. For the sake of clarity, we deem it apposite to cull out the observations of the Hon’ble jurisdictional High Court in the case of Deloitte Consulting India Private Limited vs. The Assessment Unit, Income Tax Department (supra), as under: “48. The proviso to Section 151 has been introduced by the Finance Act, 2023 with effect from 01.04.2023. The relevant Section 151 with its proviso is applicable to the case of the petitioner is quoted hereunder: 151. Sanction for issue of notice:- Specified authority for the purposes of Section 148 and Section 148A shall be,- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year;

13 ITA.Nos.2461 & 2462/Hyd./2025 (ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year: Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of Section 149. 49. In the present case, the order under Section 148A(d) and notice under Section 148 have been issued on 07.04.2022 relatable to the relevant Assessment Year 2018- 19 i.e., after more than three years from the end of the relevant assessment year. The approval before passing the order under Section 148A(d) of the Act and before issuing of notice under Section 148 of the Act has been taken from the Principal Commissioner of Income Tax by the respondent No.1, which is permissible only if three years or less than three years have lapsed from the end of the relevant assessment year. In the present case, the relevant three years lapsed on 31.03.2022. Therefore, the prior approval of the Principal Chief Commissioner or Principal Director General or the Chief Commissioner or the Director General was required to be obtained before passing of the order under Section 148A(d) or before issuance of the notice under Section 148 of the Act. 50. Learned counsel for the respondent has relied upon the proviso to Section 151 of the Act inserted by the Finance Act, 2023 with effect from 01.04.2023 quoted above to contend that the period of seven days furnished to the assessee to submit reply to the notice under Section 148A(b) issued on 23.03.2022 has to be excluded for counting the period of three years. It is submitted that the proviso is clarificatory in nature and as such, it would operate from the date when the amended Section

14 ITA.Nos.2461 & 2462/Hyd./2025 151 was brought into force i.e., 01.04.2021. However, such a contention is fit to be rejected since the proviso to Section 151 has been inserted by the Finance Act, 2023 only with effect from 01.04.2023. It, therefore, cannot be applied retrospectively to exclude the period of seven days in furnishing the reply to the notice under Section 148A(b) of the Act by the assessee. The Assessing Officer could not have assumed exclusion of such a period while passing the order under Section 148A(d) of the Act or issuing notice under Section 148 of the Act on 07.04.2022 that such a proviso excluding the period consumed in furnishing the reply is going to be brought into the statute book by amendment by the Finance Act, 2023 with effect from 01.04.2023. In taxing statutes, intendment cannot be assumed unless specifically expressed in the provision enacted by the legislature. Therefore, the reopening of assessment without sanction/approval of the specified authority in accordance with Section 151 of the Act was bad in law. Consequently, reassessment order dated 16.01.2024 also is bad in law.” (emphasis supplied by us) 15. We find that the Hon’ble High Court in its aforesaid order had not only observed that in the case of the assessee before them ie., for AY 2018-19, the specified authority for granting approval under section 151 of the Act was the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General as a period of more than three years had lapsed from the end of the relevant Assessment Year, but had also rejected the claim of the revenue that the “proviso” to section 151 of the Act as had been made available on the statute vide the Finance Act, 2023 w.e.f. 01/04/2023 was to be given a retrospective effect.

15 ITA.Nos.2461 & 2462/Hyd./2025 16. We, thus, in terms of our aforesaid observation, concur with the Ld. AR that in the present case before us for A.Y. 2018-19, wherein notice under Section 148 of the Act was issued on 07.04.2022, i.e., beyond a period of three years from the end of the assessment year, the A.O. was statutorily obligated to have obtained the approval from either of the authorities specified u/s. 151(ii) of the law as was then available on the statute, viz. Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General. However, as the A.O. had obtained the approval from the Pr. Commissioner of Income Tax, i.e. an authority who was not vested with any jurisdiction as per the mandate of Section 151 of the Act (as made available on the statute w.e.f 01.04.2021), therefore, the assessment so framed by him u/s.147 r.w.s. 144 r.w.s 144B of the Act, dated 13/02/2024, being devoid and bereft of any valid assumption of jurisdiction, is liable to be quashed. Accordingly, we quash the assessment framed by the A.O. under Section 147 r.w.s 144 r.w.s 144B of the Act, dated 13.02.2024, in terms of our aforesaid observations.”

