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Facts
The assessee filed an appeal after a delay of 305 days against an order that denied deduction for interest income earned from cooperative banks. The assessee claimed this interest income was eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
Held
The Tribunal condoned the delay in filing the appeal. It held that interest income earned by a cooperative society from its investments in other cooperative banks is eligible for deduction under Section 80P(2)(d) of the Act, relying on previous judgments.
Key Issues
Whether interest income earned by a cooperative society from deposits/investments with cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
Sections Cited
250, 143(3), 143(3A), 143(3B), 80P, 80P(2)(d)
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD & MS. ASTHA CHANDRA
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee is directed against the order dated 15.12.2023 framed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) arising out of Assessment Order dated 19.01.2021 passed u/s.143(3) r.w.s.143(3A) & 143(3B) of the Act.
Registry has information that there is delay of 305 days in filing the appeal before the Tribunal. Application for condonation along with the affidavit has been filed by the assessee explaining the reasons for delay.
After hearing both the sides and considering the reasons giving rise to the delay and also placing reliance on the judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 2 SCC 107) we condone the delay of 305 days and admit the appeal for adjudication.
The only issue is regarding denial of deduction u/s.80P of the Act for the interest income from Cooperative Banks amounting to Rs.29,57,547/-. Ld. Counsel for the assessee referring to the decision of Coordinate Bench in the case of Oberoi Spring Cooperative Housing Society Limited in order dated 08.05.2023 and also in the case of The Navyug Cooperative Housing Society Ltd. Vs. DCIT in order dated 10.05.2024 and various other decisions of Coordinate Benches placed in the case law paper book stated that interest income earned from deposits/ investments with Cooperative Banks is also eligible for deduction u/s.80P(2)(d) of the Act. Ld. Departmental Representative failed to controvert this contention.
We have heard the rival contentions and perused the record placed before us. Undisputedly, the assessee has earned interest of Rs.29,57,547/- from investments with Cooperative Banks and the deduction claimed u/s.80P(2)(d) has been denied by the ld.CIT(A).
Section 80P(2)(d) of the Act provides that the sum received in respect of any income by way of interest or dividend derived by Cooperative Society from its investment with any other Cooperative Society, the whole of such income is eligible for deduction u/s.80P of the Act. We observe that section 80P(2)(d) of the Act refers to the interest from Cooperative Society but it has been consistently held by this Tribunal (Pune Benches) that Cooperative banks are basically Cooperative Societies except that they get license for doing the banking business. We find that this Tribunal in case of Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. ITO in dated 01.01.2024 dealing with similar issue after placing reliance on another decision of this Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in dated 27.05.2022 has held that the interest earned from deposits with Cooperative Banks are also eligible for deduction u/s.80P(2)(d) of the Act. We therefore respectfully following the above referred decisions hold that the assessee is eligible for deduction u/s.80P(2)(d) of the Act for the alleged interest income earned from Cooperative Banks. Findings of the ld. CIT(A) is set-aside and effective grounds of appeal raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on this 05th day of May, 2025.