THE TRIPLICANE COOP CREDIT SOCIETY LTD.,CHENNAI vs. ITO, WARD-9(1), CHENNAI

The Triplicane Cooperative Credit The Income Tax Officer, Society Ltd., Vs. Ward-9(1), Old No.35, New No.73, Chennai. Bharathi Salai, Triplicane, Chennai – 600 005. PAN: AAABT 2681E (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� की ओर से/ Appellant by : Mr. B. Suresh, C.A ��थ� की ओर से /Respondent by : Ms. R. Anitha, Addl. CIT सुनवाई की तारीख/Date of Hearing : 12.02.2026 घोषणा की तारीख /Date of Pronouncement : 17.02.2026 आदेश / O R D E R PER PADMAVATHY.S, A.M: These appeals by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") both dated 13.08.2025 for Assessment Year (AY) 2020-21 and 2021-22. The common issue contended in both these appeals pertain to the denial of deduction u/s.80P(2)(d) for the interest received from Chennai Central Cooperative Bank Ltd. The Triplicane Coop Credit Society Ltd. :- 2 -:

80P(4) of the Act, held that the said provision operates as a proviso to section 80P(1) and (2) and excludes only such co-operative banks which, though co- operative societies, possess an RBI licence to carry on banking business. The Hon’ble Supreme Court further held that the limited object of section 80P(4) is to deny deduction only to those co-operative banks which function at par with commercial banks by lending money to the general public. In the light of the above decision, we are of the considered view that section 80P(4) becomes relevant only where the assessee itself is a co-operative bank claiming deduction under section 80P, which is admittedly not the case in the present appeal. Therefore, the embargo contained in section 80P(4) has no application to the assessee’s claim under section 80P(2)(d). In other words though, by virtue of insertion of sub-section (4) to section 80P, a co-operative bank is not eligible to claim deduction under section 80P of the Act, it nevertheless continues to be a co-operative society registered under the Co- operative Societies Act, 1912 or under the relevant State Co-operative Societies Act. What is relevant for claim of deduction under sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other cooperative society. Therefore in our considered view that as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. sec. 80P(2)(d) cannot be denied. Accordingly we hold that the interest income earned by the assessee being a co-operative society from investments or deposits made with a co-operative bank would qualify for deduction under section 80P(2)(d) of the Act. The coordinate bench in several judicial proceedings has been consistently holding a similar view. Now coming to the issued deduction u/s.80P(2)(d) being The Triplicane Coop Credit Society Ltd. :- 4 -: disallowed on the ground of return not being filed on time, the ld AR during the course of hearing submitted that the assessee had filed a petition u/s.119(2)(b) for condoning the delay and the delay is condoned by the CCIT- 1, Chennai vide order dated 04.09.2021. Accordingly it was prayed that the deduction cannot be denied on the said ground. Considering the judicial precedence with respect to the deduction u/s.80P(2)(d) towards interest received from cooperative banks and the fact that the delay in filing the return of income being condoned, we are of the view that there is no reason to deny the claim of deduction u/s.80P(2)(d) to the assessee. Accordingly we direct the AO to allow the claim of the assessee for both AY 2020-21 & 2021-22 since the facts are identical.