HAVELI TALUKA VEEJ KAMGAR SAHAKARI PATHSANSTHA MARYADIT,PUNE vs. INCOME TAX OFFICER WARD 6 (1) PUNE, PMT BUILDING, SWARGATE

Alternatively, the interest income earned by the appellant from the investments in a co-operative bank is also eligible for deduction under section 80P (2) (d) of the Income Tax Act, 1961. 3. The Ld. CIT (A) has wrongly confirmed the disallowance of deduction u/s. 80P of commission receipts of Rs.53,52,723/- after deducting the salary expenses of Rs.3,00,202/- from the total commission receipts of Rs.56,52,925/-. Being the same income is received from the MSEB on account of running cash counter for MSEB bill payments and the same is treated as Income from Other sources.

The Appellant crave leave to add, delete, amend, alter, vary and/or withdraw all or any one of the above grounds of appeal.”

Briefly stated, the facts of the case are that the assessee is a Co- operative Society engaged in carrying out banking business providing credit facility to its members. It is registered under the Maharashtra State Co-operative Society Act, 1960. It filed its return of income on 31.10.2017 for AY 2017-18 declaring income at Rs.Nil. The return was processed u/s 143(1) of the Income Tax Act, 1961 (the “Act”). Subsequently, the case was selected for scrutiny through CASS. Statutory notice(s) u/s 143(2)/142(1) of the Act were issued calling for various details. During the assessment proceedings, the Ld. Assessing Officer (“AO”) found that the assessee has earned interest of Rs.8,84,993/- on investments and Rs.56,52,925/- as cash counter commission and claimed deduction u/s 80P of the Act in respect of the same. The Ld. AO issued show cause notice on 22.11.2019 to which the assessee filed its reply. However, the said reply of the assessee was not acceptable to the Ld. AO. According to the Ld. AO the assessee has earned interest of Rs.8,84,993/- on capital NRD deposits with PDCC Bank. Since, the investments are not in a Co- operative Society, the deductions availed by the assessee u/s 80P(2)(a)(i)/80P(2)(d) of the Act was incorrect. Further, the Ld. AO observed that the assessee has earned commission income of Rs.56,52,925/- from MSEB on account of running cash counter for MSEB bill payments. After reducing the salary expenses of Rs.3,00,202/- from the commission receipts of Rs.56,52,925/-, the Ld. AO added the amount of Rs.53,52,723/- to the income of the assessee as the income from other sources. The Ld. AO, therefore, completed the assessment on total income of Rs.62,37,716/- on 30.11.2019 u/s 143(3) of the Act by making an addition of-(i) Rs.8,84,993/- on account of disallowance of claim of deduction u/s 80P(2)(a)(i)/80P(2)(d) of the Act in respect of interest earned from PDCC Bank and (ii) on account of income of Rs.53,52,723/-, to the Nil income retuned by the assessee.

Aggrieved, the assessee filed appeal before the Ld. CIT(A) who dismissed the assessee’s appeal by recording the following findings and observations : Interest income of Rs.8,84,993/-

1.12 From the above legal proposition laid down by the Hon'ble Supreme Court and Hon'ble High Court Madras, it is quite obvious that the appellant, who is merely a 'Co-Operative Credit Society', and does not possess a licence from the Reserve Bank of India, cannot conduct the banking activities at par with that of a 'Cooperative Bank'. The Hon'ble Supreme Court's observations made in the case of 'Mavilayi (supra) has also applied the ratio decidendi of its judgment rendered in Citizen Co-operative Society Limited V. Assistant Commissioner of Income-Tax, Circle -9(1), Hyderabad (397 ITR 1). Therefore, in view of the law laid down by the Hon'ble Supreme Court in the case of Citizen Co-operative Society Limited V. Assistant Commissioner of Income- Tax, Circle -9(1), Hyderabad (397 ITR 1) that the Cooperative Societies, who are providing the credit facilities to their members their operations would be confined to their members only. As such, it is amply clear that the appellant under the Appeal, a Co-operative Credit Society, while earning the 'Commission Income' from 'MSEB', has conducted purely the commercial activities, which under no stretch of imagination can be said to be attributable to any activity falling under the category of those specified for deduction u/s 80P(2)(a)(i). Moreover, in view of the law enunciated by the Hon'ble Supreme Court in the case of there is lack of mutuality. The foremost condition, to avail the benefit of 'Mutuality' as mentioned above, is that 'no person can earn from him'. However, in this case the appellant has received Commission from MSEB, who is nothing but a 'Third Party' to the Appellant Society and cannot be regarded as 'Member' of the Appellant. Therefore, on account of this very reason also the appellant's claim u/s 80P(2)(a)(i) is not sustainable in the eyes of law. The case laws relied by the appellant, are of no avail to it, keeping in view the discussion made hereinabove, Accordingly, addition made by AO amounting Rs.53,52,723/- is justified and sustainable in the eyes of law and the same is Thus Ground No. 2 of Appeal is dismissed.