8.4. Accordingly, by following the Judgment of Hon’ble jurisdictional High Court as well as the decision of Coordinate Bench of this Tribunal (supra), we hold that the notice issued by the Assessing Officer on 09.04.2024 u/sec.148 of the Act after three years from the end of the assessment year under consideration by taking the prior approval from the Pr. CIT is invalid and liable to be quashed. We Order accordingly.

16 ITA.Nos.2461 & 2462/Hyd./2025 9. Since we have quashed the notice issued u/sec.148 of the Act as invalid which vitiates the re- assessment order passed by the Assessing Officer therefore, we do not propose to take-up other grounds raised by the assessee.

ITA.No.2462/Hyd./2025 – A.Y. 2019-2020:

“The order of the learned Commissioner of Income Tax (Appeals) 1) is contrary to the facts and also the law applicable to the facts of the case.

2) The learned Commissioner of Income Tax (Appeals) is not justified in disallowing deduction under section 80P even though the delay in filing the return of income was condoned by CCIT, Hyderabad.

3) The learned Commissioner of Income Tax (Appeals) is not justified in holding that the deduction u/s 80P(2)(a)(i) would not be available to interest received from deposits/savings account kept with other cooperative societies/banks which are governed by RBI Banking Regulation Act and schedule commercial banks.

4) The learned Commissioner of Income Tax (Appeals) is not justified in holding that the deduction u/s 80P would not be available to commission received for marketing agriculture produce produced grown by members.

17 ITA.Nos.2461 & 2462/Hyd./2025

5) The appellant craves leave to add to, alter, amend, modify, delete, all OR any of the above grounds of appeal.”

11.1. The assessee has also raised an additional ground by filing a petition which reads as under:

“PETITION FOR ADMISSION OF ADDITIONAL GROUND 1. In the case of the appellant, the assessment u/s 147 r.w.s 144B of the Act was completed on 20.03.2024, wherein the income was assessed at Rs.16,06,243/-by

a. Disallowing deduction u/s 80P of the Act and b. Making addition towards: i. Interest received from The Prakasam District Cooperative Central Bank limited; and ii. Commission Received from AP State COOP Marketing Federation Ltd.

18 ITA.Nos.2461 & 2462/Hyd./2025 without jurisdiction is invalid, and consequent assessment is liable to be quashed. Hon'ble High Court of Telangana took this view in their order dated 14.09.2023 in Kankanala Ravindra Reddy VS. Income-tax Officer [2023] 156 taxmann.com 178 (TELANGANA)/[2023] 295 Taxman 652 (TELANGANA) [14-09- 2023] 4. The above ground was not raised before the lower authorities purely due to inadvertence and the omission/failure was neither intentional nor deliberate. Moreover, the issue raised is legal in nature and all the relevant facts are already on record. Hence, the appellant humbly prays that the following additional ground of appeal may kindly be admitted and adjudicated, since all the material facts relating to this ground are already on record.”

19 ITA.Nos.2461 & 2462/Hyd./2025 consequently, the assessee is eligible for deduction u/sec.80P of the Act.

20 ITA.Nos.2461 & 2462/Hyd./2025 Bank which is eligible for deduction u/sec.80P of the Act. In support of his contention, he has relied upon the following decisions:

i. Order of ITAT, Hyderabad A-Bench in the case of Andhra Pragati Farmers Service Coop. Society vs. ITO in Miscellaneous Application.No.10/Hyd./ 2024 in ITA.No.661/Hyd./2022, dated 04.03.2025. ii. Judgment of Hon’ble Andhra Pradesh High Court in the case of Vavveru Cooperative Rural Bank Ltd. Vs. Chief Commissioner of Income Tax [2017] 396 ITR 371 (A.P & Telangana-HC). iii. Order of ITAT B-Bench, Hyderabad in the case of ACIT vs. Ranga Reddy District Judicial Employee Mutually Aided Co-operative Society in ITA.No.1264 & 1269/Hyd./2024, dated 30.04.2025.

14.1. Thus, the learned Authorised Representative for the Assessee has submitted that the entire income of the assessee is eligible for deduction u/sec.80P of the Act.

