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Facts
The Revenue appealed against the order of CIT(A) allowing deduction u/s 80P(2)(d) for interest income earned by the assessee, a cooperative credit society, from deposits. The Revenue argued that the assessee was not a cooperative bank and therefore not eligible for the deduction.
Held
The Tribunal, referring to Supreme Court judgments in Citizen Cooperative Society Ltd. and The Mavilayi Service Cooperative Bank Ltd., held that a license from RBI is a prerequisite to be considered a cooperative bank. Since the assessee did not have such a license, Section 80P(4) was not applicable, and the deduction under Section 80P(2)(d) for interest earned was allowable.
Key Issues
Whether the assessee, a cooperative credit society, is eligible for deduction under Section 80P(2)(d) on interest income from deposits, considering Section 80P(4) which excludes cooperative banks.
Sections Cited
80P(2)(d), 80P(4)
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Income Tax Appellate Tribunal, MUMBAI “D” BENCH : MUMBAI
Before: SHRI SATBEER SINGH GODARA & SHRI GIRISH AGRAWAL
ORDER PER SATBEER SINGH GODARA, J.M. This Revenue’s appeal, for assessment year 2018-2019, arises against National Faceless Appeal Centre [in short the “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2023-24/ 1061337575(1), dated 22.02.2024, in proceedings u/s.143(3) of the Income Tax Act, 1961 (in short “the Act”).
2 ITA.No.2024/MUM./2024 Heard both the parties. Case file perused.
The Revenue pleads the following substantive grounds in the instant appeal :
1) "Whether, on the facts and in the circumstances of the case and in law the learned CIT (A) erred in allowing deduction u/s 80P of the Act despite the fact that Hon'ble Supreme Court has held that the interest on deposits were not business income but the income from other sources and, therefore, the deduction u/s.80P(2)(d) is also not allowed in respect of interest earned from deposits in co operative banks." 2) “Whether on facts and in the circumstances of the case and in law, the learned CIT (A) was justified in allowing deduction u/s 80P of the Act despite the fact that Hon'ble Karnataka High Court in a detailed judgment discussing the law and various related issues in the case of PCIT v/s Totagars Cooperative Sales Society (392 ITR 74) has specifically decided the question of law about the allowability of interest earned from deposits with Cooperative Bank u/s 80P(2)(d) of the IT Act also in favour of Revenue."
3 ITA.No.2024/MUM./2024 3. It emerges in this factual backdrop that the Revenue’s sole substantive grievance raised in the instant appeal seeks to reverse CIT(A)-NFAC action reversing assessment findings disallowing the assessee’s sec.80P(2)(d) deduction claim of Rs.2,55,37,783/- representing interest income from deposits made in cooperative societies/cooperative institutions as well as holding it as a cooperative bank; as the case may be.
Learned counsel representing the assessee has filed copy of this tribunal’s order in assessee’s case itself ITO vs. M/s. Ramaraja Kshatriya Cooperative Credit Society Ltd., Mumbai ITA.Nos.4896 & 4897/MUM./2019dated 11.03.2021 deciding the very issue against the department as follows :
4 ITA.No.2024/MUM./2024 5 ITA.No.2024/MUM./2024 6 ITA.No.2024/MUM./2024 7 ITA.No.2024/MUM./2024
The Revenue is fair enough in not pinpointing any specific distinction either on facts or on law in all these assessment years. Faced with this situation, we adopt judicial consistency to reject the instant sole substantive ground of the Revneue in very terms. Ordered accordingly.
This Revenue’s appeal is dismissed in above terms.