Dissatisfied, the assessee is in appeal before the Tribunal challenging the decision of the Ld. CIT(A) and all the grounds of appeal relate thereto.

The Ld. AR submitted that the impugned issues are covered in favour of the assessee by placing reliance on several decisions of the Co- ordinate Bench of this Tribunal allowing the deduction claimed in respect of interest earned from the Co-operative Banks u/s 80P(2)(a)(i) or 80P(2)(d) of the Act as well as commission earned from MSEB. As regards the addition made by the Ld. AO and confirmed by the Ld. CIT(A) on account of commission received from MSEB, the Ld. AR further submitted that the impugned addition has been deleted by the Ld. CIT(A) in assessee’s own case for preceding AY 2014-15 wherein the Ld. CIT(A) relying on the decision of Juri ictional Bombay High Court in the case of CIT Vs. Ahmednagar District Central Co-operative Bank Ltd. (2003) 264 ITR 38

We have heard the Ld. Representatives of the parties and perused the material on record as well as various judicial precedents relied upon by the Ld. AR. The facts are not in dispute. The assessee is a credit Co- operative Society and has earned interest of Rs.8,84,993/- from investments in fixed deposits/NRD deposits with PDCC Bank and Rs.53,52,723/- (net of salary expenses) as commission income from MSEB on account of running cash counter for MSEB bill payments and has claimed deduction u/s 80P of the Act in respect of the said income(s) for the relevant AY. We observe that the impugned issue(s) are no more res- integra and have been decided in favour of the assessee by the various

As regards the claim of deduction on interest income from investments in the Co-operative Banks u/s 80P(2)(a)(i)/80P(2)(d) of the Act, the Co-ordinate Bench of Pune Tribunal in the case of Shri Vivekvardhini Nagari Sahakari patsanstha Ltd. Vs. ITO in ITA No. 888/PUN/2024, dated 05.08.2024 has held as under : “8. As regards, the issue as to the allowability of exemption under the provisions of section 80P(2)(a)(i) in respect of interest income earned by a cooperative society from the cooperative banks/commercial banks, there is a cleavage of judicial opinion among several High Courts on the issue of eligibility of this kind of income for exemption u/s. 80P(2)(a)(i) of the Act. The Hon’ble Punjab & Haryana High Court in the case of CIT vs. Punjab State Cooperative Federation of Housing Building Societies Ltd. 11 taxmann.com 448, the Hon’ble Gujarat High Court in the case of State Bank of India Vs. CIT 389 ITR 578 (Guj.), the Hon’ble Delhi High Court in the case of Mantola Co-operative Thrift & Credit Society Ltd. Vs. CIT 50 taxmann.com 278, the Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Punjab State Cooperative Agricultural Development Bank Ltd. 389 ITR 68 and the Hon’ble Cooperative Credit Society Ltd. 390 ITR 524 took a view that the income arising on the surplus invested in short term deposits and securities cannot be attributed to the activities of the society and, therefore, not eligible for exemption u/s.80P(2)(a)(i) of the Act. However, the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 taxmann.com 309 (Kar.) and the Hon’ble Telangana and Hon’ble Andhra Pradesh High Court in the case of Vaveru Co-operative Rural Bank Ltd. v CIT [(2017) 396 ITR 371 took a view that such interest income is attributable to the activities of the society and, therefore, eligible for exemption u/s 80P(2)(a)(i) of the Act. Similar view has been taken by the Hon’ble Calcutta High Court in the case of PCIT vs. Gunja Samabay Krishi Unnayan Samity Ltd., 147 taxmann.com 518 (Calcutta) and the Hon’ble Madras High Court in the case of Chennai Central Cooperative Bank Ltd. vs. ITO, 148 taxmann.com 17 (Madras). The Coordinate Bench of Pune Benches in the case of M/s. Ratnatray Gramin Bigar Sheti Sah. Pat Sanstha Maryadit Vs. ITO (ITA Nos.559/560/PUN/2018, dated 11-12-2018) taken view in favour of the assessee following the judgment of Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). Following the decision of the Coordinate Bench of the Tribunal, we are of the considered opinion that the interest income earned on fixed deposits with cooperative bank/scheduled bank partakes character of the business income, which is eligible for deduction u/s 80P(2)(a)(i) of the Act. Therefore, we direct the Assessing Officer to allow the exemption u/s.80P(2)(a)(i) and section 80P(2)(d) of the Act. Thus, the grounds of appeal filed by the assessee stand allowed.”

