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Facts
The appellant society's appeal was filed with a delay of 30 days. The grounds for appeal challenged the disallowance of a deduction of Rs. 2,01,333/- claimed under section 80P(2)(d) of the Income Tax Act, 1961, related to interest earned from a cooperative bank, and the addition of the same amount to total income.
Held
The Tribunal condoned the delay in filing the appeal. Relying on various decisions of the ITAT and the Supreme Court, particularly the case of Mavilayi Services Cooperative Bank Ltd., the Tribunal held that the appellant society is eligible for deduction under section 80P(2)(d) on interest earned from a cooperative bank.
Key Issues
Whether a cooperative society is eligible for deduction under section 80P(2)(d) on interest earned from a cooperative bank, even if the lower authorities considered the bank not to be a cooperative society.
Sections Cited
80P(2)(d), 1961
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Income Tax Appellate Tribunal, Mumbai “(SMC
Before: Smt. Beena Pillai (JM) & Shri Omkareshwar Chidara (AM)
1. The respected Appellate Authority has erred in making addition of Rs. 2,01,333/- to the total income and disallowing the deduction of Rs. 2,01,333/- claimed u/s. 80P(2)(d) of the Income Tax Act, 1961 on account of interest earned from Cooperative Bank on the ground that Cooperative Bank is not a cooperative society.
2. The respected Appellate Authority has erred in determining income tax liability of Rs. 62,800/-.
2. At the outset, it is seen that there is a delay of 30 days in filing the appeal for which the Ld. AR of the appellant submitted an application to condone the delay as they are not doing any business and not conversant with the Income Tax Laws, it took some time to consult an advocate to file an appeal. Hence, there is a delay, it was mentioned in their application.
2 3. During the hearing before the ITAT, the application and submissions of Ld. AR of appellant were taken into consideration and it is decided to condone the delay and proceed the take up the case on merits.
The Ld. AR of the appellant has relied on various grounds raised by them before Ld. CIT(A) and this Tribunal. The Ld. AR filed copies of the Coordinate Bench decisions including Bombay ITAT in various cases like Palm Court M. Premises Cooperative Society Ltd. Vs. PCIT Mumbai, (ITA No. 561/Mum/2021), Kaliandas Udyog Bhavan Premises Cooperative Society Ltd. Vs. ITO Mumbai (94 taxmann.com 15), where the ITAT Mumbai has distinguished the decision of Totgar’s Cooperative Society (322 ITR 283)(SC) and hence held that in similar facts and circumstances, the appellant society is eligible for deduction under section 90P(2)(d) of the Act on the interest on deposits made with the Cooperative Banks. The Ld. AR of the appellant has relied on several catena of decisions of various Benches of Tribunals and finally pleaded that the issue is settled by Hon'ble Supreme Court in the case of Mavilayi Services Cooperative Bank Ltd. (431 ITR 1)(SC), where it was held that the appellant society is entitled for deduction u/s. 80P(2)(d) of the Act. The Ld. AR of the appellant has stated that Ld. CIT(A) placed reliance of Totgar’s Society of Hon'ble Supreme Court (supra), but the case was on different facts.
The Ld. DR has relied on the orders of lower authorities.
After hearing rival submissions, it is decided that the appellant society is entitled to deduction u/s. 80P(2)(d) of the Act in view of the decisions cited by Ld. AR of the appellant and also in view of the fact the issue is settled in favour of the appellant by the decision of Hon'ble Supreme Court in the case of Mavilayi Services Cooperative Bank Ltd. (supra).
The appeal of appellant is allowed.
3 Order pronounced in the open Court on 03/03/2025.