SHRINIWAS SAHAKARI GRIHARACHANA SANSTHA LIMITED,PUNE vs. INCOME TAX OFFICER WARD 12(1), PUNE

आदेश /ORDER

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the Assessee against the order of the Learned Additional/Joint Commissioner of Income Tax (Appeals), Kochi [Ld. Addl./JCIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2021-22 on 25.03.2025.

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filed by the assessee, copy of Audited P&L, Balance sheet, Copy of registration certificate Copies of orders.

3.1 In this case the Assessee is a Registered Cooperative Society. The Assessee had filed Return of Income for AY 2021-22 on 22/10/2021 which is within the time allowed u/s 139(1) of the Act. Copy of the Complete Return of Income has been filed by Ld.AR. It is Observed that Assessee had shown Income as Under in the return of Income : Gross Total Income Rs.3,49,978/- Deduction under Chapter VI-A Rs.3,49,978/- Total Income Rs. NIL

Further in the Schedule OS of the Return of Income the assessee has shown as under : Saving Bank Interest Rs.7,149/- Interest on Deposits Rs.3,02,757/- Total Interest Rs.3,099,06/-

3.2 At page 25 of the Return of Income, Income from other sources is shown at Rs.309906/-. In Schedule CYLA of the Return the Assessee has shown Profit Rs.40072/-. Thus, the Total Income shown in the Return of Income was consisting of Interest Income and Profit. (309906+40072=349978/-).

3.3 The Assessee had filed Return of Income within the time allowed u/s 139(1) which is evident from the order u/s 143(1).

3.4 In the Order u/s 143(1) dated 16/11/2022 following things are mentioned:

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3.4.1 Thus, vide Order u/s 143(1) the CPC has allowed Assessee deduction claimed u/s 80P of the Act. The Total amount eligible for deduction u/s 80P of the Act as per CPC order u/s 143(1) of the Act is Rs.3,49,978/-.

3.5 Page 17 of the Order u/s 143(1) is reproduced as under:

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3.5.1 However, on page 17 of the Order u/s 143(1) the CPC has added Rs.309906/- which the CPC has allowed as deduction u/s80P of the Act. Thus, there seems to be inconsistencies in the CPC order passed u/s 143(1) of the Act. We have perused the entire order u/s 143(1) passed by CPC but NO where we could find any reasons given by CPC for the additions. Ld.DR also could not explain the reason for the additions.

3.6 As per the Audited financials filed by the Assessee, the Net Profit of Rs.349978/- consist of Rs.309906/- which is interest earned by the Assessee. We have already observed that CPC in the order u/s 143(1) has held that Assessee is eligible for deduction u/s 80P of Rs.349978/-.

3.7 In these facts and circumstances of the case we set aside the Order u/s 143(1) of the Act to the assessing officer for de-novo adjudication. The AO shall verify the Audited P&L Account. The AO shall allow the Assessee deduction u/s80P(d) on account of Interest Earned of Rs.309906/-. The Assessee has earned this interest from Pune District Central Co-Operative Bank(PDCC). Hence the said Interest Income is eligible for deduction u/s 80P(2)(d) of the Act , we find support from the following decisions of Hon’ble Karnataka High Court ,Hon’ble Gujarat High Court, Hon’ble Sikkim High Court.

3.8 The Hon’ble Karnataka High Court in the case of Principal Commissioner of Income-tax, Hubli v. Totagars Co-operative Sale Society IT APPEAL NO. 100069 OF 2016, 392 ITR 74 (Karnataka)[05-01-2017] has held as under : Quote, “8. The issue whether a Co-operative Bank is considered to be a Co- operative Society is no longer res integra.For the said issue has been decided by the ITAT itself in different cases. Moreover the word "Co- operativeSociety" are the words of a large extent, and denotes a genus, whereas the word "Co-operative Bank" is aword of limited extent, which merely demarcates and identifies a particular species of the genus Co- OperativeSocieties. Co-Operative Society can be of different nature, and can be involved in different activities; the Co-operative Society Bank is merely a variety of the Co-operative Societies. Thus the Co-operative Bank which is a species of the genus would necessarily be covered by the word "Co-operative Society". 9. Furthermore, even according to Section 56(i)(ccv) of the Banking Regulations Act, 1949, defines a primaryCo-Operative Society bank as the

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meaning of Co-Operative Society. Therefore, a Co-operative Society Bankwould be included in the words 'Co-operative Society'. 10. Admittedly, the interest which the assessee respondent had earned was from a Co-operative Society Bank.Therefore, according to Sec. 80P(2)(d) of the I.T. Act, the said amount of interest earned from a Co-operativeSociety Bank would be deductable from the gross income of the Co-operative Society in order to assess itstotal income. Therefore, the Assessing Officer was not justified in denying the said deduction to the assessee respondent. 11. The learned counsel has relied on the case of Totgars Co-operative Sale Society Ltd. v. ITO [2010] 322ITR 283/188 Taxman 282 (SC). However, the said case dealt with the interpretation, and the deduction, whichwould be applicable under Section 80P(2)(a)(i) of the I.T. Act. For, in the present case the interpretation that is required is of Section 80P(2)(d) of the I.T. Act and not Section 80P(2)(a)(i) of the I.T. Act. Therefore, the saidjudgment is inapplicable to the present case. Thus, neither of the two substantial questions of law canvassed by the learned counsel for the Revenue even arise in the present case. 12. For the reasons stated above, this Court does not find any merit in the present appeal. Hence, the appeal isdismissed.”Unquote.

3.9 Similarly Hon’ble HIGH COURT OF SIKKIM in the case of Sikkim State Cooperative Supply and Marketing Federation Ltd. v. Deputy Commissioner of Income-tax [2025] 181 taxmann.com 494 (SIKKIM) has held as under : Quote, “18. We are, therefore, of the view that in the facts of the instant case, the assessee is entitled to claim deduction under section 80P(2)(d) of the Income Tax Act, 1961.” Unquote.

3.10 Hon’ble HIGH COURT OF GUJARAT in the case of Principal Commissioner of Income-tax v. Ashwinkumar Arban Co Operative Society Ltd,[2024] 168 taxmann.com 314 (Gujarat) vide order 24 September 2024, after considering decision of Hon’ble Supreme Court, Hon’ble Karnataka High Court held that Interest earned by assessee co-operative society from deposits kept with Co-operative Bank is eligible for deduction u/s 80P(2)(d) of the Act.

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Order pronounced in the open Court on 30th June, 2026

Sd/- Sd/- (PAVAN KUMAR GADALE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER

पुणे/Pune; दिन ांक/Dated : 30-06-2026 Ravi Kumar Ravi Kumar Digitally signed by Ravi Kumar Date: 2026.06.30 15:24:41 +05'30' आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. The concerned Pr. CIT, Pune 4. DR, ITAT, ‘SMC’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण,पुणे / ITAT, Pune