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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI R.S. SYAL
आदेश / ORDER PER R.S. SYAL, VP : This appeal by the assessee arises out of the order dated 20-07-2022 passed by the National Faceless Appeal Centre (NFAC), Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act.) in relation to the assessment year 2018-19.
The only issue raised in this appeal is against the denial of deduction u/s.80P(2)(a)(i) on the interest income of Rs.32,03,362/-.
Succinctly, the facts of the case are that the assessee is a credit Cooperative society registered under Maharashtra Cooperative Societies Act, 1960. It is engaged in the business of Sanjivani Nagari Pat Sanstha Ltd., collecting deposits from members and gives them interest on such deposits. A return was filed declaring total income at Nil after claiming deduction of Rs.32,03,362/- u/s.80P(2) of the Act. The assessee’s case was selected for scrutiny. The AO, on perusal of the Profit and loss account, asked the assessee to submit the necessary details, which the assessee complied with. The AO noticed that the assessee earned interest income of Rs.52,84,507/- on term deposits made with the Co-operative Banks, namely, M/s.
Adarniya P.D. Patil Saheb Sah. Bank Ltd., Karad; M/s. The Satara District Co-operative Bank Ltd., Satara; M/s. MSEDCL and M/s.
Axis Bank, which was claimed as eligible u/s.80P of the Act.
However, the AO, after discussing the issue in detail and the various case laws available on the subject, disallowed such interest income amounting to Rs.52,84,507/- and held the same as chargeable under the head ‘Income from other sources.
Eventually, the AO assessed the income of the assessee at Rs.32,03,362/-. The ld, first Appellate Authority affirmed the view point of the AO on this score. Aggrieved thereby, the assessee has come up in appeal before the Tribunal.
Sanjivani Nagari Pat Sanstha Ltd.,
After considering the rival submissions and perusing the relevant material on record, it is seen that the assessee is a co- operative society registered under Maharashtra Cooperative Societies Act, 1960. During the year under consideration, the assessee earned interest amounting to Rs.1,05,06,592/-. Out of such sum, an amount of Rs.52,84,507/- was earned from various Co-operative Banks. The issue of granting deduction u/s 80P on such an income is no more res integra in view of the catena of decisions delivered by the Pune Benches. The Pune Bench in Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT (ITA No.1249/PUN/2018) has held, vide its order dated 07-01-2022, 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 Sanjivani Nagari Pat Sanstha Ltd., Co-operative Societies Act, 1912 or under any law for the time being in force. The assessee is also a Co-operative society registered under the Cooperative Societies Act. Respectfully following the decision of the Division Bench, I overturn the impugned order and direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest earned from various Co-operative Banks.
In the result, the appeal is allowed.
Order pronounced in the Open Court on 15th November, 2022.