1 The claim of the assessee also finds support from the decision of the Co-ordinate Bench of this Tribunal in the case of Yogiraj Nagari Sahkari Patsanstha Maryadit Vs. ITO in ITA No. 1152/PUN/2023, dated 06.06.2024 wherein the Tribunal decided the impugned issue in favour of the assessee by observing as under : “8. The Co-ordinate Bench of the Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit

Even the decision of Pune Bench of the Tribunal in the case of Sant taxmann.com 10 wherein the Tribunal after making reference to the decisions of the Hon’ble Supreme Court in the case of Totgars Cooperative Sales Society Ltd. (supra) and having noticed the divergent views of the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-op. Ltd. vs. ITO, 55 taxmann.com 447 and the Hon’ble Delhi High Court in the case of Mantola taxmann.com 278, decision of the Hon’ble Delhi High Court in the case of Mantola Cooperative Thrift Credit Society Ltd. (supra) had not been preferred to view of the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-op. Ltd. (supra). The relevant observation of the Pune Bench of the Tribunal in the case (supra) is as under :-

2 Limited in ITA No. 1338/PUN/2024, dated 17.10.2024 the Pune Tribunal allowed the claim of the assessee u/s 80P(2)(d) on the impugned issue by observing and holding as under : “8. The Co-ordinate Bench of the Pune Tribunal in the case of ITO Vs. Goreshwar Gramin Bigar Sheti Sahakari Pat Sanstha Maryadit in ITA No. 1191/PUN/2023, dated 04.06.2024 decided the impugned issue in favour of the assessee by holding as under : “4. Suffice to say, the Revenue’s sole substantive grievance canvassed in the instant appeal is only for reviving the learned Assessing Officer’s action disallowing the assessee’s sec.80P deduction claim representing interest income from co-operative society(ies)/bank(s)/nationalized bank(s) involving varying sums; as the case may be. It is in this factual backdrop that we first of all note that the tribunal in The Rena Sahakari Sakhar Karkhana Ltd. vs. PCIT’s case has already rejected the Revenue’s stand regarding interest income derived from co-operative bank(s)/institution(s) in ITA.No.1249/PUN./2018 dated 07.01.2022 reading as under :

The assessee being aggrieved with the order of the Pr.CIT has carried the matter in appeal before us. As the present appeal involved a delay of 52 days, therefore, the ld. A.R took us through the reasons leading to the same. It was submitted by the ld. A.R that as the then counsel of the assessee society who was looking after its tax matters, viz. Shr. Ravikiran Pandurang Todkar, Chartered Accountant was taken unwell due to kidney failure and had undergone kidney transplant, therefore, due to his unavailability the appeal could not be filed within the stipulated time period. Our attention was drawn towards the „affidavit‟ of the assessee society wherein the aforesaid facts were deposed. On the basis of the aforesaid facts, it was submitted by the ld. A.R that the delay involved in filing of the present appeal in all fairness may be condoned. Per contra, the ld. D.R did not object to the seeking of condonation of the delay in filing of the appeal by the assessee society. After giving a thoughtful consideration, we are of the considered view, that as there were justifiable reasons leading to delay on the part of the assessee in filing of the present appeal before us, therefore, the same merits to be condoned.

