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Facts
The appellant, Shri Viroba Nagari Sahakari Patsanstha Maryadit, a co-operative society, filed appeals against orders denying deduction under Section 80P(2)(d) for interest income earned from deposits with Co-operative Banks for A.Y. 2017-18, 2018-19, and 2020-21. A delay in filing these appeals was condoned by the Tribunal due to issues with the accountant's email ID.
Held
The Tribunal held that co-operative banks are essentially co-operative societies, and therefore, the interest income earned by the assessee from deposits with co-operative banks is eligible for deduction under Section 80P(2)(d). The decision was based on a consistent line of previous tribunal rulings, and the Assessing Officer was directed to grant the deduction.
Key Issues
Whether interest income earned by a co-operative society from deposits with co-operative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
Sections Cited
250, 80P(2)(d), 194A(3)(v)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD & SHRI S.S. VISWANETHRA RAVI
The captioned three appeals pertaining to the Assessment Years 2017-18, 2018-19 and 2020-21 at the instance of assessee are directed against the separate orders passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short „the Act‟) which inturn are arising out of the respective Assessment orders.
Registry has informed that is delayed by 439 days, & 371/PUN/2025 are delayed by 408 days respectively. Affidavit has been filed explaining the reasons for the said delay. After hearing both the sides, we observe that the main reason for the delay was on account of email id of the employee who was working as Accountant in the society but left the job in August, 2023. Due to this reason the impugned orders which were passed in the year 2023 could not be noticed by the assessee society. Subsequently, when new email id was registered on the e-portal in the January, 2025 penalty notices were received through which the assessee society came to know about the impugned orders and then had filed the instant appeals. Considering the reasons mentioned in the affidavit and also taking guidance from the judgment of the Hon‟ble Supreme Court in the case of Collector Land Acquisition Vs. MST Katiji (1987) 167 ITR 471 (SC), we find that the assessee would not have gained from delaying the appeal and therefore condone the delay and admit the instant appeals for adjudication on merits.
Common issue raised in all these three appeals are as to whether the assessee is eligible for deduction u/s. 80P(2)(d) of the Act for the interest income earned from investments/ deposits with Co-operative Banks.
The Ld. Counsel for the assessee at the outset stated that the issue is squarely covered in favour of the assessee by the plethora of decisions and therefore the assessee deserves to succeed.
On the other hand, the Ld. Departmental Representative referred to the impugned orders and also brought our attention to section 194A(3)(5) of the Act stating that Co-operative Banks are considered separate from Co-operative Society.
We have heard the rival contentions and perused the record placed before us. In the instant three appeals, the common issue is as to whether the assessee is eligible for deduction u/s 80P(2)(d) of the Act for the interest income earned from the deposits held with Pune District Central Co-operative Bank. We find that this issue are whether interest of Co- operative Bank is eligible for deduction u/s 80P(2)(d) of the Act has been consistently held to be allowable u/s 80P(2)(d) of the Act by catena of decisions by this Tribunal. It has been held that since the Co-operative Banks are basically Co-operative Societies, therefore, the interest income earned from Co- operative Bank is also to be treated as interest income earned from Co-operative Society. Reliance placed on the decision of this Tribunal in the case of Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in dated 27.05.2022. Respectfully following the decision referred (supra) we are inclined to hold that the assessee deserves to succeed on the issue raised in the instant appeals and the Ld. Assessing Officer is directed to grant the deduction u/s 80P(2)(d) of the Act for the interest income earned from the Co-operative Banks during the impugned years. Effective grounds of appeals raised in the instant appeals are allowed.
In the result, all the three appeals of the assessee are allowed.
Order pronounced on this 28th day of March, 2025.