CLAREMONT CO OPERATIVE HOUSING SOCIETY LIMITED,MUMBAI vs. INCOME TAX OFFICER WARD 3(), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H(SMC)”, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.1785/Mum/2026 (Assessment year: 2021-22)

Claremont Co Operative vs ITO, Ward 3(1), Mumbai Housing Society Ltd. Ashar I.T. Park, 6th floor, Road Claremont CHS Ltd. Eastern No.16Z, Brodma, Neheru Nagar, Express Highway, Lodha Wagle Industrial Estate, Thane Luxuria Near Lodha Paradise West-400604 Majiwada Thane West-400601 PAN:AADAC5131A APPELLANT RESPONDENT Assessee by : Ms. Neha Paranjpe Revenue by : Shri Pravin Salunkhe (Sr. DR)

Date of hearing : 16/04/2026 Date of pronouncement : 22/04/2026 O R D E R Per: Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the Ld. Commissioner of Income Tax(Appeal) ADDL/JCIT-A 2 Visakhapatnam [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Year 2021-22, date of order 25.08.2025. The impugned order emanated from the order of the Assessment Unit Income Tax

2 ITA No.1785/Mum/2026 Claremont co Operative Housing Society Ltd. Department, CPC Bengaluru (for brevity the ‘Ld. AO’) order passed under section 143(1) of the Act date of order 14.11.2022. 2. The registry informed that the appeal was filed with a delay for 112 days delay. The Chairman of the assessee-trust, Mr. Tejwant Navalkar executed a notarized affidavit on 19.02.2026 and explained the delay for filing the same. The Ld. DR had not made any strong objection against the submission of the assessee. Accordingly, we find that there is a sufficient cause for delay in filing the appeal for 112 days. Accordingly, we condone the delay for filing the appeal before us and the appeal is taken for adjudication. 3. The brief facts of the case is that the assessee is a Cooperative Housing Society and filed the return by claiming deduction u/sec. 80P(2)(d) for the interest received on fix deposit with Cooperative banks. The Ld. AO has disallowed the claim of the assessee. The assessee has invested its surplus funds in terms of deposit with “Saraswat Cooperative Bank” and “Thane District Central Cooperative Bank”. The gross total income was Rs.17,41,092/- after claiming deduction u/sec. 80P(2)(d) amount to Rs.7,83,714/- the taxable income is calculated amount to Rs.9,57,380/- on which the total income tax with interest was incurred amount to Rs.3,45,510/- and was paid during the filing of return of income. The Ld. AO disallowed the claim u/sec. 80P(2)(d) of the Act as the Cooperative Bank is not eligible u/sec. 80P(4). The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee. Being aggrieved assessee filed an appeal before us.

3 ITA No.1785/Mum/2026 Claremont co Operative Housing Society Ltd. 4. We have heard the rival submissions and perused the material available on record. The Ld. AR submitted that the assessee filed the return of income declaring a total income after claiming deductions under Chapter VI-A of the Act. The case was selected for scrutiny. The assessee had claimed deduction under section 80P(2)(d) of the Act in respect of interest income amounting to Rs. 7,83,714/-.The Ld. AO observed that the assessee had earned total interest income of Rs. 7,83,714/- from investments in the cooperative banks named “Saraswat Cooperative Bank” and “Thane District Central Cooperative Bank”. 5. The Ld. DR, during the course of hearing, contended that the assessee is not entitled to claim deduction under section 80P(2)(d) in respect of the amount of Rs. 7,83,714/- for contravening provision u/sec 80P(4) of the Act. The Ld. DR strongly relied upon the orders of the lower authorities. 6. The only issue as agitated by the assessee society related to interest and dividend from co-operative banks which is claimed as deduction under section 80P(2)(d) of the Act. Ld. AR contended that the Ld. CIT(A) cited various judicial precedents but the inference drawn in the instant matter as compared to the matter relied upon by Ld. CIT(A) that the assessee had received interest income from Co-operative Banks the same was claimed as deduction u/s 80P(2)(d). Whereas in the instant case, the assessee had received interest only from Co operative Banks. Section 80P(2)(d) provides for deduction of interest received by a Co-operative Society from another Co-operative Society. A Co-operative Society being a Co-operative Society fits into the permissible provisions of the deductions. Thus the case referred by the Ld. CIT(A) in his judgment is not applicable or relatable to the facts of the instant case.

4 ITA No.1785/Mum/2026 Claremont co Operative Housing Society Ltd. 7. The respectful reliance is placed on the judgment passed by Hon'ble Apex Court in the case of Kerala State Cooperative Agricultural and Rural Development Bank Ltd v. Assessing Officer reported in [2023] 154 taxmann.com 305/295 Taxman 675/458 ITR 384 (SC). The relevant extract is as follows-

"28. Having heard learned advocates for the respective parties and considering the controversy arising in these tax appeals, we are of the opinion that the controversy sought to be canvassed with regard to deduction under section 80P(2)(d) of the Act is no more res integra in view of the decision of this Court in case of KatlaryKariyana Merchant SahkariSarofiMandali Ltd. (supra) as well as in case of State Bank of India (supra) wherein it was held that the deduction of under section 80P(2)(d) of the Act is available to the cooperative societies on the income earned as interest on the investment made with the cooperative bank which in turn, is a cooperative society itself” 8. Further the we respectfully relied on the order of the Hon'ble Supreme Court in PCIT Vs Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited, Civil Appeal No. 8719/2022 dated 20/04/2023, reported in (2023) 150 taxmann.com 173 (SC) it is held that,

"…………Even otherwise, on merits also and taking into consideration the CBDT Circulars 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 be applicable and that the respondent/Assessee shall be entitled to exemption/benefit under Section 80(P)(2) of the Income Tax Act."

5 ITA No.1785/Mum/2026 Claremont co Operative Housing Society Ltd. "15.14…………… Conclusion: In the instant case, although the appellant society is an apex cooperative society within the meaning of the State Act, 1984, it is not a co-operative bank within the meaning of Section 5(b) read with Section 56 of the BR Act, 1949. In the result, the appeals filed by the appellant are allowed and the order(s) of the Kerala High Court and other authorities to the contrary are set aside. Consequently, we hold that the appellant is entitled to the benefit of deduction under Section 80P of the Act." 10. In our considered view the issue is well settled by the order of the Hon’ble Supreme Court. The revenue has restricted the claim of deduction U/s 80P(2)(d) in pursuance of section 80P(4) of the Act and the cooperative bank is not considered as cooperative society. Respectful reliance was placed on the order of Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited (supra) and Kerala State Co-Operative Agricultural and Rural Development Bank Ltd. KSCARDB (supra) where the Hon’ble Apex Court categorically stated that cooperative bank is the cooperative society and not acted as Bank under Banking Regulation Act, 1949. We note the orders of the coordinate benches of ITAT- Mumbai in case of Jaimuni Sahkari Patpedhi Maryadit vs AUITD in ITA No. 332 to 334/Mum/2025 date of order 06/03/2025 has taken same view in favour of the assessee. So, the interest earned from investment in cooperative bank is allowable deduction U/s 80P(2)(d) of the Act. The addition amount to Rs. 7,83,714/- is quashed.

6 ITA No.1785/Mum/2026 Claremont co Operative Housing Society Ltd. 11. In the result, the appeal of the assessee bearing ITA No.1785/Mum/2026 is allowed. Order pronounced in the open court on 22nd day of April 2026.

Sd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 22/04/2026 SAUMYASr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI