KERALA GAZETTED OFFICERS CO-OPERATIVE SOCIETY LIMITED NO. T-424,TRIVANDRUM vs. THE INCOME TAX OFFICER, TRIVANDRUM

Appellant by: Shri R. Krishnan Respondent by: Shri Sanjit Kumar Das, CIT-DR Date of Hearing: 14.08.2024 Date of Pronouncement: 25.09.2024 O R D E R Per Bench This assessee’s appeal for A.Y. 2016-17 arises against the National Faceless Appeal Centre, Delhi [CIT(A)]’s DIN & Order No. ITBA/ NFAC/S/250/2023- 24/1059634857(1) dated 11.01.2024 in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act).

Heard both parties. Case file perused.

. 6) Without prejudice to the appellant ought claim that it is not additional evidence, the Commissioner of Income Tax (Appeals) to have appreciated that submissions were in the nature of application for admissions of details and identity of persons, with explanation as to what prevented the appellant from filing before the Assessing Officer. 7) The learned Commissioner of Income Tax (Appeals) ought not have rejected the explanation of the appellant summarily. Assuming, but not admitting that these were additional evidences, he ought to have called for remand report from the Assessing Officer, in the interest of justice. 8) The learned Commissioner of Income Tax (Appeals) went wrong in his remark that the so-called additional evidence is incomplete and does not in any way buttress the grounds of appeal filed by the appellant. Appellant prays that the order of the Commissioner of Income Tax (Appeals) may be modified to the extent prayed for. “

3. We now advert to the first and foremost issue herein of section 80P deduction/ disallowance amounting to Rs.3,50,58,113/- representing assessee’s interest income received from Kerala State Co-operative Bank and Trivandrum District Co-operative Bank; involving varying sums.

Kerala Gazetted Officers Co-op. Society Ltd. 5. We notice in this background that the very issue stands adjudicated in Hon'ble Jurisdictional High Court’s recent decision in of 2019 in the case of PCIT v. Peroorkada Service Co-op. Bank Ltd. [2022] 442 ITR 141 (Ker) wherein their Lordships have rejected the Revenue’s identical stand as under: - “12.2 Section 80P deals with Co-operative Societies' computation of income. As already noted, it has four sections and several sub-sections and clauses. The Parliament has considered the various situations in which the exigible income and the deductable income of the assessee is considered while computing the income of the assessee. For getting deduction, in our considered view, the assessee must also establish that the interest income earned by the assessee is from a Co-operative Society. As a matter of fact, in the case on hand, there is no dispute that it is not from a Co-operative Society registered under Kerala Co-operative Societies Act. The interest income earned from District Co-operative Bank/State Co-operative Bank, in the facts and circumstances of the case, do come within Section 80P(2)(d). Therefore, the income constitutes income from other sources and the only eligible deduction is covered by Section 80P(2)(d) viz. Interest or dividend derived by the assessee from its investments with any other Co-operative Society. The source of interest income is from Bank and Treasury, interest income received from Treasury be included in the computation of total income of the assessee. In other words, interest earned from Treasury is inadmissible for deduction and interest income from Co-operative Societies registered under the Kerala Co-operative Societies Act are eligible for deduction. The contra consideration of Commissioner of Income Tax (Appeals) and the Tribunal is incorrect and liable to be modified as stated above. Hence, it is held that the interest income earned by the assessee does not come within the ambit of Section 80P(2)(a)(i) and permissible deduction of interest income is limited to Co-operative Societies/Banks registered under Kerala Co-operative Societies Act under clause (d) of the Act and effect order on the above lines is made by the Assessing Officer. The questions are accordingly answered.”