INCOME TAX OFFICER WARD-2 PANDHARPUR, PANDHARPUR vs. MOHOL NAGARI SAHAKARI PATPURAVATHA SASTHA MARYADIT, MOHOL

Subsequently vide order dated 26.03.2022 Ld. PCIT, Pune set-aside the assessment order dated 16.12.2019 u/s 263 of the IT Act and directed the Assessing Officer to reframe the assessment.

Aggrieved with the above action of Ld. PCIT, Pune, assessee filed an appeal against the above order passed u/s 263 of the IT Act before this Tribunal.

In the meanwhile i.e. during the pendency of assessee’s appeal before the Tribunal, the Assessing Officer vide order dated 24.03.2023 reframed the assessment u/s 143(3) r.w.s. 263 of the IT Act, and in the absence of proper reply from the assessee, determined the taxable income of Rs.7,51,91,951/- as against the income returned by the assessee at Rs.Nil.

Subsequently, a coordinate bench of this Tribunal vide order dated 22.05.2023 partly allowed the appeal of the assessee wherein 5 Mohol Nagari Sahakri Patpuravatha Sanstha Maryadit it was held that the assessee is entitled to claim deduction u/s 80P(2) of the IT Act and therefore to that extent the order passed u/s 263 of the IT Act was not justified. However, the Tribunal partly approved the order u/s 263 of the IT Act passed by Ld. PCIT, Pune, wherein the Assessing Officer, with regard to the addition u/s 69A of unexplained money, was directed to verify the availability of cash on the date of deposit in the banks and reframe the assessment.

Later, after considering the reply of the assessee, Ld. CIT(A)/NFAC vide order dated 19.01.2025 partly allowed the appeal filed by the assessee against the order dated 16-12-2019 passed u/s 143(3) of the IT Act and allowed ground No.1 & 2 raised by the assessee, and directed the Assessing Officer to delete the addition made on account of disallowance under section 80P(2) of the IT Act. Further, Ld. CIT(A)/NFAC partly allowed ground No.3 raised by the assessee for statistical purposes and directed the Assessing Officer to delete the addition of cash deposit, after necessary verification with regard to the availability of cash balance on the impugned date of deposit in the bank account. Ground No.4 raised by the assessee was dismissed by Ld. CIT(A)/NFAC which 6 Mohol Nagari Sahakri Patpuravatha Sanstha Maryadit was against charging of interest u/s 234A, 234B & 234C of the IT Act.

This time the Revenue being the aggrieved party is in appeal against the above 1st appellate order before this Tribunal in Cross Objection No.23/PUN/2025 against the above appeal of the Revenue and also filed cross appeal against the above 1st appellate order i.e. ITA No.1331/PUN/2025.

It is worthwhile to mention here that on 19-01-2025, Ld. CIT(A)/NFAC also decided the first appeal of the assessee which was filed against the reassessment order dated 24-03-2023 passed u/s 143(3) r.w.s. 263 of the IT Act. In this order Ld. CIT(A)/NFAC partly allowed the appeal of the assessee & allowed deduction u/s 80P(2) of the IT Act to the assessee & regarding other ground further directed the Assessing Officer to do proper investigation conduct necessary enquiry & accordingly decide the matter of cash deposit/unexplained money u/s 69A of the IT Act in accordance with law.

Against the above first appellate order dated 19.01.2025 the Revenue is also in appeal before this Tribunal vide ITA 7 Mohol Nagari Sahakri Patpuravatha Sanstha Maryadit No.718/PUN/2025 & the assessee has filed Cross Objection No.26/PUN/2025 against the above appeal of the Revenue and also filed cross appeal against the above 1st appellate order i.e. ITA No.1332/PUN/2025.

For assessment year 2018-19 - Facts of the case, in brief, are that the assessee furnished its return of income declaring Nil income after claiming deduction of Rs.4,52,14,312/- u/s 80P(2) of the IT Act. The assessment was completed u/s 143(3) of the IT Act by determining taxable income of Rs.4,52,14,312/-. In first appeal, after considering the reply of the assessee, Ld. CIT(A)/NFAC directed the Assessing Officer to allow the deduction u/s 80P(2) of the IT Act. Against the above order of Ld. CIT(A)/NFAC dated 19.01.2025, the Revenue is in appeal before this Tribunal i.e. ITA No.695/PUN/2025. The assessee has also filed Cross Objection No.25/PUN/2025 against the appeal of the Revenue.

For assessment year 2020-21 - Facts of the case, in brief, are that the assessee furnished its return of income declaring Nil income after claiming deduction of Rs.4,51,55,700/- u/s 80P(2) of the IT Act. The assessment was completed on 06.09.2022 u/s 143(3) of the IT Act by determining taxable income of Rs.4,51,55,700/-. In 8 Mohol Nagari Sahakri Patpuravatha Sanstha Maryadit first appeal, after considering the reply of the assessee, Ld. CIT(A)/NFAC vide order dated 03.03.2025 directed the Assessing Officer to allow the deduction u/s 80P(2) of the IT Act. Against the above order of Ld. CIT(A)/NFAC, the Revenue is in appeal before this Tribunal i.e. ITA No.1146/PUN/2025. The assessee has also filed Cross Objection No.24/PUN/2025 against the above appeal of the Revenue.

First, we shall take up the cross appeal of the Revenue as well as of the assessee in for A.Y. 2017-18 for adjudication.

We have heard Ld. counsels from both the sides and perused the material available on record including the copy of decision of coordinate bench of this Tribunal passed in the case of assessee itself for assessment year 2017- 18 in order dated 22.05.2023, wherein the Tribunal has allowed the appeal of the same assessee by observing as under :- “6. In these facts and circumstances of the case, it is observed that the ITO had held that amount of Rs.6,03,95,763/- is not eligible for deduction u/s 80P of the Act but forgot to add the said amount to total income finally calculated by him in the assessment order. In these facts of the case, we agree with the Pr.CIT that the Assessment Order is erroneous and prejudicial to the interest of revenue qua AO’s mistake of not adding the amount which he himself held to be non-eligible. However, this ITAT has repeatedly held that Cooperative Credit Society is eligible for claiming deduction under section 80P(2) of the Act on interest earned by them from Fixed Deposits kept with another cooperative Banks. ITAT Pune in the case of Kundalika Nagari Sahakari Patsanstha Maryadit178 TTJ 381 (Pune - Trib.) has held as under : Quote, “ The assessee has further furnished the break-up of FDs with different co-operative banks at pages 57 to 68 of the Paper Book with sample copies of FDs at pages 69 to 75 of the Paper Book. The claim of the assessee before us is that it was engaged in the business of providing credit facilities to its members, out of loan received from its members itself. The surplus amount which was on account of amount received from its members only, which 10 Mohol Nagari Sahakri Patpuravatha Sanstha Maryadit had not been advanced to any of the members was invested in the banks, against which the said investment was made out of surplus funds available with the assessee, which in turn, were amounts advanced by the members itself. The said parking of funds with the co-operative banks was claimed by the assessee to be in the nature of its business activity as it was the requirement of Maharashtra Cooperative Societies Act, 1960, that 20 to 30% of total deposits are to be parked in the investments with co- operative banks. It is not the case of the Department that the amount invested by the assessee was out of any liabilities due by the assessee. In the absence of the same and following the same parity of reasoning laid down by the Hon'ble High Court of Karnataka in Tumkur Merchants Souharda Credit Co-operative Ltd. (supra) and the facts of the present case being at variance to the facts before the Hon'ble Supreme Court in Totgar Cooperative Sale Society Ltd. (supra), we hold that the assessee is entitled to the claim of deduction under section 80P(2)(a)(i) of the Act.” Unquote.

