BANGALORE CREDIT CO-OPERATIVE SOCIETY LIMITED vs. INCOME TAX OFFICER

BANGALORE CREDIT CO-OPERATIVE SOCIETY LIMITED, (REP. BY S. SOMASHEKAR) No.723/1, NEW No.37/1, 10TH MAIN, 36TH CROSS, JAYANAGAR 4TH BLOCK, BENGALURU 560 011, PAN:AAAAB1598B. …APPELLANT (BY SRI S.V. RAVISHANKAR, ADVOCATE FOR SMT. LOCHANA S. BABU, ADVOCATE) AND:

INCOME TAX OFFICER, WARD 7(2)(1), ROOM No.319, 3RD FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. (AY-2018-2019) …RESPONDENT (BY SRI Y.V. RAVIRAJ, SENIOR STANDING COUNSEL)

These appeals arise out of a common order in ITA Nos.2347 & 2348/Bang/2024 dated 30.06.2025, relating to the Assessment Years 2018–19 and 2020–21, raising common substantial questions of law. Both the appeals are heard and disposed of together by this common judgment.

Both the appeals raise the following substantial questions of law: "(i) Whether the Tribunal was justified in holding that the interest income earned from investments is not attributable to the business

Insofar as the second question of law is concerned, Sri Y.V. Raviraj, learned Senior Standing Counsel for the Revenue, submits that the same is no longer res integra in view of the decision in ITA No.93/2024, decided on 16.09.2025 [M/s. Judicial Employees House Building Cooperative Society Limited vs. Income Tax Officer].

Learned counsel for the appellant-Assessee is not in a position to dispute the above submission.

In ITA No.93/2024, this Court has held as under: " 8. …, we note that the assessee has made investment and earned interest income from the Mysore and Chamarajanagar District Co-operative Central Bank Ltd. A Co-operative Bank is a Co-operative Society registered under the Co-operative Societies Act, whether the Co-operative Society assumes the character of the Co-operative Bank depends on the activities carried on by it.

It is undisputed that the Mysore and Chamarajanagar District Co-operative Central Bank Ltd., has banking license issued by the Reserve Bank of India under the Banking Regulation Act and engaged in banking activities. Merely the Co-operative Bank is also a Co-operative Society, the investment in Co-operative Bank cannot be considered for deduction under Section 80P(2)(d) of the Act. In the light of the judgment in second TOTAGARS CO-OPERATIVE SALE SOCIETY (supra), dated 16.06.2017 followed by the Tribunal, we are of the view that in view of the banking license of the Mysore and Chamarajanagar District Co-operative Central Bank Ltd., the same is a Co-operative Bank. Once the investment is made in a Co-operative Bank, Sub-Section (4) of Section 80P steps in and operates as a bar for deduction under Section 80P(2)(d) of the Act.

The Tribunal rightly following the judgment of this Court in the second TOTAGARS CO-OPERATIVE SALE SOCIETY (supra) has held that the assessee is not entitled to claim deduction under Section 80P(2)(d) of the Act. We agree with the finding recorded by the Tribunal based on the judgment of this Court. Further, there are no distinguishable facts or law placed to take a different view. Accordingly, no substantial questions of law would arise."

Insofar as question No.1 relating to deduction under Section 80P(2)(a)(i) of the Act is concerned, the Tribunal has remanded the matter to the file of the Assessing Officer for determining the head of income. In view of the order of remand, learned counsel for the appellant has not pointed out any fundamental error in the order of remand. An order of remand would not give rise to a substantial question of law unless perversity is demonstrated. Upon examination of the order of the Tribunal, we find that the remand is justified and no perversity is discernible so as to warrant consideration of this substantial question of law by this Court.

In light of the above, both the appeals fail and are accordingly dismissed.