HISLOP COLLEGE EMPLOYEES COOPERATIVE CREDIT SOCIETY LIMITED,NAGPUR vs. ITO WARD 2(3), NAGPUR, NAGPUR

ITA 184/NAG/2026Status: DisposedITAT Nagpur14 October 2026AY 2018-194 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the CIT(A) had erred in confirming the denial of deduction under Section 80P(2)(a)(i) for the savings bank account interest. The Tribunal reasoned that interest earned on SB accounts is attributable to the assessee's activities of providing credit facilities to its members. Consequently, the Tribunal set aside the CIT(A)'s order regarding SB account interest and directed the A.O. to allow the deduction. However, for the interest on deposits with scheduled banks, the Tribunal restored the issue to the file of the Assessing Officer for adjudication afresh. The A.O. is to examine and verify if this interest is attributable to the banking business and was utilized for providing credit facilities, with an opportunity for the assessee to be heard and cooperate. The grounds of appeal were considered partly allowed for statistical purposes.

What were the facts?

The assessee, Hislop College Employees Cooperative Credit Society Ltd., filed its return for Assessment Year 2018-19 declaring NIL income after claiming deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. The Assessing Officer (A.O.) selected the case for scrutiny and, upon examining the Profit & Loss account, noted interest income from investments/deposits with cooperative and commercial banks. The A.O. denied deduction under Section 80P(2)(a)(i) to the extent of Rs. 4,72,297/-, comprising interest on fixed deposits (Rs. 3,94,708/-) and savings bank account (Rs. 77,589/-), assessing the total income accordingly. The assessee's appeal to the CIT(A) was dismissed, confirming the A.O.'s action. The assessee then appealed to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the CIT(A) erred in confirming the denial of deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961, in respect of interest income from banks amounting to Rs. 4,72,297/-. Assessee's Contention: The assessee contended that the CIT(A) erred in confirming the denial of deduction under Section 80P(2)(a)(i) for interest income from banks. Revenue's Contention: The Revenue, through the Senior Departmental Representative, presented submissions. The judgment does not explicitly detail the revenue's specific arguments against the deduction claim, beyond the fact that the A.O. denied it.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH :: NAGPUR

Before: SHRI PAVAN KUMAR GADALE

Hearing: 09.10.2026Pronounced: 14.10.2026

PER PAVAN KUMAR GADALE, JUDICIAL MEMBER:

The assessee has filed the appeal against the order of CIT(A)/NFAC passed143(3) and u/sec 250 of the Income Tax Act, 1961. The assessee has raised grounds of appeal challenging the action of the CIT(A) sustaining the partial denial of claim of deduction u/sec80P(2)(a)(i) of the Act made by the Assessing Officer.

2.

The brief facts of the case are that, the assessee is a credit cooperative society registered under the Maharashtra State Cooperative Societies Act, 1961 and is engaged in providing credit facilities to its members. The Assessee has filed the return of income for A.Y.

The order continues below.

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