SONAI GRAMIN BIGARSHETI SAH PATSANSTHA MARYADIT,INDAPUR, PUNE vs. PRINCIPAL CIT(CENTRAL), PUNE

Sonai Gramin Bigarsheti Sah Patsanstha Maryadit assessment was completed by the Assessing Officer (AO) u/s.143(3) at the declared income. The ld. PCIT, on examination of records, observed that the assessee claimed deduction u/s.80P to the tune of Rs.12,64,247/- on interest income earned from deposits kept with cooperative societies. He, therefore, opined that, the assessment order, allowing deduction u/s.80P on such interest income, was erroneous and prejudicial to the interest of the Revenue. Setting aside the assessment order, he directed the AO to pass the assessment order afresh as per law after allowing opportunity of hearing to the assessee. Aggrieved thereby, the assessee has approached the Tribunal.

We have heard both the sides and gone through the relevant material on record. The assessee is admittedly a Cooperative credit society engaged in providing credit facilities to its members. The ld. PCIT has held the assessment order to be erroneous and prejudicial to the interest of the Revenue only on the ground that the claim of deduction u/s.80P on interest income amounting to Rs.12,64,247/- was not in order. In this regard, 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 Sonai Gramin Bigarsheti Sah Patsanstha Maryadit 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 assessee is also a Co-operative society registered.

Similar view has been taken by the Pune Benches of the Tribunal in several cases including The Sesa Goa Employees Coop.

In the result, the appeal is allowed.