SHRI BRIJKUTIR CO OPERATIVE HOUSING SOCIETY LIMITED,MUMBAI vs. ITO, WARD-19(3)(1), MUMBAI

Being aggrieved, the Appellant preferred appeal before the CIT(A) which was dismissed vide, order dated 12/02/2024. The CIT(A) confirmed the disallowance observing that interest received from a co-operative bank was not eligible for deduction under Section 80P(2)(d) of the Act.

The Appellant is now before the Tribunal in appeal against the order passed by the CIT(A) on the grounds reproduced in 2 Assessment Year: 2018-19 paragraph 3 above. All the grounds raised by the Assessee, being connected, are taken up together hereinafter.

We have given thoughtful consideration to the rival submission, perused the material on record and considered the position in law.

During the course of hearing reliance was placed on behalf of the Appellant on the decision of Tribunal in the case of Vishva Villa Co-op Housing Society Vs. ITO, Ward 12(3)(1): ITA No. 682 to 684/Mum/2024, dated 27/06/2024, wherein it was held by the Tribunal that prior to Assessment Year 2021-22 of the Act adjustment was permissible in terms of Section 143(1)(a)(v) of the Act only with respect to deduction claimed under Section 10AA, 80IA, 80IAB, 80IB, 80IC, 80ID and 80IE of the Act in case return of income was filed after the due date prescribed under Section 139(1) of the Act. Thus, no adjustment could have been made for the deduction claimed under Section 80P(2)(d) of the Act in cases where return was filed after the expiry of due date specified under Section 139(1) of the Act by invoking provisions of Section 143(1)(a)(v) of the Act for the assessment years prior to Assessment Year 2021-22. 7.1. We note that by way of Finance Act, 2021 and with effect from 01/04/2021 (relevant for the Assessment Year 2021-22 and onwards) the provisions Section 143(1)(a)(v) of the Act were amended to provide as under:

We note that as per Section 80P(2)(d) of the Act, for the purpose of claiming deduction under the aforesaid provision interest must be received from a ‘co-operative society’. A co-operative society is defined in Section 2(19) of the Act as being a co-operative society registered either under the Co-operative Societies Act, 1912 or under any other law for the time being in force in any State for the registration of co-operative societies. In the case of Kaliandas Udyog Bhavan Premises Co-operative Society Ltd. vs. ITO: ITA No. 6547/Mum/2017, dated 24.04.2018, after examining the judgment of the Hon’ble Supreme Court in the case of Totgars Cooperative Sale Society Ltd. vs. ITO (2010) 322 ITR 283 (SC), which was followed by the Hon’ble Karnataka High Court in the case of Pr.CIT vs. Totgars Co-operative Sale Society Ltd.: 2017 395 ITR 611 (Kar), and after taking into account the insertion of Section 80P(4) of the Act vide the Finance Act, 2006, the Mumbai Bench of the Tribunal had held that co-operative bank continues to be a co-operative society and therefore, assessee receiving interest from a co-operative bank would be eligible to claim deduction under Section 80P(2)(d) of the Act in respect of interest so received. To the same effect are the decisions of the Tribunal in the 4 Assessment Year: 2018-19 case of Kinjal Heaven Co-operative Society [ITA No. 2955 to 2958/Mum/2023, dated 06/11/2023] cited on behalf of the Appellant during the course of hearing as well as other decision of the Tribunal in the case of Lands End Co-operative Housing Society Ltd. Vs. ITO [ITA No.3566/Mum/2014, dated 15/01/2016], M/s Sea Green Cooperative Housing and Society Ltd. Vs. ITO-21(3)(2), Mumbai [ITA No. 1343/Mum/2017, dated 31/03/2017], and Mystique Rose Cooperative Housing Society Ltd.: vs. ITO 22(2)(3) [ITA No. 1290/Mum/2021, dated 30/03/2022].

We also find merit in the contention of the Appellant that return was, in fact, filed within time specified under Section 139(1) of the Act. We observe that for the Assessment Year 2018-19, in case of person (other than a company) whose accounts were required to the audited under this Act or under any other law for the time being in force, as per Explanation 2(a)(ii) of Section 139(1) of the Act, the due date for filling of income tax return was 30th September of the relevant assessment year [subsequently substituted with 31st October vide finance Act 2020 with effect from 01/04/2020]. The Appellant being a Co-Operative Society governed by Maharashtra Co-Operative Society Act 1960 was required to be audited under Maharashtra State Co-Operative Act and therefore, was required to file its return of income upto 30/09/2018. As per Revenue the Appellant had filed return on 26/09/2018. Thus, the return was filed before the due date as prescribed under Section 139 of the Act, and therefore, the Appellant is entitled for deduction under Section 80P(2)(d) of the Act as claimed.

In view of the above, order passed by the CIT(A) cannot be sustained. The Assessing Officer is directed to allow deduction of INR 29,46,452/- under Section 80P(2)(d) of the Act. Ground No. 1, 2, and 3 raised by the Appellant are allowed. Ground No. 4 raised

In result, the appeal preferred by the Assessee is partly allowed.