INCOME TAX OFFICER vs. MAHARASHTRA BANK EMPLOYEES CO-OP CREDIT SOCIETY LTD, PUNE

The Revenue in ITA No.239/PUN/2017, relating to assessment year 2009-10 has raised the following grounds of appeal:- “1. On the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in holding that the re-opening of the assessment u/s. 147 of the IT Act, 1961 is without juri iction, void and illegal.

The order of the Commissioner of Income Tax (Appeals) is contrary to law and the facts and circumstances of the case.

On the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the assessee society was eligible for deduction u/s. 80P(2)(a)(i) of the Act in respect of interest income on deposits with non co-operative banks.

On the similar facts and circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the Hon'ble Apex Court's decision in the case of Totgars Co-operative Sale Society Ltd. Vs ITO reported in 322 ITR (2010).

For this and such other reasons as may be urged at the time of hearing, the order of the CIT(A) be vacated and that of the Assessing Officer be restored.

The appellant craves, leave to add, amend, alter or delete any of the above grounds of appeal during the course of appellate proceedings before the Hon'ble Tribunal.”

Both the appeals filed by the Revenue on similar issue were heard together and are being disposed of by this consolidated order for the sake of convenience.

The ld. AR for the Revenue at the outset pointed that the issue of claim of deduction under section 80P(2)(a)(i) of the Act in respect of interest income on deposits with non co-operative banks and saving fund account stands covered by the order of Tribunal in assessee’s own case in ITA Nos.454 to 456/PUN/2015 relating to assessment years 2007-08, 2008-09 and 2010-11, order dated 22.12.2017. ITA Nos.239 & 240/PUN/2017 3

The ld. DR for the Revenue admitted that the issue has been settled by the Hon’ble Pune Bench of Tribunal in assessee’s own case and pointed that the assessee is not entitled to claim the said benefit on the interest income from the saving fund account. However, he placed reliance on the respective orders of Assessing Officer.

We have heard the rival contentions and perused the record. The issue which arises in the present appeal is against the order of Commissioner of Income Tax (Appeals) in holding that the interest income received on FDRs with Scheduled Bank i.e. Bank of Maharashtra by the assessee society, was entitled to claim of deduction under section 80P(2)(a)(i) of the Act. We find that the similar issue arose before the Tribunal in assessee’s own case (supra) and the Tribunal had vide paras 11 to 19 held that the assessee is entitled to claim the benefit of deduction under section 80P(2)(a)(i) of the Act on the interest income received on FDRs with Bank of Maharashtra i.e. a non co-operative bank; but held that the interest on saving fund account with the same bank were taxable in the hands of the assessee. The relevant findings of the Tribunal are as under :