SHI vs. HAKTI NAGRI SAHAKARI PATSANSTHA MARAYADIT,PUNEVS.WARD NO -9(4), PUNE, PUNE

At the time of hearing, the Ld.AR brought to the knowledge of the bench that there is a delay 165 days in filing appeal before Hon'ble Tribunal and the assessee has filed an application and affidavit for condonation of delay. On consideration of facts and information mentioned in the affidavit, there is a reasonable cause explained and the Ld. DR. has no specific objections. Accordingly, the delay is condoned and the appeal is admitted and heard. 3. The brief facts of the case are that, the assessee is a Credit co- operative society engaged in the business of providing credit facilities to its members. The assessee has filed the return of income for the Assessment Year 2017-18 disclosing a total income of Rs. 27,22,586/- and after claiming deduction u/sec 80P(2)(a)(i) of the Act. Subsequently, the case was selected for scrutiny and issued notice u/sec 143(2) and u/sec142(1) of the Act was issued to the assessee and calling for the details in respect of the claims and information supporting the return of income filed by the assessee. The assesse has filed the information of members of the society along with interest income on deposits with the cooperative banks. The Assessing Officer (A.O) has dealt on the submissions/details of members and activities and find that the assessee is not eligible for claim of deduction under section 80P(2)(a)(i) of the Act and has not made separate disallowance of interest income on deposits with the cooperative banks. Finally, the A.O. was not satisfied with the explanations and dealt on the provisions and denied the claim of deduction u/sec80P2 (a)(i) of the act of and assessed the total income of Rs.27,22,586/- and passed the order u/sec 143(3) of the Act dated 17.09.2019.

Aggrieved by the order, the assessee has filed the appeal before the CIT(A) where the CIT(A) considered the grounds of appeal, statements of facts and findings of the Assessing Officer and issued notice and the assessee has filed the written submissions on the claim of deduction u/sec 80P2(a)(i) / u/sec 80P2(d) of the Act but the CIT(A) has confirmed the action of the AO and dismissed the appeal. Aggrieved by the order of the CIT(A), the assessee has filed appeal before the Hon’ble Tribunal.

At the time of hearing, Ld. AR submitted that the CIT(A) has erred in confirming the action of the AO in treating the interest income from cooperative banks is not eligible for deduction u/sec 80P2(a)(i) of the Act. The Ld. AR substantiated the submissions with the factual paper book and judicial decisions and prayed for allowing the appeal. Per Contra, Ld. DR relied on the order of the CIT(A).

We heard the rival submissions and perused the material on record. The Ld.AR submitted that the CIT(A) has erred in observing that the assessee is ineligible for deduction u/s.80P(2)(a)(i) of the Act or u/sec80P2(d) of the Act in respect of interest income earned from the cooperative banks. 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) has dealt and 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 grounds raised by the Revenue revolves around the issue of allowability of

We further find that the core issue of allowance of deduction u/s 80P(2) of the IT Act to a primary credit cooperative society was also decided by Hon’ble Jurisdictional Bombay High Court in the case of Anna saheb Patil Mathadi Kamgar Sahkari Path pedhi Ltd.in ITANo.933/2017 order dated 14-10-2019 wherein deduction u/s 80P(2) of the IT Act was allowed to a primary credit cooperative society. Subsequently, this Judgement was also approved by Hon’bleSupreme Court in Civil Appeal No.8719 of 2022 order dated April 20, 2023 by observing as under :- “1. Feeling aggrieved and dissatisfied with the impugned order dated 14-10-2019 passed by the High Court of Judicature at Bombay in ITA No. 933/2017, by which the High Court has dismissed the said appeal preferred by the Revenue, relying upon its earlier decision in the case of Quepem Urban Co-operative Credit Society Ltd. v. Asstt. CIT [2015] 58 taxmann.com 113/232 Taxman 510/377 ITR 272 (Bom.), the Revenue has preferred the present appeal. 2. The High Court considered the following question of law -

Respectfully following the above latest decision passed by Hon’ble Supreme Court cited supra, we are of the considered opinion that the issue of allowance of deduction u/s 80P(2) of the IT Act in favour of primary credit cooperative society has attained finality & therefore we do not find any error in the order passed by Ld. CIT(A)/NFAC with regard to allowance of deduction u/s 80P(2)(d) of the IT Act to the assessee on interest income earned from its investment from cooperative banks which are also cooperative societies. 18. In the result, the appeal filed by the Revenue is dismissed. 19. To sum up, the appeal filed by the Revenue is dismissed and the cross objection filed by the assessee is partly allowed, as indicated above.” 7. We consider the facts, circumstances, submissions and ratio of the judicial decisions dealt and follow the judicial precedence. Accordingly, we set aside the order of the CIT(A) and direct the Assessing Officer to allow the deduction u/sec.80P2(a)(i) of the Act in respect of interest income on deposits with the cooperative banks. And we allow the grounds of appeal in favour of the assessee.

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