VIVEKANAND SHIKSHAKANCHI SAHKARI PATSANSTHA MARYADIT KADA,BEED vs. INCOME TAX OFFICER WARD 1(5), AURANGABAD

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE, BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकरअपीलसं. / ITA No.693/PUN/2026 Assessment Year : 2018-19 Vivekanand Shikshakanchi ITO, Ward 1(5), Sahkari Patsanstha Maryadit Jeevan Suman, LIC Kada, Building, 2nd floor, At KADA, Post- Kada, Dist- Vs. CANNOUGHT Place, Beed-414202, Maharashtra. Town Centre, N-5 PAN-AAAAV4287B CIDCO, Jalgaon Road Aurangabad-431003, Maharashtra. Appellant Respondent : Assessee by None : Revenue by Shri Madhukar Anand, JCIT (Virtual) : Date of hearing 04.05.2026 Date of pronouncement : 06.05.2026 ORDER PER PAVAN KUMAR GADALE, JM: The assessee has filed an appeal against the order of NFAC/ CIT(A) passed u/sec 250 of the Income Tax Act. The assessee has raised the grounds of appeal challenging the order of the CIT(A) sustaining the denial of claim of deduction u/sec 80P(2)(a)(i) of the Income Tax Act. 2. The brief facts of the case are that, the assessee is a Employees Co-operative Credit Society and is registered under the Maharashtra State Co-operative Societies Act, 1960. The assessee has filed the return of income for the Assessment Year 2018-19 on 11.10.2018 disclosing a total income of Rs.NIL after claiming deduction u/sec.80P(2)(a)(i) of the Act Subsequently, the case was

ITA No.693/PUN/2026 Vivekanand Shikshakanchi Sahkari Patsanstha, Beed selected for scrutiny and notice u/sec 142(1) of the Act was issued. In compliance to notice, assessee has filed the information. The Assessing Officer(A.O)On perusal of the information find that the assessee has received interest income of Rs. 42,98,400/- from Maharashtra Gramin Bank and the Assessing officer is of the opinion that the assessee is not eligible for claim of deduction u/sec80P of the Act and made addition of Rs. 42,98,400/- under income from other sources and assessed the total income of Rs.42,98,400/- and passed the order u/sec 143(3) r.w.s. 143(3A) and 143(3B) of the Act dated 05.04.2021. 3. Aggrieved by the order of the CIT(A), the assessee has filed the appeal before the CIT(A). Whereas the CIT(A) has considered the grounds of appeal, statement of facts and findings of assessee and issued notice of hearing and assessee has filed the written submission on the claim of deduction u/se 80P2(a)(i) of the Act but the CIT(A) has confirmed the action of the AO and dismissed the appeal. 4. Aggrieved by the order of the CIT(A), the assessee has filed the appeal before the Hon’ble Tribunal. None appeared on behalf of assessee and the Ld.DR supported the order of CIT(A). 5. We heard the Ld.DR submissions and perused the material on record. The assessee in the grounds of appeal submitted that the CIT(A) has erred in observing that the interest income from cooperative is ineligible for Bank deduction u/s.80P(2)(a)(i) of the Act. We find the Hon’ble Tribunal in the revenue appeal ITO Ward.-5,Sangli Vs. Shree Ganesh Nagari Sahakari Pat Sanstha Maryadit (ITA No.2375/PUN/2025 & C.O. No.49/PUN/2025) held as under: “15. We have heard Ld. Counsels from both the sides and perused the material available on record. In this regard, we find that all the

ITA No.693/PUN/2026 Vivekanand Shikshakanchi Sahkari Patsanstha, Beed grounds raised by the Revenue revolves around the issue of allowability of deduction u/s 80P(2)(d) of the IT Act to primary credit cooperative society. In this regard, we find that in number of decisions passed by coordinate benches of this Tribunal it has been held that a primary credit cooperative society is eligible to claim deduction u/s 80P(2) of the IT Act on interest and dividend income earned from its investment with other cooperative banks which are also cooperative societies duly registered under Maharashtra State Cooperative Societies Act. In this regard, following decisions are relevant :- (i)GurudattaGraminBigersheti, ITA No.502/PUN/2025 order dated 28-07-2025. (ii)PuneJilaMadhyawartiSahkariBankSevakanchiSahkariPatsansth aMaryadit, ITA No.1086/PUN/2025 order dated 23-06-2025. (iii) SharadchandraNagariSahakariPatsansthaMaryadit,ITA No.1041/PUN/2025 order dated 04-06-2025.

