PALI ZILA DUGDH UTPADAK SAHAKARI SANGH LTD,PALI vs. ITO , PALI

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ITA 987/JODH/2025Status: DisposedITAT Jodhpur21 May 2026AY 2020-214 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that interest income received by a cooperative society from another cooperative society is eligible for deduction under Section 80P(2)(d). The disallowance by the CIT(A) was considered perverse and against the law.

What were the facts?

The assessee, a cooperative society, claimed deduction under Section 80P(2)(d) for interest income received from another cooperative society. The CIT(A) disallowed this deduction, which the assessee challenged.

What were the issues?

Whether interest income earned by a cooperative society from another cooperative society 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, JODHPUR BENCH, JODHPUR

For Appellant: Shri Amit Kothari, CA (Virtual)
For Respondent: Smt. Ayushi Sharma, JCIT-DR (Virtual)

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 987/Jodh/2025 (Assessment Year – 2020-21) Pali Zila Dugdh Utpadak Income Tax Officer, Sahakari Sangh Ltd. Pali-Marwar-306401 Pali Saras Dairy, Sardar Patel Nagar, Pali-Marwar-306401 PAN No. AAAAP 0330 M Assessee by Shri Amit Kothari, CA (Virtual) Revenue by Smt. Ayushi Sharma, JCIT-DR (Virtual) Date of Hearing 07 / 05 / 2026. Date of Pronouncement 21 / 05 / 2026. ORDER DR. MITHA LAL MEENA, A.M.: This appeal is filed by assessee against the order of National Faceless Appeal Centre, Delhi [hereinafter referred to as NFAC/ CIT(A)] dated 18.09.2025 with respect to assessment year 2020-21 wherein the appellant has challenged disallowance of deduction claimed u/s 80P(2)(d) of the I.T. Act amounting to Rs. 96,01,215/- as bad in law.

2.

At the outset, the Ld. Counsel for the appellant submitted that the appeal of the assessee is covered case on the issue of claim of deduction of interest received by the appellant cooperative society from another cooperative society is eligible for deduction u/s 80P(2)(d) of the Act, in light of

2 ITA No. 987/Jodh/2025 Asst. Year: 2020-21 the decision delivered by the coordinate Bench on parity of facts in ITA No. 302/Jodh/2024 assessment year 2018-19 dated 24.12.2024 in the case of Kulthana Gram Seva Sahakari Samiti Ltd. Vs. ITO. The Ld. Counsel has referred to the relevant paras of the decision delivered by the Bench in the case of Kulthana Gram Seva Sahakari Samiti Ltd. Vs. ITO (supra) which reads as under:

“In the present case, the interest income is received by the appellant from entities enjoying the status of a co-operative society as per law. The issue is settled by the principle of law laid down by the Hon'ble Supreme Court in the case of the Pr. Commissioner of Income Tax 17, Mumbai Vs. M/S. Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited [Civil Appeal No. 8719/20221" Annexure A"; AP.B, Pages 1-4] wherein their lordships have held as :- "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 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 Circular 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 applicable and that the respondent/Assessee shall be entitled exemption/benefit under section 80(P) (2) of the Income Tax Act." The Jurisdictional ITAT, Amritsar Bench, Amritsar in a latest judgment in the case of "The Urapar Co-op. Agri, service Society Ltd, VPO Urapar, [dated 23/05/20231 following the principle of law laid down by the Honb'le Supreme Court(Supra)/[Annexure "A" has held that the society is entitled to deduction u/s. 80- P(2)(d) for interest income earned from other Co-op. Society, in ITA No: ITA No: 89/ASR/2021 [Annexure - "B", Pages 5-141] and in the case of the Jainpur Multipurpose Coop. Society Ltd; Vs. Income Tax Officer, Nawanshahr in ITA NO: 68/Asr/2024 [Annexure -"C", Pages 15-181]. Following the principle of law laid down by the Hon'ble Supreme Court (Supra) and our own judgement (Supra), we hold that the decision of the Ld. CIT(A) in denying the deduction to the assessee is perverse to the facts on record and against the spirit of law, in view of the provisions of sub section 4 of section 80(P) of the Income Tax Act,

3 ITA No. 987/Jodh/2025 Asst. Year: 2020-21 Therefore, the impugned order is annulled and accordingly, the deduction of Rs.54,00, 164/- claimed by the appellant u/s 80P(2)(d) is allowed. In the present case, the interest income is received by the appellant as a cooperative society from another co-operative society as per law. This issue is well settled as per the principle of law laid down by the Hon'ble Supreme Court in the case of the Pr. Commissioner of Income Tax 17. Mumbai Vs. M/S. Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited [Civil Appeal No. 8719/20221 supra. We, therefore, respectfully following the judgement of the Hon'ble Supreme Court (Supra) and Coordinate Amritsar Bench (Supra), hold that the decision of the Ld. CIT(A) in denying the deduction to the assessee is perverse to the facts on record and asst the provisions of section 80(P) and 80P(2)(d) of the Income Tax Act. Accordingly, the impugned order is quashed as bad in law.

3.

The Ld. DR for the Department relied on the impugned order, however, he did not controvert the fact nor has he filed any distinguishing judgment.

4.

In the present case, the interest income is received by the appellant cooperative society from the another cooperative society which was eligible for deduction u/s 80P(2)(d) of the Act and that the claim of the deduction u/s 80P in relation of the bank interest derived on FDR with Pali Central Co- Operative Bank, is considered to be interest derived from another cooperative society and hence the appellant is eligible for deduction u/s 80P(2)(d) of the Act. This issue is well settled as per principles laid down by Hon’ble Supreme Court as considered by Coordinate Jodhpur Bench in the case of Kulthana Gram Seva Sahakari Samiti Ltd. Vs. ITO (supra). Following the Coordinate Bench decision given on the parity of facts, we hold that the decision of ld. CIT(A) in

4 ITA No. 987/Jodh/2025 Asst. Year: 2020-21 denying the decision u/s 80P(2)(d) to the appellant is perverse to the facts on record and against the provisions of Section 80P(2)(d) of the Income Tax Act. Accordingly, the impugned order is quashed as bad in law.

5.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 21/05/2026.

Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 21/05/2026. Nimisha Sr. PS True copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER,

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