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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the orderdated13.09.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessments Year (“AY”) 2012-13.
The assessee has raised the following grounds of appeal: “1) The Learned Assessing Officer erred in disallowing the claim of deduction made under section 80P(2)(d) of INR 1,28,36,521/-. The Learned Assessing Officer erred in not considering the Co-operative Banks as Co- operative Societies for the purpose of this section. 2) The learned assessing officer erred in not taking cognisance of clarification published by CBDT vide circular no. 133 of 2007 dated
09. May 2007 wherein it was stated that provision of section 80P(4) are not applicable to the co-operative societies which are not co-operative banks. 3) The Ld. Assessing Officer erred in not considering the other case laws mentioned therein of Mumbai ITAT which were pronounced in 2021 much latter than the Totgars case.”
3. Briefly stated, the facts are that the assessee is a Co-Operative Society registered under the Maharashtra State Co-operative Society Act, 1960. For A.Y.2012-13, the assessee filed its return on 27.09.2012 declaring the total income of Rs.3,75,28,519/- and claiming deduction of Rs.1,28,36,521/- under the provisions of sections 80P of the Income Tax Act, 1961 (the “Act”). During the relevant AY, the assessee earned income from fixed deposits with cooperative banks. The original scrutiny assessment was completed by the Ld. Assessing Officer (“AO”)u/s. 143(3) of the Act vide order dated 16.03.2015accepting the income returned by the assessee. The Ld. PCIT invoked the provisions of section 263 of the Act, pursuant to which reassessment was completed u/s. 143(3) r.w.s. 263 of the Act on 08.08.2017 assessing the total income at Rs.2,56,45,373/-. The case was once again picked up by the Ld. PCIT for review u/s. 263 of the Act. The Ld. PCIT vide his order dated 12.03.2020 directed the Ld. AO to assess the income of the assessee afresh after examining the claim of the assessee u/s. 80P of the Act. Pursuant to the directions of the Ld. PCIT, the Ld. AO vide his order dated 16.09.2021 passed u/s. 143(3) r.w.s. 263 and 144B of the Act, disallowed the assessee’s claim of deduction in respect of interest income earned by the assessee from investments made with cooperative banks amounting to Rs.1,28,36,521/- during the relevant AY.
4. Aggrieved, the assessee carried the matter in appeal before the Ld.CIT(A) challenging the above disallowance of claim of deduction u/s.80P(2)(d) made by the Ld. AO. The Ld. CIT(A), after considering the facts of the case and the submissions made by the assessee,dismissed the appeal of the assessee observing that “ Since, the issue of claim of deduction u/s 80P(2)(d) has already been dealt with in appeal order for AY 2013-14 in appellant’s own case, therefore, following the decision in AY 2013-14, the action of the Assessing Officer disallowing the claim of deduction u/s.80P(2)(d) is upheld.”
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that the assessee has rightly claimed the deduction u/s. section 80P(2)(d) of the Act in respect of interest income earned during the relevant A.Y. from co-operative banks, such banks being co- operative societies. He further submitted that the claim of the assessee was accepted in the original assessment framed u/s. 143(3) of the Act on 16.03.2015, a copy of the said assessment order was placed on record. The Ld. PCIT, therefore erred in exercising his revisional powers u/s. 263 of the Act and directing the Ld. AO to reconsider the deduction claimed by the assessee u/s.80P of the Act.
6.1 The Ld. ARsubmitted that the impugned issue has been decided in favour of the assessee by the various decisions of the co-ordinate bench of the Tribunal and relied on the following judicial precedents in support thereof:
(i) Kolhapur District Central Co-op. Bank KanistaSevakanchiSahakarPatsanstha Lad, vs. ITO, ITΑ Νο. 1365/PUN/2023 (A.Y 2018-19) (ii) Rena SahakariSakhar Karkhana Ltd vs. PCIT-2 Aurangabad 2018 (Α.Υ 2013-14) (iii) Hilla Heights as Co-operative vs. ADIT (Α.Υ 2020-21) (iv) Amore Commercial Premises Co-op. Society Ltd. vs. CPC, ITA Nos. 2873 & 2874/M/2022 (Α.Υ. 2020-21) (v) Pune JilhaGramsevakvs. Income Tax Officer, Ward- 12(1), Pune dated 19 March, 2024 (AY 2018-19)
6.2 The Ld. AR further submitted that impugned issue has been decided by the Pune bench of the Tribunal in assessee’s own case for A.Y.2013-14 in vide order dated 27.09.2024.
