FOREST COUNTY CO OPERATIVE HOUSING SOCIETY LIMITED,PUNE vs. DY. CIT, CIRCLE 5, PUNE

PDF · subscribers
ITA 1257/PUN/2026Status: DisposedITAT Pune26 October 2026AY 2020-214 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the issue of whether a cooperative society is entitled to avail the benefit under section 80P(2)(d) of the Act for interest income earned from investments held with cooperative banks is no longer res integra. The Tribunal noted that this issue has been decided in favour of the assessee by a catena of decisions. Specifically, the Tribunal referred to the case of Thorapadi Urban Co-op Credit Society Ltd & Others vs ITO, where the Hon'ble High Court of Madras, following a Division Bench decision in CIT vs The Salem Agricultural Producers Co-Operative Marketing Society Ltd, held that a cooperative society is entitled to the benefit under section 80P(2)(d). Consequently, the Tribunal ruled that the assessee society is entitled to a deduction of Rs. 14,69,611/- for the interest income earned from investments with Cooperative Banks. The finding of the learned CIT(A) was reversed, and the grounds of appeal raised by the assessee were allowed.

What were the facts?

The assessee, Forest County Cooperative Housing Society Limited, filed its return of income for Assessment Year 2020-21 on February 15, 2021, declaring a total income of Rs. 1.38 crore after claiming deductions under sections 80P(2)(c) and 80P(2)(d) of the Income Tax Act, 1961. The Assessing Officer (AO) disallowed a deduction of Rs. 14,69,611/- claimed under section 80P(2)(d) for interest income earned from investments in cooperative banks. The assessee's appeal before the National Faceless Appellate Authority (NFAC) was dismissed, confirming the AO's assessment. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT), Pune.

What were the issues?

1. Whether the assessee is eligible for deduction under section 80P(2)(d) of the Income Tax Act, 1961, in respect of interest income earned from investments made with cooperative banks? (Question of law) Assessee's Contention: The assessee argued that as per the provisions of section 80P, it is eligible for deduction under section 80P(2)(d) of the Act in respect of interest income earned from investments made with a co-operative bank, which is itself a co-operative society. The assessee relied on the Supreme Court's decision in The Mavilayi Service Co-Operative Bank Ltd. & Ors. Vs. Commissioner of Income Tax - (2021) 431 ITR 1 (SC), which held that interest earned by a Co-operative Society from a Co-operative bank is entitled to deduction under section 80P(2)(d). Revenue's Contention: The judgment records no specific arguments made by the revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 80P(2)(d),Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE

Before: DR.MANISH BORAD & SHRI PAVAN KUMAR GADALE

For Appellant: Shri Kishor B. Phadke, CA
For Respondent: Shri Rajesh Haladkar
Hearing: 08.09.2026Pronounced: 26.10.2026

आदेश / ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated 04.02.2026 of ld.NFAC, Delhi emanating out of Assessment Order dated 13.09.2022 passed u/s.143(3) r.w.s.144B of the Income Tax Act, 1961 (in short ‘the Act’).

2.

Assessee has raised following grounds of appeal :

“(All the Ground of Appeals are without prejudice to each other) 1. The Learned CIT(A), NFAC erred in laws and on facts in confirming the appellant's income assessed by the Ld. AO amounting to Rs. 1,53,66,990/- (instead of the returned income of Rs. 1,38,97,380/- as so declared by appellant) by denying deduction claimed u/s 80P(2)(d) of ITA, 1961 amounting to Rs. 14,69,611/-.

2.

The Learned CIT(A), NFAC erred in law and on facts in confirming the addition made by the Ld. AO by denying the deduction of Rs. 14,69,611/- claimed under section 80P(2)(d) of ITA, 1961 without appreciating that as per the provisions of section 80P, the appellant is eligible for deduction under section 80P(2)(d) of ITA, 1961 in respect of interest income earned from investments made with co-operative bank being co-operative society. 3. The learned CIT(A) erred in law and on facts in not appreciating that Supreme Court in the case of The Mavilayi Service Co-Operative Bank Ltd. & ORS. Vs. Commissioner of Income Tax - (2021) 431 ITR 1 (SC) has held that interest earned by a Co-operative Society from a Co-operative bank is entitled for deduction u/s. 80P(2)(d) of ITA, 1961. 4. Appellant craves leave to add/alter/modify/amend/delete all or any of the grounds of appeal. “

3.

From perusal of the above grounds, the sole grievance of the assessee is against the denial of deduction u/s.80P(2)(d) of the Act for the interest income earned from Saraswat Bank and Pune District Central Cooperative Banks to the tune of Rs.14,69,611/-.

4.

We have heard the rival submissions and perused the record placed before me. We observe that the assessee is a Credit Cooperative Society and return of income e-filed on 15.02.2021 declaring total income of Rs.1.38 crore after claiming deduction u/s.80P(2)(c) and u/s.80P(2)(d) of the Act at Rs.50,000/- and Rs.14,69,611/-. Statutory notices u/s.143(2) and 142(1) of the Act issued to the assessee to which the assessee filed replies from time to time. Ld. Assessing Officer after considering the details and replies filed by the assessee concluded the assessment disallowing the deduction claimed by the assessee u/s.80P(2)(d) of the Act at Rs.14,69,611/-. Assessee preferred appeal before ld.CIT(A) which came to be dismissed and now the assessee has approached the Tribunal contending that the assessee is eligible for claiming deduction u/s.80P(2)(d) of the Act.

5.

This issue is no longer res integra by virtue of catena of decisions passed by this Tribunal on this very issue and the assessee’s case is squarely covered in its favour. In the case of Thorapadi Urban Co-op Credit Society Ltd & Others vs ITO in W.P. Nos. 11172 and others, judgment dated 10.10.2023, the Hon'ble High Court of Madras following the decision of Division Bench of Hon'ble High Court of Madras in the case of CIT vs The Salem Agricultural Producers Co-operative Marketing Society Ltd in Tax Case Appeal No. 5 of 2015 held that a cooperative society is entitled to avail the benefit u/s.80P(2)(d) of the Act.

6.

Following the above judicial precedent, we hold that for the interest income at Rs.14,69,611/- earned from the investments held with Cooperative Banks, assessee society is entitled to deduction u/s. 80P(2)(d) of the Act. Finding of ld.CIT(A) is reversed. Grounds of appeal raised by the assessee are allowed.

7.

In the result, the appeal of the assessee is allowed.

Order pronounced on this 26th day of October, 2026.

Sd/- Sd/- (PAVAN KUMAR GADALE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; दिन ांक / Dated : 26th October, 2026. Satish

आदेश की प्रतिलिपि अग्रेषित / Copy of the Order forwarded to : अपीलार्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण, “A” बेंच, 4. पुणे / DR, ITAT, “A” Bench, Pune. गार्ड फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, Sunil Kumar Digitally signed by Sunil Kumar More More Date: 2026.10.26 17:18:26 // True Copy // Assistant Registrar, +05'30' आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune.

More judgments on Section 80P(2)(d)

All 2,440 judgments and leading authorities on Section 80P(2)(d) →

Recent GST High Court judgments

Search GST case law →