21 ITA.Nos.2461 & 2462/Hyd./2025 has denied the claim of deduction u/sec.80P on the ground that the assessee has not filed the return of income withinthe due date of filing the return u/sec.139(1) of the Act. The Assessing Officer has also assessed the interest income received by the assessee from Prakasam DCCBL as income from other sources. The learned CIT(A) has upheld the Order of the Assessing Officer on similar reasoning as there is a delay in filing the return of income. Now the delay in filing the return of income has been condoned by the CCIT vide Order dated 10.02.2025 which reads as under:

22 ITA.Nos.2461 & 2462/Hyd./2025

23 ITA.Nos.2461 & 2462/Hyd./2025 15.1. Accordingly, in view of the subsequent development that the delay in filing the return of income has been condoned by the CCIT the claim of the assessee u/sec.80P of the Act has to be allowed in respect of the income of the assessee from main business activity as well as the interest earned by the assessee from Cooperative Bank. On the issue of deduction u/sec.80P of the Act allowable in respect of the interest earned from Cooperative Bank has been considered by this Tribunal in the case of ACIT, Circle- 9(1), Hyderabad vs. Ranga Reddy District Judl. Employee Mutually Aided Co-operative Society, Hyderabad (supra), in Para nos.17 and 18 as under:

24 ITA.Nos.2461 & 2462/Hyd./2025 co-operative banks pursuant to the insertion of sub-section (4) to Section 80P would be no more entitled for claiming deduction under Section 80P of the Act, but as 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 co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Section 80P(2)(d) of the Act. Our aforesaid view is supported by the order of a co-ordinate bench of the Tribunal, i.e ITAT, Mumbai in the case of Solitaire CHS Ltd. Vs. Pr. CIT-26, Mumbai, ITA No. 3155/Mum/2019, dated 29.11.2019, wherein it was held as under: "6. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Our indulgence in the present appeal has been sought, for adjudicating, as to whether the claim of the assessee for deduction under section 80P(2)(d) in respect of interest income earned from the investments/deposits made with the co-operative banks is in order, or not. In our considered view, the issue involved in the present appeal revolves around the adjudication of the scope and gamut of sub-section (4) of Sec. 80P as had been made available on the statute, vide the Finance Act 2006, with effect from 01.04.2007. On a perusal of the order passed by the Pr. CIT under Sec. 263 of the Act, we find, that he was of the view that pursuant to insertion of sub-section (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2)(d) in respect of the interest income that was earned on the

25 ITA.Nos.2461 & 2462/Hyd./2025 amounts which were parked as investments/deposits with co- operative banks, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. Observing, that the co-operative banks from where the assessee was in receipt of interest income were not co-operative societies, the Pr. CIT was of the view that the interest income earned on such investments/deposits would not be eligible for deduction under Sec. 80P(2)(d) of the Act. 7. After necessary deliberations, we are unable to persuade ourselves to be in agreement with the view taken by the A.O. Before proceeding any further, we may herein reproduce the relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. "80P(2)(d) (1). Where in the case of an assessee being a co- operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2). The sums referred to in sub-section (1) shall be the following, namely: (a)..-….. (b)…… (c)…..

26 ITA.Nos.2461 & 2462/Hyd./2025 (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co- operative society, the whole of such income;" On a perusal of Sec. 80P(2)(d), it can safely be gathered that interest income derived by an assessee co-operative society from its investments held with any other co-operative society shall be deducted in computing its total income. We may herein observe, that what is relevant for claim of deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other co-operative society. We are in agreement with the view taken by the Pr. CIT, that with the insertion of sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. However, at the same time, we are unable to subscribe to his view that the aforesaid amendment would jeopardise the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its interest income on investments/deposits parked with a co-operative bank. In our considered view, as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We find that the term co-operative society" had been defined under Sec. 2(19) of the Act, as under:-

