SANT GADGE MAHARAJ NAGARI SAHAKARI PATSANSTHA MARYA SHIRALA,SHIRALA vs. INCOME TAX OFFICER, WARD 5, SANGLI, SANGLI

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1165/PUN/2026 िनधा�रण वष� / Assessment Year : 2020-21 Sant Gadge Maharaj Nagari Vs. ITO, Ward-5, Sangli. Sahakari Patsanstha Marya Shirala, A/p Shirala, Tal. Shirala, Dist. Sangli- 415408. PAN : AAAAG4139R Appellant Respondent Assessee by : Shri S. N. Puranik Revenue by : Shri R. M. Brindha Date of hearing : 28.07.2026 Date of pronouncement : 06.10.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 16.01.2026 passed by Ld. CIT(A)/NFAC for the assessment year 2020-21. 2. The appellant has raised the following grounds of appeal :- “1. CIT(A) has grossly erred in confirming claim of disallowance of Deduction u/s 80P(2)(d), in respect of Interest on Fixed Deposit with Cooperative Bank. Appellants Prays to allow the same.

2 ITA No.1165/PUN/2026 2. Without Prejudice to Ground No. 1, CIT(A) has erred in confirming Income at Rs.43,70,080/- against NIL Income. Appellant Prays that Income will be NIL even after Interest on FD is treated as not eligible, as Business Income will result in Loss & Income from Interest on FD as Income from Other Sources will be adjusted against Loss, resulting Final Income at Rs. NIL. 3. Appellant denies liability of Interest u/s 234A & 234B. Appellant prays for cancellation of the same. 4. Appellant prays to add, alter, amend, take additional grounds, submit additional evidence, and/or withdraw the ground/s, during appellate Proceedings. 5. Appellant prays for just and equitable relief.” 3. Facts of the case, in brief, are that the assessee is a credit cooperative society engaged in the activity of providing credit facilities to its members and also accepting deposits from them and has furnished its return of income on 02.02.2021 by declaring income of Rs.Nil after claiming deduction of Rs.43,70,081/- u/s 80P(2)(d) of the IT Act. The case was selected for scrutiny and notices u/s 143(2) and 142(1) respectively were issued to the assessee. After considering the reply and submissions of the assessee, the Assessing Officer vide order dated 07.09.2022 completed the assessment proceedings u/s 143(3) r.w.s. 144B of the IT Act by determining the income of the assessee at Rs.43,70,080/- as against the income of Rs.Nil returned by the assessee. The above assessed income includes addition of Rs.43,70,080/- being

3 ITA No.1165/PUN/2026 disallowance u/s 80P(2)(d) of the IT Act with regard to interest income earned by the assessee from cooperative banks. 4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC dismissed the appeal. 5. It is the above order against which the assessee is in appeal before this Tribunal. 6. We have heard Ld. Counsels from both the sides and perused the material available on record including the copy of case law furnished by the assessee. In this regard, we find that the Assessing Officer by placing reliance in the case of Totgar’s Cooperative Sales Society Ltd. vs. ITO, 322 ITR 283 and also relying on the judgement of Hon’ble Karnataka High Court in the case of PCIT vs. The Totgar’s Cooperative Sales Society, (2017) 83 taxmann.com 140 (Karnataka)and also in the light of section 80P(4) of the IT Act disallowed the deduction of Rs.43,70,081/- u/s 80P(2)(d) claimed by the assessee with regard to interest income earned from its investments with other cooperative banks. In this regard, we find that the above issue is no more res integra in the light of various

4 ITA No.1165/PUN/2026 decisions passed by coordinate benches of this Tribunal including the case of Armed Forces Ex-Officers Multi Services Co-Operative Soc. in ITA No.2343/PUN/2024 order dated 28-02-2025 wherein the Tribunal allowed the deduction u/s 80P(2)(d) of the IT Act by observing as under :- “6. The Ld. AR submitted that the assessee has rightly claimed the deduction u/s. section 80P(2)(d) of the Act in respect of interest income earned during the relevant A.Y. from co-operative banks, such banks being cooperative societies. He further submitted that the claim of the assessee was accepted in the original assessment framed u/s. 143(3) of the Act on 16.03.2015, a copy of the said assessment order was placed on record. The Ld. PCIT, therefore erred in exercising his revisional powers u/s. 263 of the Act and directing the Ld. AO to reconsider the deduction claimed by the assessee u/s.80P of the Act. 6.1 The Ld. AR submitted that the impugned issue has been decided in favour of the assessee by the various decisions of the co-ordinate bench of the Tribunal and relied on the following judicial precedents in support thereof: (i) Kolhapur District Central Co-op. Bank KanistaSevakanchiSahakarPatsanstha Lad, vs. ITO, ITΑ Νο. 1365/PUN/2023 (A.Y 2018-19) (ii) Rena SahakariSakhar Karkhana Ltd vs. PCIT-2 Aurangabad ITA No. 1249/PUN 2018 (Α.Υ 2013-14) (iii) Hilla Heights as Co-operative vs. ADIT ITA No.2850/MUM/2022 (Α.Υ 2020-21) (iv) Amore Commercial Premises Co-op. Society Ltd. vs. CPC, ITA Nos. 2873 & 2874/M/2022 (Α.Υ. 2020-21) (v) Pune JilhaGramsevakvs. Income Tax Officer, Ward12(1), Pune dated 19 March, 2024 (AY 2018-19) 6.2 The Ld. AR further submitted that impugned issue has been decided by the Pune bench of the Tribunal in assessee’s own case for A.Y.2013- 14 in ITA No. 787/PUN/2024 vide order dated 27.09.2024. 7. The Ld. DR, on the other hand, supported the order of the Ld. AO/CIT(A).