On merits, it was submitted by the ld. A.R, that as the A.O while framing the assessment had after making necessary verifications taken a plausible view, therefore, the Pr. CIT had exceeded his juri iction by seeking to review the order passed by him in the garb of the revisional powers vested with him under Sec.263 of the Act. It was submitted by the ld. A.R, that the issue as regards the eligibility of the assessee for claim of deduction under Sec.80P(2)(d) on interest income derived from investments/deposits lying with co-operative banks was squarely covered by the various orders of the coordinate benches of the Tribunal viz., (i). M/s Solitaire CHS Ltd. vs. Pr. CIT, ITA No. 3155/Mum/2019; dated 29.11.2019 ( ITAT “G” Bench, Mumbai); Kaliandas Udyog Bhavan Premises Co-op Society Ltd. Vs. ITO-21(2)(1), Mumbai, ITA No. 6547/Mum/2017 (ITAT Mumbai); and (iii). Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT, Circle-3, Aurangabad, ITA No, 308/Pun/2018 (ITAT Pune). On the basis of his aforesaid contentions, it was averred by the ld. A.R that as the Pr. CIT had exceeded his juri iction and had not only sought to review the plausible view that was taken by the A.O after necessary deliberations which was in conformity with the order of the juri ictional bench of the Tribunal, therefore, his order may be vacated and that of the A.O be restored.

Per contra, the ld. Departmental Representative (for short “D.R”) relied on the order passed by the Pr. CIT under Sec.263 of the Act. It was submitted by the ld. D.R, that as the assessee was not eligible for claim of deduction under Sec.80P on the interest income received on the investments/deposits lying with the co-operative banks, therefore, the Pr. CIT finding

We have heard the ld. authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Our indulgence in the present appeal has been sought, for adjudicating, as to whether or not the claim of the assessee for deduction under section 80P(2)(d) in respect of interest income earned from the investments/deposits made with the co-operative banks is in order. In our considered view, the issue involved in the present appeal hinges around the adjudication of the scope and gamut of sub-section (4) of Sec. 80P as had been made available on the statute, vide the Finance Act 2006, with effect from 01.04.2007. On a perusal of the order passed by the Pr. CIT under Sec. 263 of the Act, we find, that he was of the view that pursuant to insertion of sub-section (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2)(d) in respect of the interest income that was earned on the amounts which were parked as investments/deposits with the co-operative bank, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. Observing, that the co-operative banks from where the assessee was in receipt of interest income were not cooperative societies, the Pr. CIT was of the view that the interest income earned on such investments/deposits would not be eligible for deduction under Sec. 80P(2)(d) of the Act.

After necessary deliberations, we are unable to persuade ourselves to concur with the view taken by the Pr. CIT. Before proceeding any further, we may herein cull out the relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. Where in the case of an assessee being a cooperative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in subsection (2), in computing the total income of the assessee.

In so far the judicial pronouncements that have been relied upon by the ld. A.R are concerned, we find that the issue that a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income derived from its investments held with a cooperative bank is covered in favour of the assessee in the following cases: (i). M/s 3155/Mum/2019; dated 29.11.2019 ( ITAT “G” Bench, Mumbai);

Be that as it may, in our considered view, as the A.O while framing the assessment had taken a possible view, and allowed the assessee’s claim for deduction under Sec. 80P(2)(d) on the interest income earned on its investments/deposits with co-operative banks, therefore, the Pr. CIT was in error in exercising his revisional juri iction u/s 263 of the Act for dislodging the same. Accordingly, finding no justification on the part of the Pr. CIT, who in exercise of his powers under Sec. 263 of the Act, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we set-aside his order and restore the order passed by the A.O under Sec. 143(3), dated 07.03.2016.”

So far as the assessee’s interest income from nationalized bank(s) and “treasury” is concerned, it goes without saying that the learned NFAC has already directed exclusion thereof which has nowhere been disputed in the instant appeal. We hardly need to adopt the same in the Revenue’s instant appeal in very terms. Ordered accordingly.

