MATRUCHHAYA COMMERCIAL PREMISES CO OP SOCIETY LIMITED,MUMBAI vs. INCOME TAX OFFICER, WARD 125(1), MUMBAI, AAYAKAR BHAVAN, M.K. ROAD

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ITA 9179/MUM/2025Status: DisposedITAT Mumbai13 March 2026AY 2021-224 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 interest earned from investment in a cooperative bank is an allowable deduction under Section 80P(2)(d) of the Act. The Tribunal noted that the issue is well-settled by the Supreme Court. While the revenue argued for restriction based on Section 80P(4), the Tribunal found that the Supreme Court, in cases like PCIT Vs Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited and Kerala State Co-Operative Agricultural And Rural Development Bank Ltd. KSCARDB, has categorically stated that a cooperative bank is a cooperative society and not acting as a bank under the Banking Regulation Act, 1949. The Tribunal also observed that a Coordinate Bench of the ITAT Mumbai in the case of Kumkum Kavita Co-operative Housing Society Ltd. had taken the same view in favor of the assessee. Therefore, the addition amounting to Rs. 1,41,392/- was quashed. No issue was expressly left undecided.

What were the facts?

The assessee, Matruchhaya Commercial Premises Co-Op Society Ltd., filed appeals for Assessment Years 2020-21 and 2021-22 against orders of the Ld. CIT(A) dated 31.10.2025. These orders stemmed from Section 154 orders passed by the CPC Bengaluru on 29.06.2022 (AY 2020-21) and 17.02.2022 (AY 2021-22). The assessee, a cooperative society managing commercial premises, earned interest of Rs. 1,41,392/- from deposits with a Cooperative Bank and claimed deduction under Section 80P(2)(d) of the Income Tax Act, 1961. The CPC rejected this claim during processing under Section 143(1), and a subsequent Section 154 petition was also rejected. The assessee appealed to the Ld. CIT(A). None appeared for the assessee at the Tribunal hearing.

What were the issues?

1. Whether the interest earned from deposits placed with a Cooperative Bank is an allowable deduction under Section 80P(2)(d) of the Income Tax Act, 1961, for a cooperative society managing commercial premises? (Question of law) Assessee's Contentions: The assessee contended that the deduction under Section 80P(2)(d) for interest earned from a Cooperative Bank is allowable. They relied on the order of a Coordinate Bench of the ITAT Mumbai in the case of Kumkum Kavita Co-operative Housing Society Ltd. vs ITO (ITA No.712/Mum/2024) which held that such a deduction is allowable. Revenue's Contentions: The revenue's representative argued in favor of the orders passed by the revenue authorities. The judgment notes that the revenue restricted the claim of deduction under Section 80P(2)(d) in pursuance of Section 80P(4) of the Act, stating that a cooperative bank is not considered a cooperative society. They placed reliance on the Supreme Court's decisions in PCIT Vs Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited and Kerala State Co-Operative Agricultural And Rural Development Bank Ltd. KSCARDB vs. Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 80P(2)(d),Section 80P(4),Section 154,Section 143(1),Section 250

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI

Before: SHRI ANIKESH BANERJEE & SHRI JAGADISH

For Respondent: Shri Surendra Mohan (SR. DR)
Hearing: 11/03/2026Pronounced: 13/03/2026

Heard together (2 matters)

ITA No.9178/Mum/2025
ITA No.9179/Mum/2025

Read from the judgment's own cause title. This page is filed under one of them.

Matruchhaya Commercial vs ITO Ward 125(1), Mumbai Premises Co-OP Society Ltd. Aayakar Bhavan, M.K. Road, 504, 378-380 Narshi Natha Churchgate, Mumbai-400020 Street Masjid Bunder, Mumbai-400009 PAN:AADAM4079R APPELLANT RESPONDENT Assessee by : None Respondent by : Shri Surendra Mohan (SR. DR) Date of hearing : 11/03/2026 Date of pronouncement : 13/03/2026 O R D E R Per Bench : Both the appeals of the same assessee are preferred against the order of the Ld. Commissioner of Income Tax, Appeal, ADDL/JCIT (A) Kochi [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Year 2020-21 to 2021-22 date of order 31.10.2025. The impugned orders emanated from the order of the CPC Bengaluru Matruchhaya Commercial Premises Co-Op Society Ltd. (for brevity the ‘Ld. AO’) order passed under section 154 of the Act date of order 29.06.2022 for A.Y. 2020-21 and 17.02.2022 for 2021-22.

2.

When the appeals were called for hearing none appeared on behalf of the assessee to represent the case nor was any application for adjournment filed. On perusal of record we find that the assessee’s case was related to disallowance of interest received from Cooperative Bank u/sec. 80(P)(2)(d) of the Act. In view of the above circumstance and considering the nature of dispute we proceed to dispose of appeal to ex parte qua for the assessee, after hearing the Ld. DR and on the basis of material available on record.

3.

Both the appeals pertain from the same assessee, involving similar issues, arising out of same factual matrix. These appeals were heard together as a matter of convenience and are being decided by way of this consolidated order. So, with the consent of Ld. DR is taken as lead case and the decision rendered therein shall apply mutatis mutandis to other appeal before us.

4.

We heard the rival submission and considered the documents available in the record. The assessee is a Cooperative society registered under the Maharashtra Cooperative Societies Act and engaged in the activity by managing maintaining commercial premises. During the impugned assessment year the assessee filed the return and declaring income in accordance with the Income Tax Act. During the impugned financial year the assessee earned interest from deposit placed with Cooperative Bank which comes amount to Rs.1,41,392/- and claim deduction u/sec. 80(P)(2)(d) of the Act. The assessee’s return was processed u/sec. 143(1) and the claim u/sec. 80P(2)(d) was duly rejected by the CPC. The Matruchhaya Commercial Premises Co-Op Society Ltd. assessee filed a petition u/sec. 154 before the CPC but the said petition was also rejected. Being aggrieved assessee filed an appeal before the Ld. CIT(A).

5.

On perusal of the record we find that the assessee had placed the deposited in the Cooperative Bank. The interest earned from Cooperative Bank was claimed as deduction u/sec 80(P)(2)(d) of the Act. The said issue is no more res integra. It is noted in the ground of appeal

that the said claim of deduction is duly allowed by Coordinate Bench of ITAT Mumbai in the other cases. The assessee respectfully placed reliance on the order of Coordinate Bench of ITAT Mumbai in the case of Kumkum Kavita Co-operative Housing Society Ltd. vs ITO, date of pronouncement 28.06.2024. Where the Bench observed that the deduction u/sec. 80P(2)(d) for related to the interest earned from Cooperative Bank is allowable deduction.

6. The Ld. DR argued and stands in favor of the order of revenue authorities.

7. We heard the submission of the Ld. DR and perused the documents available on record. In our considered view the issue is well settled by the order of the Hon’ble Supreme Court. The revenue has restricted the claim of deduction U/s 80P(2)(d) in pursuance of section 80P(4) of the Act and the cooperative bank is not considered as cooperative society. Respectful reliance was placed on the order of PCIT Vs Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited, , reported in (2023) 150 taxmann.com 173 (SC) and Kerala State Co-Operative Agricultural And Rural Development Bank Ltd. KSCARDB vs. Assessing Officer, reported in [2023] 458 ITR 384 (SC) where the Hon’ble Apex Court categorically stated that cooperative bank is the cooperative society and not acted as Bank under Banking Regulation Act,1949. We note the order of the coordinate bench of

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