5 ITA No.1165/PUN/2026 8. We heard the Ld. Representative of the parties and perused the material available on record as well as various judicial precedents cited by the Ld. AR in support of its claim of deduction u/s. 80P of the Act. The facts are not in dispute. During the relevant AY, the assessee has earned interest income from four co-operative banks, namely (i) The Cosmos Co-operative Bank Ltd. (ii) Pune District Central Co- Operative Bank (iii) The ShamraoVitthal Co-operative Bank and (iv) Saraswat Co-operative Bank Ltd and claimed deduction u/s.80P(2)(d) of the Act in respect thereof. We find that the impugned issue is no more res-integra in the light of the various decisions of the co-ordinate bench of the Tribunal (supra) relied upon by the Ld. AR. We further observe that the impugned issue is also covered in favour of the assessee by the decision of the Tribunal dated 27.09.2024in ITA No.787/PUN/2024in assessee’s own case for AY 2013-14. The relevant observations and findings of the Tribunal in the said decision are reproduced below: “8.We have heard the ld. Counsels from both the sides and perused the material available on record including the case laws furnished by assessee in the paper book. We find that the ld. CIT(A)/NFAC has confirmed the disallowance made by the Assessing Officer u/s 80P(2)(d) of the IT Act on the basis of judgement of Hon'ble High Court of Karnataka in the case of PCIT, Hubballi vs. Totagars Cooperative Sale Society, 395 ITR 611 order dated 16.06.2017, not being business income of the assessee cooperative society. We find that this issue is squarely covered by various decisions of the Jurisdictional Co-ordinate Benches of this Tribunal, wherein, it has been held that the interest income earned by a co-operative society from any other co-operative society on its investments is eligible for deduction u/s 80P(2)(d) of the IT Act. It is worthwhile to mention here that though the co-operative banks pursuant to the insertion of sub- section (4) to section 80P would no more entitle for claim of deduction u/s 80P of the IT Act but as a co-operative bank continues to be a co-operative societies registered under the Co- operative Societies Act in any State, the interest income derived by a cooperative society from its investments held with a co- operative bank would be entitled for claim of deduction u/s 80P(2)(d) of the IT Act. In this regard, we find support from the following decisions passed by the Co-ordinate Benches of this Tribunal :- (i) Kolhapur District Central Co-op. Bank KanistaSevakanchiSahakarPatsanstha Lad, vs. ITO, ITΑ Νο. 1365/PUN/2023. A.Y 2018-19, dated 01.01.2024.

6 ITA No.1165/PUN/2026 (ii) Rena SahakariSakharKarkhana Lid vs. PCI-2 Aurangabad ITA No. 1249/PUN 2018 Α.Υ 2013-14, order dated 07.01.2022 (iii) Hilla Heights as Co-operative ADIT ITA No.2850/MUM/2022 Α.Υ 2020-21, dated 03 04 2023. (iv) Amore Commercial Premises Co-op. Society Ltd. vs. CPC, ITA Nos. 2873 & 2874/M/2022 Α.Υ. 2020-21, dated 17.01.2023 (v) Dhanshree Multistate Cooperative Society Ltd, ITA No.463/PUN/2024 order dated 13-06-2024. (vi) Karmveer Bhaurao Patil Nagri Sahkari Patsanstha Maryadit ITA No. 1045/PUN 2023 order dated 21-02- 2024. 9. Therefore, respectfully following the above decisions, we find that the interest income earned by the assessee co-operative society on its investments made with other co-operative banks being a co-operative society entitles for deduction u/s 80P(2)(d) of the IT Act. We therefore allow ground no.1 raised by the assessee and direct the Assessing Officer to allow the deduction of Rs.1,65,02,105/- u/s 80P(2)(d) of the IT Act.” 9. Respectfully following the decisions (supra) and in the absence of any contrary material brought on record by the Revenue to enable us to take a different view, we set aside the order of the Ld.CIT(A). Accordingly, the grounds raised by the assessee are allowed. 10. In the result, the appeal of the assessee is allowed.” 7. Respectively following the above decision passed in the case of Armed Forces Ex-Officers Multi Services Co-Operative Soc. (supra) wherein section 80P(4) & case of Totgar’s Sale Society Ltd. has been referred & distinguished, we are of the considered opinion that the assessee credit coop society is entitled for deduction u/s 80P(2)(d) of the IT Act.

7 ITA No.1165/PUN/2026 8. Considering the totality of the facts of the case & in view of above discussion, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to allow deduction of Rs.43,70,081/- claimed by the assessee u/s 80P(2)(d) of the IT Act with regard to interest income earned from its investments with other co-operative banks which are also cooperative societies. Accordingly, the grounds raised by the assessee credit co-operative society are allowed. 9. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 06th day of October, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 06th October, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.10.08 11:09:34 +05'30' आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब�च, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.