THE KARAD URBAN SEVAK SAHAKARI PATSANSTHA MARYADIT KARAD ,SATARA vs. ITO WARD-1, SATARA

Assessee by : Shri Deepak Chintaman Gadgil Shri Shashank Ojha (virtual) Revenue by : Date of hearing : 14.01.2026 Date of pronouncement : 03.02.2026 आदेश / ORDER The captioned appeal at the instance of assessee pertaining to the Assessment Year 2020-21 is directed against the order dated 24.10.2025 of National Faceless Appeal Centre, Delhi (NFAC) passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 09.09.2022 passed u/s.143(3) r.w.s.144B of the Act.

3. At the outset, ld. Counsel for the assessee submitted that the net income of the assessee society during the year is ₹38,25,516.14 and the same has been arrived after excluding the interest income at ₹39,69,439 earned on the investments held with Cooperative Banks. He submitted that the assessee is eligible for deduction u/s.80P(2)(a)(i) of the Act and even otherwise the assessee is also eligible for deduction u/s.80P(2)(d) of the Act for the interest earned from Cooperative Banks and that the issue stands decided by this Tribunal in plethora of decisions referred in the paper book. On the other hand, ld. Departmental Representative supported the order of ld.CIT(A).

4. I have heard the rival contentions and perused the records placed before me. I observe that the assessee is a Cooperative society and Nil income declared in the return of income for A.Y. 2020-21 furnished on 23.12.2020. After the case being selected for Complete Scrutiny valid statutory notices were served upon the assessee. During the source of assessment proceedings, ld. Assessing Officer has observed that assessee has earned interest income of ₹39,69,439 from the investments held with Cooperative Banks namely The Satara District Central Cooperative Bank Ltd. And The Karad Urban Cooperative Bank Ltd. Ld. Assessing Officer concluded the proceedings making addition of ₹39,69,439 and assessed the income at ₹39,69,439. Thereafter, assessee preferred appeal before ld.CIT(A) but failed to succeed.

“5. We have heard the rival submissions and perused the record placed before us. There is no dispute to the fact that appellant has earned interest income of Rs.1,02,95,103/- from deposits/investments with Cooperative Banks. This fact has been accepted by the Assessing Officer in the assessment order also. Admittedly, appellant has not filed the requisite details before ld.CIT(A). We however considering the fact that the issue regarding allowability of deduction u/s.80P(2)(d) of the Act for the interest earned from Cooperative Banks is no longer res integra as the very same issue has been decided by this Tribunal in catena of decisions and in assesse’s own case for A.Y. 2020-21 holding that the appellant is eligible for deduction u/s.80P(2)(d) of the Act as the Cooperative Banks are basically Cooperative Societies. For the sake of brevity, the finding given in is reproduced below:

“7. We have heard both the sides and perused the record placed before us. In the instant case, the Assessing Officer disallowed the interest income of Rs.1,63,98,998/- earned out of the Fixed deposits/Investments made with Cooperative Banks treating the same as Income from Other Source. Ld.CIT(A) dismissed the appeal in limine without discussing anything on merits of the issues and on the ground that the appellant has not provided plausible explanation for admission of additional evidences.

9. Respectfully following the above referred decisions taking consistent view along with considering the facts of the case, where the appellant made investment with the Cooperative Banks we hold that the appellant is eligible for deduction u/s.80P(2)(d) of the Act for the interest income earned from Cooperative Banks at Rs.1,63,98,998/-. Findings of the ld. CIT(A) is set-aside and the Assessing Officer is directed to allow the claim made by the appellant. Effective grounds of appeal raised by the appellant are allowed.”

6. Respectfully following the same, we hold that deduction of Rs.1,02,95,103/- u/s.80P(2)(d) of the Act claimed by the appellant on the interest earned from deposits/Investments with Cooperative Banks deserves to be allowed. Relevant finding of ld.CIT(A) on merits is set aside and grounds of appeal No.5 to 8 raised by the appellant are allowed.”

7. In light of the above decision and other judicial precedents consistently followed by this Tribunal, I hold that the assessee is eligible for deduction u/s.80P(2)(d) of the Act for the interest income of ₹39,69,439 earned from the investments held with Cooperative Banks. Ground No.2 raised by the assessee s allowed.

8. Since I have allowed Ground No.2 raised by the assessee, dealing with other grounds would be merely academic in nature.

Order pronounced on this 03rd day of February, 2026.