Thus, the ITAT has repeatedly held that interest earned by Cooperative credit Society from Cooperative bank is eligible for deduction u/s 80P(2) of the Act. Hence, the order u/s 263 is quashed qua the issue of eligibility of the assessee for deduction u/s 80P(2) on Interest earned.”

Respectfully following the above decision passed by coordinate bench of this Tribunal in the case of assessee itself (supra) wherein deduction u/s 80P(2) of the IT Act was allowed to the assessee, we reject the grounds raised

There is delay of 52 days in filing of this appeal which is condoned after no objection from the Ld. DR. In this regard, we find that the assessee has challenged the order passed by Ld. CIT(A)/NFAC to the extent of issuing direction to the Assessing Officer to verify the availability of cash on the date of deposit in the bank. In this regard, we further find that the Counsel of the assessee fairly accepted the fact that in the light of Ld. CIT(A)/NFAC direction the Assessing Officer has already verified the availability 12 Mohol Nagari Sahakri Patpuravatha Sanstha Maryadit of cash on the date of deposit in the bank and no addition has been made by the Assessing Officer on the ground of cash deposit of unexplained money in the bank. Ld. AR also furnished copy of order dated 19-06-2025 passed by the Assessing Officer giving appeal effect wherein income of the assessee for the period under consideration is determined at Rs.Nil. Accordingly, Ld. AR requested before the bench to allow the appeal.

We have heard Ld. counsels from both the sides and perused the material available on record including copy of order dated 19-06-2025 of give effect order passed by the Assessing Officer for the period under consideration, wherein income of the assessee has been determined at Rs.Nil by accepting the return filed by the assessee. Since there remains no grievance to the assessee, the grounds of appeal

Respectfully following the above decision passed by coordinate bench of this Tribunal in the case of assessee itself 14 Mohol Nagari Sahakri Patpuravatha Sanstha Maryadit (supra) wherein deduction u/s 80P(2) of the IT Act was allowed to the assessee, we reject the grounds raised by the Revenue & consequently dismiss the appeal filed by the Revenue.

There is delay of 49 days in filing of this appeal which is condoned after no objection from the Ld. DR. In this regard, we find that the assessee has challenged the order passed by Ld. 15 Mohol Nagari Sahakri Patpuravatha Sanstha Maryadit CIT(A)/NFAC to the extent of issuing direction to the Assessing Officer to verify the availability of cash on the date of deposit in the bank. In this regard, we further find that the Counsel of the assessee fairly accepted the fact that in the light of Ld. CIT(A)/NFAC direction the Assessing Officer has already verified the availability of cash on the date of deposit in the bank and no addition has been made by the Assessing Officer on the ground of cash deposit of unexplained money in the bank. Ld. AR also furnished copy of order dated 19-06-2025 passed by the Assessing Officer giving appeal effect wherein income of the assessee for the period under consideration is determined at Rs.Nil. Accordingly, Ld. AR requested before the bench to allow the appeal.

We have heard Ld. counsels from both the sides and perused the material available on record including copy of order dated 19- 06-2025 of give effect order passed by the Assessing Officer for the period under consideration, wherein income of the assessee has been determined at Rs.Nil by accepting the return filed by the assessee. Since there remains no grievance to the assessee, the grounds of appeal raised by the assessee become infructuous and are accordingly dismissed.

Respectfully following the above decision passed by coordinate bench of this Tribunal in the case of assessee itself (supra) wherein deduction u/s 80P(2) of the IT Act was allowed to the assessee, we reject the grounds raised by the Revenue & consequently dismiss the appeal filed by the Revenue.

Respectfully following the above decision passed by coordinate bench of this Tribunal in the case of assessee itself (supra) wherein deduction u/s 80P(2) of the IT Act was allowed to the assessee, we reject the grounds raised by the Revenue & consequently dismiss the appeal filed by the Revenue.

Resultantly, all the above captioned cross appeals filed by the Revenue as well as by the assessee and the cross objections filed by