MAMASAHEB KHANDGE NAGRI SAHAKARI PATSASTHA MARYADIT,TALEGAON DABHADE vs. PCIT PUNE 3, PUNE

Facts of the case, in brief, are that the assessee is a credit co- operative society engaged in the activity of accepting deposits from its members and also providing credit facilities to them. The return of income for the period under consideration was furnished by the assessee on 27.02.2021 and an income of Rs.56,510 was disclosed after claiming deduction of Rs.1,00,07,284/- u/s 80P(2)(a)(i) of the IT Act. The case of the assessee was selected for scrutiny and notice u/s 143(2), 142(1) and show cause notice respectively were issued to the assessee. After considering the reply of the assessee with regard to interest income earned on its investments with co- operative banks claim of deduction of u/s 80P(2)(a)(i) of the IT Act was allowed and vide order dated 30.09.2022 assessment order u/s 143(3) r.w.s. 144B of the IT Act was passed and the returned income of Rs.56,510/- was accepted by the Assessing Officer. 4. Subsequently, on examination of the case record, Ld. PCIT found that the assessee has claimed deduction u/s 80P(2)(a)(i) of the 4 IT Act with regard to interest income earned on its investments made with various banks including cooperative banks. Ld. PCIT was of the view that the assessee is not entitled to claim deduction either u/s 80P(2)(a)(i) of the IT Act or u/s 80P(2)(d) of the IT Act r.w.s. 80P(4) of the IT Act. Accordingly, Ld. PCIT vide order dated 13.03.2025 held that the assessment order dated 30.09.2022 is erroneous insofar as it is pre-judicial to the interests of the revenue, therefore the above assessment order was partly set-aside to the file of the Assessing Officer for the limited purpose of examining the above issues. 5. Being aggrieved with the above order passed by Ld. PCIT u/s 263 of the IT Act, the assessee is in appeal before this Tribunal. 6. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. PCIT u/s 263 of the IT Act is unjustified. Ld. AR submitted that that the issue of claiming deduction u/s 80P(2)(a)(i) and 80P(2)(d) of the IT Act with regard to interest income earned on its investments made with nationalized banks and cooperative banks in the hands of primary credit co- operative societies is no more res integra in the light of coordinate bench decisions passed in bunch of the cases of various co-operative 5 societies by common order dated 23.05.2023 in the lead case of ITA No.186/PUN/2023 wherein under identical facts proceedings initiated u/s 263 of the IT Act was held to be invalid. Accordingly, Ld. AR contended that primary credit societies engaged in accepting deposits and providing credit facilities to their members are entitled to claim deduction u/s 80P(2)(a)(i) and also u/s 80P(2)(d) of the IT Act. It was therefore requested by Ld. AR to set-aside the order passed by Ld. PCIT u/s 263 of the IT Act and further requested to confirm the order passed by the Assessing Officer. 7. Ld. DR appearing from the side of the Revenue relied on the order passed by Ld. PCIT and requested to confirm the same. 8. We have heard Ld. counsels from both the sides and perused the material available on record including coordinate bench decisions relied on by Ld. AR. In this regard, we find that Ld. PCIT was of the view that the assessment order dated 30.09.2022 passed by the Assessing Officer for assessment year 2020-21 is erroneous insofar as it is pre-judicial to the interest of the revenue since the assessee is not entitled to claim deduction u/s 80P(2)(a)(i) or u/s 80P(2)(d) of the IT Act, which was allowed by the Assessing Officer. In this regard, we find that Ld. AR relied on the combined 6 decision passed by the coordinate bench of this Tribunal in the lead case of Ajinkaya Madhyamik Shikahak Sewak Sah. Patsanstha Marayadit vs. PCIT order passed in ITA No.186/PUN/2023 order dated 23.05.2023 wherein the coordinate bench of this Tribunal under identical facts has set-aside the proceedings initiated u/s 263 of the IT Act by observing as under :- “10. Even assuming for a moment, there is failure on the part of the Assessing Officer to examine the issue of taxability of interest earned on deposits made with co-operative banks or other banks, in our considered opinion, the power of revision cannot be exercised by ld. PCIT in view of the fact that even on remand to the Assessing Officer, the Assessing Officer is barred from taking a view against the assessee in view of the consistent view taken by this Tribunal that such interest income qualifies for deduction u/s 80P(2)(a)(i) of the Act. Thus, the act of revision by the ld. PCIT would be futile exercise and mere a useless formality. Therefore, we are of the considered opinion that the ld. PCIT was not justified in exercising the power of revision vested with him u/s 263 of the Act in the facts of the present case. Accordingly, the appeal filed by the assessee stands allowed. 11. In the result, the appeal filed by the assessee in ITA No.186/PUN/2023 for A.Y. 2018-19 stands allowed.”

Respectfully following the above decision passed by a coordinate bench of this Tribunal in the case of Ajinkaya Madhyamik Shikahak Sewak Sah. Patsanstha Marayadit vs. PCIT order passed in ITA No.186/PUN/2023 order dated 23.05.2023, we are of the considered opinion that the order passed by Ld. PCIT u/s 263 of the IT Act is not correct since coordinate benches of the 7 Tribunal and also Hon’ble Juri ictional High Court of Bombay are already of the view that the primary credit co-operative society is entitled to claim deduction u/s 80P(2) of the IT Act in the following cases :- (i) Rena Sahkari Sakhar Karkhana Ltd. order dated 07-01-2022. (ii) Sumitra Gramin Bigar Sheti Sahkari Pat Sanstha Maryadit Mahaveer Path order dated 04-11-2022. (iii) Annapurna Nagari Sahkari, Pathsanstha Maryadit Yawal Vs. Income Tax Officer, passed in ITA No.2471/PUN/2024 order dated 24-03-2025 (iv) Principal Commissioner of Income-tax vs. Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd. [2023] 150 taxmann.com 173 (SC) (wherein the order passed by Hon’ble Juri ictional High Court of Bombay was confirmed).

Accordingly, in the light of above decisions cited supra, we do not hesitate to set-aside the order passed by Ld. PCIT u/s 263 of the IT Act since the Assessing Officer is barred from taking a view against the assessee in view of the consistent view taken by this Tribunal that such interest income qualifies for deduction u/s 80P(2) of the IT Act. Thus, the act of revision by Ld. PCIT would be futile exercise. Therefore, we are of the considered opinion that Ld. PCIT was not justified in exercising the power of revision vested with him u/s 263 of the Act in the facts of the present case. Thus, the grounds of appeal raised by the assessee are allowed. 8 11. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 18th day of December, 2025. (MANISH BORAD) JUDICIAL MEMBER

गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER,