ORDINANCE DEPT EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LIMITED NO. 02,PUNE vs. INCOME TAX OFFICER, WARD 9(3), PUNE, PUNE

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.964 & 965/PUN/2026 िनधा�रण वष� / Assessment Years : 2018-19 & 2020-21 Ordinance Dept. Employees Vs. ITO, Ward-9(3), Pune. Co-operative Credit Society Limited No.2, Talegaon, Maval, Pune- 410507. PAN : AAAAO1395D Appellant Respondent Assessee by : Ms. Yashvi Jariwala Revenue by Shri Pramod Shahakar : Date of hearing : 11.05.2026 Date of pronouncement : 26.05.2026 आदेश / ORDER PER VINAY BHAMORE, JM: These appeals filed by the assessee are directed against the separate orders dated 26.12.2025 passed by Ld. CIT(A)/NFAC for the assessment years 2018-19 and 2020-21 respectively. 2. Since identical facts and common issues are involved in both the above captioned appeals of the assessee, therefore, we proceed to dispose of the same by this common order.

2 ITA Nos.964 & 965/PUN/2026 3. First, we shall take up the appeal of the assessee in ITA No.964/PUN/2026 for A.Y. 2018-19 for adjudication as the lead case. ITA No.964/PUN/2026, A.Y. 2018-19 : 4. The appellant has raised the following grounds of appeal :- “1. The Hon. CIT(A), NFAC, Delhi while passing the Order has wrongly confirmed the Disallowance made by the Ld. Assessing Officer of Deduction u/s. 80P(2)(a)(i) of the Income Tax Act, 1961 amounting to Rs.48,87,975/-. 2. Alternatively, The Hon. CIT(A), NFAC, Delhi wrongly disallowed the Interest & Dividend Income earned by the Appellant Society which is eligible u/s. 80P(2)(d) of the Income Tax Act, 1961 by invoking provision of Section 80P(4) of the Income Tax Act, 1961. 3. The Hon. CIT(A), NFAC, Delhi, while passing the Order erred in applying Case Laws which have different facts as compared to the facts of the Appellant’s Society. 4. The Hon. CIT(A), NFAC, Delhi did not follow the Principle of Natural Justice. 5. Appellant craves leave to add, delete, amend, alter, vary and/or withdraw all or any of the grounds of appeal before or at the time of hearing of this appeal.” 5. Facts of the case, in brief, are that the assessee is a credit cooperative society registered under the Maharashtra Co-operative Societies Act, 1960 and is engaged in the business of providing credit facilities to its members and accepting deposits from them. The return of income was filed on 04.10.2018 declaring an income of Rs.Nil after claiming deduction of Rs.48,87,975/- u/s 80P(2)(a)(i) of the IT Act. Subsequently, the case was selected for

3 ITA Nos.964 & 965/PUN/2026 scrutiny through CASS. After considering the reply and submissions, the Assessing Officer vide order dated 23.02.2021 completed the assessment proceedings u/s 143(3) r.w.s. 143(3A) & 143(3B) of the IT Act by determining income of the assessee at Rs.48,87,975/- as against the income of Rs.Nil returned by the assessee. The above assessed income includes addition of Rs.48,87,980/- being interest and dividend income received from cooperative banks. 6. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee. 7. It is the above order against which the assessee is in appeal before this Tribunal. 8. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper books furnished by the assessee. In this regard, we find that the Assessing Officer disallowed the deduction u/s 80P(2)(a)(i) of the IT Act and made addition of Rs.48,87,975/-. Ld. CIT(A)/NFAC also confirmed the same by referring the provisions of section 80P(4) of the IT Act and also relying on judgement of Hon’ble