The Ld. DR, on the other hand, supported the order of the Ld. AO/CIT(A).
We heard the Ld. Representative of the parties and perused the material available on record as well as various judicial precedents cited by the Ld. AR in support of its claim of deduction u/s. 80P of the Act. The facts are not in dispute. During the relevant AY, the assessee has earned interest income from four co-operative banks, namely (i) The Cosmos Co-operative Bank Ltd. (ii) Pune District Central Co-Operative Bank (iii) The ShamraoVitthal Co-operative Bank and (iv) Saraswat Co-operative Bank Ltd and claimed deduction u/s.80P(2)(d) of the Act in respect thereof. Wefind that the impugned issue is no more res-integra in the light of the various decisions of the co-ordinate bench of the Tribunal (supra) relied upon by the Ld. AR. We further observe that the impugned issue is also covered in favour of the assessee by the decision of the Tribunal dated 27.09.2024in assessee’s own case for AY 2013-14. The relevant observations and findings of the Tribunal in the said decision are reproduced below:
“8.We have heard the ld. Counsels from both the sides and perused the material available on record including the case laws furnished by assessee in the paper- book. We find that the ld. CIT(A)/NFAC has confirmed the disallowance made by the Assessing Officer u/s 80P(2)(d) of the IT Act on the basis of judgement of Hon'ble High Court of Karnataka in the case of PCIT, Hubballi vs. Totagars Co- operative Sale Society, 395 ITR 611 order dated 16.06.2017, not being business income of the assessee cooperative society. We find that this issue is squarely covered by various decisions of the Jurisdictional Co-ordinate Benches of this Tribunal, wherein, it has been held that the interest income earned by a co- operative society from any other co-operative society on its investments is eligible for deduction u/s 80P(2)(d) of the IT Act. It is worthwhile to mention here thatthough the co-operative banks pursuant to the insertion of sub-section (4) to section 80P would no more entitle for claim of deduction u/s 80P of the IT Act but as a co-operative bank continues to be a co-operative societies registered under the Co-operative Societies Act in any State, the interest income derived by a co- operative society from its investments held with a co-operative bank would be entitled for claim of deduction u/s 80P(2)(d) of the IT Act. In this regard, we find support from the following decisions passed by the Co-ordinate Benches of this Tribunal :- (i) Kolhapur District Central Co-op. Bank KanistaSevakanchiSahakarPatsanstha Lad, vs. ITO, ITΑ Νο. 1365/PUN/2023. A.Y 2018-19, dated 01.01.2024. (ii) Rena SahakariSakharKarkhana Lid vs. PCI-2 Aurangabad 2018 Α.Υ 2013-14, order dated 07.01.2022 (iii) Hilla Heights as Co-operative ADIT Α.Υ 2020-21, dated 03 04 2023. (iv) Amore Commercial Premises Co-op. Society Ltd. vs. CPC, ITA Nos. 2873 & 2874/M/2022 Α.Υ. 2020-21, dated 17.01.2023 (v) Dhanshree Multistate Cooperative Society Ltd, ITA No.463/PUN/2024 order dated 13-06-2024. (vi) KarmveerBhauraoPatilNagriSahkariPatsansthaMaryadit ITA No. 1045/PUN 2023 order dated 21-02-2024.
Therefore, respectfully following the above decisions, we find that the interest income earned by the assessee co-operative society on its investments made with other co-operative banks being a co-operative society entitles for deduction u/s 80P(2)(d) of the IT Act. We therefore allow ground no.1 raised by the assessee and direct the Assessing Officer to allow the deduction of Rs.1,65,02,105/- u/s 80P(2)(d) of the IT Act.”
9. Respectfully following the decisions (supra) and in the absence of any contrary material brought on record by the Revenue to enable us to take a different view, we set aside the order of the Ld.CIT(A). Accordingly, the grounds raised by the assessee are allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 28th February, 2025.