SASKA NAGARI SAHAKARI PATSANSTHA MARYADIT,KOLHAPUR vs. ASSISTANT DIRECTOR OF INCOME-TAX, CPC, BENGALURU

PDF · subscribers
ITA 43/PUN/2022Status: DisposedITAT Pune21 December 2022AY 2019-206 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that cooperative societies are entitled to deduction under Section 80P(2)(a)(i) on interest income earned from banks, following favorable High Court precedents. It also held that Section 80P(4) does not affect eligibility for deduction under Section 80P(2)(d) on interest income parked with a cooperative bank.

What were the facts?

The assessees, cooperative societies, claimed deduction under Section 80P of the Income Tax Act on interest income earned from cooperative and nationalized banks. The Assessing Officers denied this deduction, which was upheld by the CIT(A).

What were the issues?

Whether cooperative societies are eligible for deduction under Section 80P on interest income earned from banks, and the applicability of Section 80P(4) to such deductions.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(5)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY

For Respondent: Shri Keyur Patel, CIT-DR

consolidated order for the sake of convenience.

2.

There is a delay of 08 days in ITA No.370/PUN/2022. At the outset, the ld. Counsel submitted that the delay pertains to Covid-19 pandemic period. We are satisfied with the reason of the delay.

Therefore, the said delay is condoned and the appeal is admitted for disposal on merits by virtue of the judgment of the Hon’ble Supreme Court in Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08-03-2021 and 421 ITR 314.

3.

For the appeal at Sl.No.1, the assessee has filed written submissions and requested to decide the appeal based on the same.

For the appeals at Sl.No.2 and 3, there is no appearance from the side of the assessees despite notice. We are, therefore, proceeding to dispose those appeals ex parte qua the assessees after hearing the ld. DR.

4.

Succinctly, the assessees in these appeals filed returns claiming deduction u/s.80P of the Act in relation to interest income earned from cooperative banks/nationalized banks. The Assessing

3 Saska Nagari Sahakari Patsanstha Maryadit and others Officers denied the benefit of deduction u/s.80P, which came to be countenanced in the first appeal.

5.

We have heard the ld. DR and Sh. Pramod S. Shingte in respect of and gone through the relevant material on records. Insofar as the allowability of deduction u/s.8P(2)(a)(i) is concerned, we find that the Pune Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit Vs. The Pr.CIT (ITA No.713/PUN/2016) has decided the question of availability of deduction u/s 80P on interest income by noticing that the Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit Vs. ITO (ITA No.604/PN/2014) has allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed by the Hon’ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 Taxman 309 (Kar.) allowing deduction u/s. 80P on interest income and that of the Hon’ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT (2014) 110 DTR 89 (Delhi) not allowing deduction u/s.80P on interest income earned from banks. Both the Hon’ble High Courts took into consideration the ratio laid down in the case of Totgar’s Cooperative Sale Society Ltd. (supra). No direct judgment from the Hon’ble jurisdictional High Court on the point having been 4 Saska Nagari Sahakari Patsanstha Maryadit and others pointed out, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon’ble Karnataka High Court in the (supra). The position continues to remain the same before this Tribunal also. Respectfully following the precedent, we entitle the assesses to the deduction.

6.

Coming to the cases of deduction u/s.80P(2)(d), it is observed that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co- operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force.

The assessees are also Co-operative societies registered under the Act. We, ergo, hold that the assessees in question are entitled to the benefit of deduction u/s 80P(2)(d) of the Act. Similar view has been taken by the Pune Benches of the Tribunal in several cases

5 Saska Nagari Sahakari Patsanstha Maryadit and others including The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT (ITA No.203/PUN/2019, order dated 16-11-2022).

7.

We, thus, overturn the impugned orders and order to grant deduction u/s 80P of the Act in all such cases.

8.

In the result, all the appeals are allowed.

Order pronounced in the Open Court on 21st December, 2022.

More judgments on Section 80P

All 5,069 judgments and leading authorities on Section 80P →

Recent GST High Court judgments

Search GST case law →