4 ITA Nos.964 & 965/PUN/2026 Supreme Court passed in case of Totgars Co-operative Sales Society Ltd., 322 ITR 283 (SC). 9. In this regard, we find that section 80P(4) of the IT Act excludes cooperative banks to claim any deduction u/s 80P of the IT Act. However, at the same time, we find that in the instant case in hand, the assessee is not a cooperative bank rather a credit cooperative society which is entitled to claim deduction u/s 80P of the IT Act. It is worthwhile to mention here that the Assessing Officer has disallowed the deduction u/s 80P(2)(a)(i) of the IT Act and Ld. CIT(A)/NFAC also negated the alternate claim of deduction u/s 80P(2)(d) of the IT Act being interest and dividend income received from other cooperative banks/societies. 10. It has been consistently held by various coordinate benches of this Tribunal that the credit cooperative societies are eligible for deduction u/s 80P(2)(a)(i) and 80P(2)(d) of the IT Act with regard to interest and dividend income received from other cooperative banks and societies. In this regard, we find support from the decision of coordinate bench of this Tribunal in the case of Marathwada Krishi Vidyapeeth Karmachari Sahkari Patsanstha Ltd. in ITA No.102/PUN/2020 order dated 21.12.2022 wherein the

5 ITA Nos.964 & 965/PUN/2026 Tribunal allowed the deduction u/s 80P(2)(a)(i) & 80P(2)(d) of the IT Act by observing as under :- “5. We have heard the rival submissions and gone through the relevant material on record. It is seen that all the cases are based on the ld. PCIT(s)’ understanding that the allowing of the deduction by the AO(s) u/s 80P is contrary to law. Insofar as the allowability of deduction u/s.8P(2)(a)(i) is concerned, we find that the Pune Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit Vs. The Pr.CIT (ITA No.713/PUN/2016) has decided the question of availability of deduction u/s 80P on interest income by noticing that the Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit Vs. ITO (ITA No.604/PN/2014) has allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed by the Hon’ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 Taxman 309 (Kar.) allowing deduction u/s. 80P on interest income and that of the Hon’ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT (2014) 110 DTR 89 (Delhi) not allowing deduction u/s.80P on interest income earned from banks. Both the Hon’ble High Courts took into consideration the ratio laid down in the case of Totgar’s Cooperative Sale Society Ltd. (supra). No direct judgment from the Hon’ble jurisdictional High Court on the point having been pointed out, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). The position continues to remain the same before this Tribunal also. We thus hold that no exception can be taken to the granting of deduction on interest income by the AO u/s 80P(2)(a)(i) of the Act 6. Coming to the other cases involving deduction u/s.80P(2)(d) of the Act, it is crystal clear from the language of the provision that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a cooperative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessees are also Co-operative society registered under the Act and hence qualify for the grant of the deduction. Similar view has been taken by the Pune Tribunal in

6 ITA Nos.964 & 965/PUN/2026 several cases including The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT (ITA No.203/PUN/2019) vide order dated 16- 11-2022). 7. In view of the foregoing, we hold that the impugned orders questioning the deduction u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income, cannot be sustained. 8. In the result, all the appeals are allowed.” 11. Respectfully following the above decision of coordinate bench of this Tribunal in the case of Marathwada Krishi Vidyapeeth Karmachari Sahkari Patsanstha Ltd. (supra) which is subsequent to the judgement in the case of Totgars Co-operative Sales Society Ltd. (supra) and the facts are also distinguishable, we are of the considered opinion that the assessee is eligible for deduction u/s 80P(2)(a)(i) and 80P(2)(d) of the IT Act. Accordingly, we set-aside the order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to allow the deduction of Rs.48,87,975/- u/s 80P(2)(a)(i) of the IT Act. Thus, the grounds of appeal raised by the assessee are allowed. 12. In the result, the appeal filed by the assessee in ITA No.964/PUN/2026 for A.Y. 2018-19 is allowed. ITA No.965/PUN/2026, A.Y. 2020-21 : 13. Since the facts and issues involved in the appeal of the assessee in ITA No.965/PUN/2026 for A.Y. 2020-21 are identical to the appeal of the assessee in ITA No.964/PUN/2026 for A.Y.

7 ITA Nos.964 & 965/PUN/2026 2018-19 therefore, our decision in ITA No.964/PUN/2026 for A.Y. 2018-19 shall apply mutatis mutandis to the appeal of the assessee in ITA No.965/PUN/2026 for A.Y. 2020-21. Accordingly, the appeal of the assessee in ITA No.965/PUN/2026 for A.Y. 2020-21 is also allowed. 14. In the result, the appeal filed by the assessee in ITA No.965/PUN/2026 for A.Y. 2020-21 is allowed. 15. To sum up, both the above captioned appeals filed by the assessee are allowed. Order pronounced on this 26th day of May, 2026. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 26th May, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.05.27 16:09:17 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब�च, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.