27 ITA.Nos.2461 & 2462/Hyd./2025 "(19) "Co-operative society" means 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 co-operative societies;" We are of the considered view, that though the co-operative banks pursuant to the insertion of sub-section (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as 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 co-operative societies, therefore, the interest income derived by a co-operative 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. 8. We shall now advert to the judicial pronouncements that have been relied upon by the Id. A.R. We find that the issue that a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income derived from its investments held with a co-operative bank is covered in favour of the assessee in the following cases: (i) Land and Co-operative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum) (ii) M/s C. Green Co-operative Housing and Society Ltd. Vs. ITO- 21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31.03.2017

28 ITA.Nos.2461 & 2462/Hyd./2025 (iii) Marvwanjee Cama Park Co-operative Housing Society Ltd. Vs. ITO-Range-20(2)(2), Mumbai (ITA No. 6139/Mum/2014, dated 27.09.2017. (iv). Kaliandas Udyog Bhavan Pemises Co-op. Society Ltd. Vs. ITO, 21(2)(1), Mumbai We further find that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Co-operative Sale Society (2017) 392 ITR 74 (Karn) and Hon'ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), had held, that the interest income earned by the assessee on its investments with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28.12.2006, also makes it clear beyond any scope of doubt that the purpose behind enactment of sub-section (4) of Sec. 80P was that the co-operative banks which were functioning at par with other banks would no more be entitled for claim of deduction under Sec. 80P(4) of the Act. Although, in all fairness, we may herein observe that the Hon'ble High Court of Karnataka in the case of Pr. CIT Vs. Totagars co-operative Sale Society (2017) 395 ITR 611 (Karn), had concluded that a co- operative society would not be entitled to claim of deduction under Sec. 80P(2)(d). At the same time, we find, that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Co-operative Sale Society (2017) 392 ITR 74 (Karn) and Hon'ble High Court Page |6 M/s Solitaire CHS Ltd. Vs. Pr. Commissioner of Income-tax-26 of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), had observed, that the interest income earned by a co-operative society

29 ITA.Nos.2461 & 2462/Hyd./2025 on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. We find that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. Vs. Siemens India Ltd. and Anr (1985) 156 ITR 11 (Bom), where there is a conflict between the decisions of non-jurisdictional High Court"s, then a view which is in favour of the assessee is to be preferred as against that taken against him. Accordingly, taking support from the aforesaid judicial pronouncement of the Hon'ble High Court of jurisdiction, we respectfully follow the view taken by the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Co-operative Sale Society (2017) 392 ITR 74 (Karn) and Hon'ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), wherein it was observed that the interest income earned by a co- operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act." 18. We thus, in terms of our aforesaid observations find no infirmity in the view taken by the CIT(A) who had rightly vacated the disallowance of the claim of the assessee society for the deduction u/s 80P(2)(d) of the interest income of Rs. 1,04,92,276/- on its deposits with the co-operative banks, viz. (i). Deccan Gramin Bank; and (ii). AP Grameen Vikas Bank. The Grounds of appeal Nos.3 and 4 are dismissed in terms of our aforesaid observations.”

15.2. Accordingly, the impugned order of the learned CIT(A) is set-aside and the matter is remanded to the record of the Assessing Officer to consider the claim of deduction of

30 ITA.Nos.2461 & 2462/Hyd./2025 the assessee u/sec.80P of the Act in light of the Order of the CCIT condoning the delay in filing the return of income. The Assessing Officer is also directed to allow the interest income of the assessee if any, earned from the Cooperative Bank.

31 ITA.Nos.2461 & 2462/Hyd./2025 Order pronounced in the open court on this the 10th day of June, 2026.

Sd/- Sd/- MANJUNATHA G. VIJAY PAL RAO ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, dated 10th June, 2026 VBP Copy to: Sajjapuram Primary Agricultural Cooperative Credit 1 Society Limited, Sajjapuram (v), Santhamaguluru Post, Prakasam District. PIN – 523 302. 2 The Income Tax Officer, Ward-1, Rodhan Plaza, Ram Nagar, ONGOLE – 523 001. Andhra Pradesh. 3 THE Pr. CIT, Guntur. 4 THE D.R., ITAT, A-SMC-BENCH, HYDERABAD. 5 GUARD FILE

//TRUE COPY// Digitally signed VADREVU by VADREVU PRASADA RAO PRASADA Date: RAO ASSISTANT REGISTRAR / 2026.06.10 I.T.A.T., HYDERABAD 15:40:17 +05'30'