SATYAY THRIFT & CREDIT CO. OP. SOCIETY LIMITED,SURAT vs. ACIT CIRCLE-3(3), SURAT, SURAT

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ITA 146/SRT/2026Status: DisposedITAT Surat27 May 2026AY 2017-20184 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that interest income earned by a co-operative society on its investments held with another co-operative bank is eligible for deduction under Section 80P(2)(d). The disallowance by the lower authorities was deemed incorrect.

What were the facts?

The assessee, a credit co-operative society, claimed deduction under Section 80P(2)(d) on interest and dividend received from a co-operative bank. The Assessing Officer disallowed this claim, and the CIT(A) upheld the disallowance.

What were the issues?

Whether interest and dividend income received by a credit co-operative society from a co-operative bank is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80P(2)(d)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT ‘SMC’ BENCH, SURAT

Before: Ms. Suchitra Kamble

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT ‘SMC’ BENCH, SURAT (HYBRID HEARING) Before: Ms. Suchitra Kamble, Judicial Member

ITA No: 146/SRT/2026 Assessment Year: 2017-18

Satyay Thrift & Credit Co-op. ACIT, Society Limited, Vs Circle – 3(3), 9, 1st Floor Vasudev Surat Chamber, Varachha Road, Nr. Gitanjali Petrol Pump, Surat – 395006, Gujarat PAN: AACAS5831Q (Appellant) (Respondent)

: Shri Rushi Parekh, AR Appellant Represented : Shri Ajay Uke, Sr. DR Respondent Represented

Date of hearing : 26-03-2026 Date of pronouncement : 27-05-2026 आदेश/ORDER The appeal filed by the assessee is against the order passed by the Learned Commissioner of Income Tax (Appeals), Addl/JCIT(A)-1, [in short “CIT(A)”], Jaipur, dated 12.01.2026 for the Assessment Year (AY) 2017-18.

2.

The assessee has raised the following grounds of appeal: “1. That the CIT(A) erred in confirming the disallowance of deduction u/s 80P(2)(d) on Interest and dividend received from Co- op. Bank of Rs.2,48,319/-.

I.T.A No.146/SRT/2026/AY 2017-18 2 Satyay Thrift & Credit Co-op. Soc. Ltd. vs. ACIT

2.

That the deduction claimed u/s 80P(2)(d) of Rs.2,48,319/- may kindly be allowed. 3. The appellant craves leave to add, amend, alter, vary and/or withdraw any or all the above grounds of appeal.” 3. The assessee is Credit Co-operative Society and is providing credit facilities to its members only. The assessee filed return of income on 31.10.2017 declaring total income as NIL for A.Y. 2017- 18. The case was selected for limited scrutiny for the reason that ‘Large deduction under Chapter VI-A from total income’. Accordingly notice u/s 143(2) of the Income Tax Act, 1961 was issued on 28.08.2018 which was served upon the assessee. Subsequently notice u/s 142(1) of the Act was issued on various dates. The Assessing Officer observed that during the year under consideration, the assessee society claimed deduction u/s 80P of the Act amounting to Rs. 1,33,04,015/-. The Assessing Officer issued Show Cause notice and the assessee submitted the reply that it is in the business of granting of various credit facilities to its members and earns interest on the same. The assessee is not carrying out any other activity besides that. The Assessee society is earning interest from The Surat District Co-operative Bank Ltd. After taking cognizance of the reply, the Assessing Officer disallowed the claim of deduction u/s 80P(2)(d) of the Act and made addition of Rs. 1,98,319/-.

4.

Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

I.T.A No.146/SRT/2026/AY 2017-18 3 Satyay Thrift & Credit Co-op. Soc. Ltd. vs. ACIT

5.

The Ld. AR submitted that the assessee society received the interest and the dividend from the Surat District Co-operative Bank only and the Hon’ble jurisdictional High Court in case of Surat Vankar Sahkari Sangh Vs. ACIT (2016) 72 taxmann.com 169 (Gujarat) has categorically held that interest income earned by a cooperative Society on its investments held with the co-operative bank would be eligible for claim of deduction u/s 80P(2)(d) of the Act. The Ld. AR relied upon various cases laws of jurisdictional High Court as well as various others High Court.

6.

The Ld. DR relied upon the assessment order and the order of the CIT(A).

7.

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee society is registered society under Co-operative Society Act and is providing credit facility to its members only. Besides this, the assessee society is earning interest income from the Surat District Co-operative Bank which is also registered under Co- operative Society Act. The interest income earned from Co- operative Society cannot be equated with the interest earned from Commercial Bank. The Hon’ble Jurisdictional High Court in various decisions including that of Surat Vankar Sahakari Sangh (Supra) held the same. Therefore, the Assessing Officer as well as CIT(A) was not right in disallowing the deduction under Section 80P(2)(d) of the Act to the assessee society.

I.T.A No.146/SRT/2026/AY 2017-18 4 Satyay Thrift & Credit Co-op. Soc. Ltd. vs. ACIT

8.

In the result, the appeal of the assessee allowed.

Order pronounced in the open court on 27-05-2026

Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Surat Dated: 27/05/2026 SAMANTA** आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Surat 6. Guard file.

By order, // TRUE COPY // Assistant Registrar/Sr.PS/PS ITAT, Surat Bench

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