ITA No.693/PUN/2026 Vivekanand Shikshakanchi Sahkari Patsanstha, Beed 2. The High Court considered the following question of law - "Whether on the facts and in the circumstances of the case and in law, the Tribunal is justified as claimed by the assessee on the ground that the assessee, a co-operative credit society and is not a bank for the purpose of Section 80P(4) of the Act?" 3. Apart from the fact that against the relied upon decision in the case of M/s. Quepem Urban Co-operative Credit Society Ltd. (supra),the Special Leave Petition has been dismissed, having heard learned counsel appearing on behalf of the respective parties, the issue involved in the present appeal is squarely covered against the Revenue in view of the decision of this Court in Mavilayi Service Co- operative Bank Ltd. v. CIT [2021] 123 taxmann.com 161/279 Taxman 75/431 ITR 1/[2021] 7 SCC 90. This Court, in the aforesaid decision has specifically observed and held that primary Agricultural Credit Societies cannot be termed as Co-operative Banks under the Banking Regulation Act and, therefore, such credit societies shall be entitled to exemption under section 80(P)(2) of the Income-tax Act, 1961. 4. Ms.AakanshaKaul, learned counsel appearing on behalf of the appellant/Revenue has tried to submit that the respondent/Assessee will fall under the definition of Co-operative Bank as their activity is to give credit/loan. However, it is required to be noted that merely giving credit to its members only cannot be said to be the Co-operative Banks/Banks under the Banking Regulation Act. The banking activities under the Banking Regulation Act are altogether different activities. There is a vast difference between the credit societies giving credit to their own members only and the Banks providing banking services including the credit to the public at large also. 5. There are concurrent findings recorded by CITA, ITAT and the High Court that the respondent/Assessee cannot be termed as Banks/Cooperative Banks and that being a credit society, they are

ITA No.693/PUN/2026 Vivekanand Shikshakanchi Sahkari Patsanstha, Beed entitled to exemption under section 80(P)(2) of the Income-tax Act. Such finding of fact is not required to be interfered with by this Court in exercise of powers under Article 136 of the Constitution of India. Even otherwise, on merits also and taking into consideration the CBDT Circulars and even the definition of Bank under the Banking Regulation Act, the respondent/Assessee cannot be said to be Co-operative Bank/Bank and, therefore, Section 80(P)(4) shall not be applicable and that the respondent/Assessee shall be entitled to exemption/benefit under section 80(P)(2) of the Income- tax Act. 6. In view of the above and for the reasons stated hereinabove, the present appeal deserves to be dismissed and is accordingly dismissed, answering the question against the Revenue and in favour of the Assessee.”

ITA No.693/PUN/2026 Vivekanand Shikshakanchi Sahkari Patsanstha, Beed deposits with the cooperative banks. And we allow the grounds of appeal in favour of the assessee. 7. In the result, the appeal filed by the assessee is allowed.

Order pronounced on this day of 06th May, 2026.

Sd/- Sd/- DIPAK P. RIPOTE PAVAN KUMAR GADALE (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) पुणे/ Pune; दिनांक/ Dated :06thMay, 2026. Abhishek आिेशकीप्र्ल्पअगे्े र/ Copy of the Order forwarded to : अपीलार्/ The Appellant. 1. प्यर्/ The Respondent. 2. 3. The Pr. CIT concerned. िभागीयप्र्न्ि, आयकरअपीलीयअ्िकरण, “SMC” बें, 4. पुणे/ DR, ITAT, “SMC” Bench, Pune. गार्फ़ाइल/ Guard File. 5. //True Copy// आिेशानुसार/ BY ORDER,

Assistant Registrar, आयकरअपीलीयअ्िकरण, पुणे/ ITAT, Pune.