This Revenue’s appeal is dismissed in above terms.”

So far as the exclusion of interest received by the assessee from commercial banks and other institutions as directed by the Ld. CIT(A)/NFAC is concerned, the facts on record reveals that the assessee in the relevant AY 2020-21 has earned interest income from investments in other Co-operative Banks and Co-operative Societies and not from commercial bank(s)/other institutions. Nothing has been brought on record by the Revenue to controvert the findings of Ld. CIT(A)/NFAC in this regard.

In the light of the factual and legal position set out above, we hereby dismiss the ground Nos. 1 to 4 raised by the Revenue and direct the Ld. AO to allow the deduction of interest income of Rs.1,93,04,098/- claimed by the assessee u/s 80P(2)(d) of the Act as per fact and law. We order accordingly.”

As regards the claim of deduction in respect of commission income received by the assessee from MSEB as cash counter commission, we observe that the Ld. CIT(A) has allowed the said claim of the assessee for AY 2014-15 relying on the decision(s) of the Juri ictional Bombay High Court in the case of Ahmednagar District Central Co-operative Bank Ltd. (supra) and in the case of Amravati District Central Co-operative Bank Ltd. (supra) and the Revenue seems to have not challenged the said decision of the Ld. CIT(A) as nothing has been brought on record by the Revenue before us in respect of the same.

1 The Hon’ble Bombay High Court in the case of Ahmednagar District Central Co-operative Bank Ltd. (supra) decided the impugned issue in favour of the assessee by observing and holding as under : “6. At the outset, we would like to deal with the main contention advanced on behalf of the Department. Section 5(b) defines "banking" to mean acceptance of deposits for the purpose of lending or investment whereas, Section 6(1) states, inter alia, that in addition to the business of banking, a banking company may engage in the following forms of business as enumerated in Section 6(1)(a) to (o). Therefore, there is a clear dichotomy between the business of banking and other forms of business. To take an example, under Section 6(1)(a) providing of safe deposit vaults to the customer is mentioned. In the case of Mehsana District Central Co-operative Bank Ltd. v. ITO [2001] 251 ITR 522, the Supreme Court has held that the income derived by the co-operative bank by way of rent from the customer for enjoying safe deposit vault as a facility, would squarely come under Section 6(1)(a) of the Banking Regulation Act and that such income derived by the assessee-bank from hiring out safe deposit vaults was income from the business of banking and, therefore, deductible under Section 80P(2)(a)(i) of the Income-tax Act. Now, in the present case, MSEB and MPCS are the public undertakings. Both these public undertakings were the customers of the assessee-banks. They were having current account with the assessee-bank. The assessee-bank undertook on behalf of these two customers the work of collecting electricity dues from the consumers of electricity who were charged bills by the two public undertakings. This was a facility given by the assessee-bank to the aforestated two public undertakings who were their customers. Banking, today, covers a large number of activities. With globalisation, banking is not restricted to receiving deposits for the purposes of lending. Banks offer various facilities to its customers. They provide lockers, safe deposit vaults, finance for margin trading, collecting dues and charges for and on behalf of the Government, local authority, MTNL, BEST, MSEB, etc. Section 6(1)(a) of the Banking Regulation Act is an enabling provision. It provides for various forms of business akin to banking. Therefore, Section 6(1) states, inter alia, that in addition to the banking business, a banking company may engage in specified forms of business enumerated in Section 6(1)(a) to (o). We are confining our case to the activity of the bank collecting charges for and on behalf of MSEB, MPCS for commission/fees. The construction put by the Department on the word "banking" is very narrow. It is true that, in this case,

Before concluding, we wish to clarity that we find merit in the alternative argument advanced on behalf of the Department that each activity/form of business enumerated in Section 6(1) has to be scrutinised. That, per se, the activities/forms of business enumerated in Section 6(1)(a) to (o) may not attract the reliefs under Section 80P(2)(a)(i), We are, therefore, confining our judgment to the facts of this case which we have decided in the light of the judgment of the Supreme Court in the case of Mehsana District Central Co- operative Bank Ltd. [2001] 251 ITR 522.”

