VIVEKANAND SHIKSHAKANCHI SAHKARI PATSANSTHA MARYADIT KADA ,BEED vs. ITO WARD 1(5), AURANGABAD, AURANGABAD

ITA 2407/PUN/2026Status: DisposedITAT Pune23 September 2026AY 2020-218 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the interest income of Rs. 46,79,216/- earned by the assessee from deposits with Maharashtra Gramin Bank is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. The Tribunal relied on various judicial precedents, including the Supreme Court's decision in CIT vs. Karnataka State Co-operative Apex Bank, the Andhra Pradesh and Telangana High Court's ruling in Vavveru Co-operative Rural Bank Ltd., and the Kerala High Court's judgment in Pr.CIT Vs. Sahyadri Co-operative Credit Society Ltd. These decisions established that interest earned by co-operative credit societies from funds deposited with banks, where such deposits are made from income derived from their primary business of providing credit facilities, is considered business income attributable to their main activity and thus eligible for deduction under Section 80P(2)(a)(i). The Tribunal noted that the facts of the present case were identical to those in the cited precedents. Consequently, the AO was directed to delete the addition. The issue regarding interest under Sections 234B and 234A was not explicitly decided as the appeal was allowed on the primary ground of Section 80P deduction.

What were the facts?

The assessee, Vivekanand Shikshakanchi Sahkari Patsanstha Maryadit Kada, is an employees' co-operative credit society registered under the Maharashtra State Co-operative Societies Act, 1960. For Assessment Year 2020-21, it filed a return offering a gross total income of Rs. 1,43,91,530/-, claiming a deduction of the entire amount under Section 80P of the Income Tax Act, 1961. The Assessing Officer (AO) noted that the total interest income included Rs. 46,79,216/- earned from deposits with Maharashtra Gramin Bank. The AO disallowed the deduction under Section 80P(2)(a)(i) for this amount, holding it was not attributable to the business of providing credit facilities. The Commissioner of Income Tax (Appeals) confirmed this addition. The assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT) after a delay of 75 days, which was condoned.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in treating the interest income of Rs. 46,79,216/- received on deposits kept with banks as income from other sources and taxing it, thereby denying the deduction under Section 80P(2)(a)(i) of the IT Act? 2. Whether, on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in charging interest under Sections 234B and 234A of the IT Act, even though the appellant society is not liable to pay advance tax as per Section 208 of the IT Act? Assessee's Contentions: - The interest income earned on bank deposits should be eligible for deduction under Section 80P(2)(a)(i) as it is attributable to the society's main business of providing credit facilities. - Interest under Sections 234B and 234A should be deleted as the society is not liable for advance tax. Revenue's Contentions: - The Ld. DR relied on the orders of the AO and the Ld. CIT(A), implying that the interest income from bank deposits is not eligible for deduction under Section 80P(2)(a)(i).

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 250,Section 143(3),Section 144B,Section 208,Section 234B,Section 234A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI Dr. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Respondent: Shri Sanjiv Kumar Verma, JCIT

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2020-21 on 23.12.2025, emanating from the Assessment Order u/s 143(3) r.w.s 144B of the Act, dated 19.09.2022. 2. There was a delay of 75 days in filing of the appeal before this Tribunal. Substantial justice is more important than procedural delay. No assessee is going to gain by filing the appeal belatedly. Accordingly, delay condoned.

3.

The assessee has raised the following grounds of appeal :

2 “1. On the facts and in the circumstances of the

The order continues below.

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