THERMAX EMPLOYEE CO OP CREDIT SOCIETY LTD,PUNE vs. ITO WD-9(3) , PUNE

ITA 1074/PUN/2026Status: DisposedITAT Pune08 October 2026AY 2021-228 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, stating that substantial justice is more important than procedural delay. On the substantive issues, the Tribunal noted that the assessee is a Co-operative Credit Society engaged in providing credit facilities to its members. The AO had disallowed the deduction under Section 80P(2)(a)(i) on interest income of Rs. 22,08,616/-. The Tribunal, after perusing various decisions, including the Supreme Court in CIT vs. Karnataka State Co-operative Apex Bank, the Andhra Pradesh and Telangana High Court in Vavveru Co-operative Rural Bank Ltd., and the Kerala High Court in Pr.CIT Vs. Sahyadri Co-operative Credit Society Ltd., held that interest earned by a Co-operative Credit Society registered under the state cooperative society Act, from funds deposited with a Cooperative Bank or Bank, is eligible for deduction under Section 80P(2)(a)(i) of the Act. The Tribunal also referred to similar views taken by ITAT Pune Bench. The Tribunal found the facts of the present case identical to the precedents. Therefore, the AO was directed to delete the addition. Ground No. 2 was allowed, making other grounds academic. The appeal was partly allowed.

What were the facts?

The assessee, Thermax Employee Co-op. Credit Society Ltd., filed its return of income for Assessment Year 2021-22 declaring Nil income after claiming deduction under Chapter VIA. The Assessing Officer (AO) disallowed a deduction of Rs. 22,08,616/- on interest income, holding it was not eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. The AO relied on the Supreme Court decision in Totgars Co-operative Sale Society Ltd. The assessee appealed to the CIT(A), who dismissed the appeal for non-compliance. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT), Pune Bench, with a delay of 278 days, which the Tribunal condoned. The ITAT had to decide whether the interest income earned by the assessee was eligible for deduction under Section 80P(2)(a)(i).

What were the issues?

1. Whether the Learned CIT(A) erred in dismissing the appeal without condoning the delay, considering the facts and circumstances of the case? 2. Whether the Learned CIT(A) erred in disallowing the deduction of Rs. 22,08,616/- under Section 80P of the Income Tax Act, 1961? 3. Whether the Learned CIT(A) erred in holding that the appellant society is hit by the provisions of Section 80P(4) of the Act? 4. Whether the Learned CIT(A) failed to appreciate that the appellant is a co-operative credit society and not a co-operative bank as defined under the Banking Regulation Act, 1949? Assessee's Contentions: - The assessee is a registered Credit Co-operative Society with its area of operation restricted to employees of Thermax Company, providing credit facilities to its members. - The interest income earned from deposits with Co-operative Banks and other Banks is eligible for deduction under Section 80P(2)(a)(i). - Relied on decisions of ITAT, Pune, and various High Courts. Revenue's Contentions: - The Learned DR relied on the orders of the Assessing Officer and the Learned CIT(A).

Which sections of the Income-tax Act were involved?

Section 80P,Section 80P(2)(a)(i),Section 80P(4),Section 250,Section 143(3),Section 144B,Section 143(2),Section 142(1)

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 Appellant: Smt. Deepa Khare
For Respondent: Smt. Sonal L Sonkavde, Addl. CIT

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 2021-22 on 10.03.2025, emanating from the Assessment Order u/s 143(3) r.w.s. 144B of the Act, dated 22.12.2022. 2. There was a delay of 278 days in filing of the appeal before this Tribunal. The assessee filed an application explaining the reasons for delay. We have perused the application and convinced that there was sufficient cause for delay. Substantial justice is more important than procedural delay. No assessee is going to gain by filing the appeal belatedly.

The order continues below.

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