2 Similarly, the subsequent decision of the Hon’ble Bombay High Court in the case of Amravati District Central Co-operative Bank Ltd. (supra) considered the question; “ii] Whether on the fact and in the circumstances of the case the learned ITAT was justified in holding that the assessee is entitled to deduction u/s 80P(2)(a) of an 3 ITL 73.09.odt amount Rs. 43,75,229/- being commission on electricity bill even though such as activity was in addition to the carrying on the business of banking?" and held as under : “6] With the assistance of the respective Counsel, we have perused the judgment of the Hon'ble Apex Court in case Commissioner of 4 ITL 73.09.odt Income Tax vs Nawanshahar Central Co-op. Bank Ltd, reported at (2012) 349 ITR 689 (SC). In this case, the Hon'ble Apex Court has considered the income from underwriting commission for eligibility under Section 80P. It has relied upon the earlier judgment in case of Commissioner of Income Tax, Jalandhar vs Nawanshahar Central Cooperative Bank Limited and dismissed the challenge as raised by the Department. Thus, the Hon'ble Apex Court has found that the income derived by the Cooperative Bank from underwriting commission and interest on PSEB Bonds and IDBI Bonds is eligible for the deductions.

3 The case of the assessee also finds support by the order of the Co- ordinate Bench of the Pune Tribunal in the case of Banganga Nagri Sah. Patsanstha Ltd. Vs. ITO in ITA No. 873/PUN/2014, dated 31.03.2016 and in the case of ITO Vs. Vijkamgar Co-operative Credit Society Ltd. in ITA No. 1247/PN/2013, dated 29.05.2014. 10.4 In the case of Banganga Nagri Sah. Patsanstha Ltd. (supra), the Tribunal held as under : “6. We have heard the submissions made by the ld. DR. We have also perused the orders of the authorities below and the written submissions filed by the assessee. The assessee in appeal has assailed the order of Commissioner of Income Tax (Appeals) in disallowing deduction u/s. 80P(2) in respect of incomes earned by the assessee from the following activities : 1) Locker Rent 2) Ambulance Rent 3) Commission on Collection of MSEB bills 4) Health Club

As regards withdrawal of deduction of Rs.50,000/- as allowed by the Assessing Officer under section 80P(2)(c), we find merit in the plea of the assessee that a co-operative society engaged in any business activity which is not otherwise eligible for deduction under section 80P(2)(a) or (b), in such a scenario, it is eligible for deduction to the extent of Rs.50,000/- as per plain provisions of the Act. We also find that the action of the CIT(A) in withdrawing the aforesaid deduction without affording the opportunity to the assessee in this regard also offends the provisions of the Act as well as principles of natural justice. In the light of the aforesaid, we hold that the assessee is entitled to deduction under section 80P(2)(c)(ii) of the Act in respect of business activities such as running of Ambulance, Health Club fee etc. which are not eligible for deduction under section 80P(2)(a) or 80P(2)(b) of the Act. In the light of the aforesaid observations, the assessee gets part relief in terms of above.”

1 In appeal, the CIT(A) has allowed the same following the decision of Hon’ble Bombay High Court in the case of CIT Vs. Ahmednagar District Central Co-operative Bank Ltd. The same has been opposed before us on behalf of revenue.

2 We find that the business activity of credit co-operative society and co- operative banks are similar in respect of accepting deposits, providing credit facilities and also carrying on activity of electricity bills, telephone bills collection centre. The Hon’ble Bombay High Court in the case of CIT Vs. Ahmednagar District Central Co-operative Bank Ltd. (2003) 264 ITR 38 (Bom) has laid down that the activity of collecting bills, dues and charges for and on behalf of government, local authority, MTNL, BEST, MSEB, etc. is akin to banking activity and is eligible for deduction u/s. 80P(2)(a)(i). In view of above, the CIT(A) was justified in directing the Assessing Officer to allow the deduction u/s. 80P(2)(a)(i) in respect of the said income of ₹ 1,74,516/-. We uphold the same.”

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) on both the issue(s) involved in the present appeal. Accordingly, ground Nos. 1 to 3 raised by the assessee are allowed.

In the result, the appeal of the assessee is allowed.

अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File.