ASSISTANT COMMISSIONER OF INCOME TAX, THANE WEST vs. SANJAY CO OP CREDIT SOCIETY LIMITED, THANE
Income Tax Appellate Tribunal, Mumbai “F” Bench, Mumbai.
Before: Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM) Asstt. CIT Room No. 22, B Wing 6th Floor, Ashar IT Park Wagle Inds. Estate Thane West Maharashtra-400 604. Vs. Sanjay Cooperative Credit Society Limited 1 Sanjay Society Bldg. Uttan Naka Bhayander, Thane Maharashtra-401 106. PAN : AACAS3872P Appellant
Per Omkareshwar Chidara (AM) :-
The Revenue filed an appeal in this case with following grounds of appeal :-
1. On the facts and in circumstances of the case and in law, the ld.CIT(A) has erred in not appreciating the fact that co-operative bank is a commercial bank and does not fall under the purview of "Co- operative Society" referred in Section 80P(2)(d) of the Income Tax
Act, 1961 and therefore the assessee society is not eligible for deduction u/s.80P(2)(d) of the Income Tax Act, 1961. 2. On the facts and in circumstances of the case and in law, the Ld.
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CIT(A) erred in not appreciating that the assessee has also earned income from Dena Bank, which admittedly is not a co-operative bank, but a commercial bank.
3. The Ld.CIT(A) has mentioned in Para 9, that it is not section 80P makes it clear that deduction uls.80P(2)(d) is only available for deposits made in cooperative societies while in the instant case the assessee earned interest from investment made in a bank and not a cooperative society and therefore the assessee was not eligible for deduction. The CIT(A) has further mentioned that this view was upheld in the decision of Hon'ble Supreme Court in the case of Totgars Co-operative Society 322 ITR 283. On the facts and in circumstances of the case, the ld.CIT(A) erred in ignoring the Hon'ble SC decision and following various juri ictional ITATs decisions.
The appellant Society filed a Cross Objection with following grounds of appeal :-
The assessee being a co-operative credit society is entitled for deduction of its entire income including interest from co-operative and nationalized banks u/s 80(P)(2)(a)(i) of The Income Tax Act, 1961
Alternatively, the assessee is entitled for deduction u/s 80(P)(2)(d) in respect of interest income earned from other co-operative societies.
The assessee being a co-operative society is eligible for deduction u/s 80P(2)(c) amounting to Rs 50,000/-.
The appellant further reserves the right to add, amend or alter the aforesaid grounds of appeal as they may think fit by themselves or by their representatives.
Since the issue in both the appeals is common and same, the Income Tax Appeal and Cross objection are clubbed and a consolidated order is passed.
From the above grounds of appeal of Revenue and from the Cross objection filed by the appellant society, it is observed that the issue deals with deduction of income from interest from cooperative and national banks under section 80P(2)a)(i)/80(P)(2)(d)/80P(2)(c) of the Income Tax Act. The Revenue filed an appeal stating that the appellant society is not entitled to 3 deduction under section 80P for the interest earned from the cooperative banks and placed reliance on the decision of Hon'ble Supreme Court in the case of Totgar Cooperative Society, 322 ITR 283(SC).
During the hearing proceedings, the Ld. DR relied on the assessment order and the grounds of appeal and pleaded that the addition made by denying the deduction claimed by appellant under section 80P should be confirmed and the order of Ld. CIT(A) be reversed.
Per contra, Ld. AR of the appellant has argued that the case of Totgar Cooperative Society (supra) relied on by the Revenue is not applicable to the facts of this case because their society does not hold banking license and hence entire income from cooperative banks is exempt under section 80P(2) of the Act. The Ld. AR of the appellant filed a paper book containing several Tribunal and High Court decisions, where it was held that the income from cooperative banks and nationalized banks is exempt under section 80P(2) of the Act. It was argued that the issue is no more debatable because of the following Supreme Court decision on this point :-
“We would like to bring to your notice that the Supreme Court in the following cases observed that any Co-operative Credit society not holding banking license is eligible for deduction for its entire income u/s 80(P)(2) of the Income Tax act.
1)The Citizen Cooperative Society Ltd V/s. ACIT vide order dated 8th of August 2017, appeal number 10245 of 2017
2)The Mavilayi Service Cooperative Vs. Commissioner Of Income Tax on 12
Kamgar Sahakari Patpedhi Ltd. (IA No. 36473/2020 20.04.2023).
4) Kerala state cooperative Agricultural and Rural Development Bank Ltd.
V/s. The A.O. Trivandrum Civil Appeal No.10069 of 2016 dt.14th
September 2023 in this case the entire 80(P) has been allowed by observing as follows.
"In the result, the appeals filed by the appellant are allowed and the order(s) of the Kerala High Court and other authorities to the contrary are set aside. Consequently, we hold that the appellant is entitled to the 4
benefit of deduction under Section 80P of the Act. The questions for consideration are answered accordingly."
As far as the interest received from nationalized banks is concerned, the appellant relied on the decision of Vavveru Cooperative Rural Bank 396 ITR 371 (Telangana & AP High Court), where it was held that the interest received by the cooperative society from National Banks is exempt under section 80P of the Act.
Heard both sides. Since the issue is covered by the decisions of Hon'ble Supreme Court (supra) in the case of Citizen Coop. Society Ltd. and the Mavilayi Service Coop. Society (supra) in favour of appellant, where it was held that the appellant society is entitled to deduction under section 80P(2)(d) of the Act. Hence, the appeal of the Revenue is dismissed and cross objection filed by the appellant society is allowed. Order pronounced in the open Court on 23/07/2025. (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER
Copy of the Order forwarded to :
The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.
BY ORDER,
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