S T CO-OPERATIVE CREDIT SOCIETY,PUNE vs. ITO, WARD 5(1), PUNE

।आयकर अपीलीय अिधकरण ”एस एम सी” "ायपीठ पुणेम"। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2136/PUN/2024 िनधा"रण वष" / Assessment Year: 2020-21 S T Co-operative Credit V The Income Tax Officer, Society, s Ward-5(1), Pune. Swargate S T Depo, Veer Savarkar Nagar, Swargate Bus Stand, Pune – 411037. PAN: AABAS6856L Appellant/ Assessee Respondent / Revenue Assessee by Shri Kishor B Phadke – AR Revenue by Shri Prakash L Pathade – DR Date of hearing 13/11/2024 Date of pronouncement 18/11/2024 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the Assessee directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], under section 250 of the Income tax Act, 1961 dated 09.08.2024 for A.Y.2020-21. The assessee has raised the following grounds of appeal : “1. The learned CIT(A) erred in dismissing the appeal of the appellant by refusing to condone the delay of 108 days in filing the appeal without appreciating that the said delay was due to reasonable cause as explained in the application for condonation of delay filed before CIT(A) and therefore, the said delay ought to have been condoned in the interest of justice and the appeal should have been adjudicated on merits. 2. The learned CIT(A) ought to have appreciated that the deduction u/s 80P was allowable in respect of interest earned from deposits made by cooperative banks as consistently held by Honorable ITAT, Pune and the considerations of merits, should not have been altogether ignored, while adjudicating the aspect of condonation of delay in filing appeal and hence, the appeal ought to have been allowed after condoning the delay 3. The appellant craves, leave to add, alter, amend and delete any of the above grounds of appeal.” Submission of ld.Authorised Representative(ld.AR) : 2. The ld.Authorised Representative(ld.AR) for the Assessee submitted that assessee’s appeal was dismissed by the ld.CIT(A) without discussing each and every ground and merits of the case and merely dismissed for Delay. Ld.AR submitted that there was valid and sufficient reason for delay, hence, submitted that Delay may kindly be condoned. Ld.AR submitted that this is a Co- operative Credit Society of State Transport Employees, most of them are not well educated. Ld.AR submitted that the office bearers were not aware about the e-proceedings and e-working of the Income tax Department. Therefore, there has been delay of 180 days in filing appeal before the ld.CIT(A). Ld.CIT(A) has not condoned the delay. Ld.AR submitted that in the interest of 2 justice, delay may kindly be condoned and the case may be decided on merits.

2.1 Ld.AR further submitted on merits Assessing Officer has held that interest of Rs.40,68,448/- earned by assessee is not eligible for deduction u/sec.80P of the Act. However, ld.AR invited our attention to various decision of ITAT Pune, wherein ITAT Pune has held that interest earned from Co-operative Banks is eligible for deduction u/sec.80P of the Act. In this case, assessee has earned interest from PDCC Bank Ltd., and S.T.Co-operative Bank Limited. Ld.AR submitted that assessee is eligible for deduction u/sec.80P on the interest earned.

Submission of ld.Departmental Representative(ld.DR) : 3. The ld.DR for the Revenue relied on the order of Assessing Officer(AO) and ld.CIT(A)[NFAC].

Findings & Analysis : 4. We have heard both the parties and perused the records. As per the assessment order, Assessee is a Co-operative Credit Society engaged in the business of accepting deposits from members and lending loans to its members. Assessee had filed Return of Income

3 showing Gross Total Income of Rs.80,17,177/- and total income at Rs.Nil; claiming deduction u/sec.80P(2)(a) of the Act. The Assessing Officer has observed that assessee has earned interest income of Rs.40,68,448/- from PDCC Bank and S.T.Co-operative Bank Limited. The Assessing Officer has held that after insertion of section 80P(4) of the Act, assessee will not be eligible for deduction on the interest. Therefore, the question before us is whether the interest of Rs.40,68,448/- earned by assessee from PDCC Bank and S.T.Co-operative Bank Limited is eligible for deduction u/sec.80P or not!

(d) or (e), as the case may be. 36. The original source of the investments made by the petitioners in nationalised banks is admittedly the income that the petitioners derived from the activities listed in sub-clauses (i) to (vii) of clause (a). The character of such income may not be lost, especially when the statute uses the expression "attributable to" and not any one of the two expressions, namely, "derived from" or "directly attributable to". 37. Therefore, we are of the considered view that the petitioners are entitled to succeed. Hence, the writ petitions are allowed, and the order of the Assessing Officer, in so far as it relates to treating the interest income as something not allowable as a deduction under section 80P(2)(a), is set aside.”Unquote.

5 5.1 Thus, the Hon’ble High Court of AP &TS held that Interest Income earned by investing Income derived from Business and Profession by a Co-Operative Society was eligible for deduction u/s.80P(2)(a) of the Act.

5.2 No contrary decision of the Hon’ble jurisdictional High Court has been brought to our notice. Therefore, as per rule of precedence, the proposition of law laid down by the Hon’ble High Court of AP & TS (supra) are binding precedents for us.

6 7. The Hon’ble ITAT Pune Bench in the case of Yashwant Nagari SahakariPatsansthaMaryadit Vs. ITO in ITA No.644/PUN/2024 dated 04.06.2024 held that the assessee was eligible for deduction u/sec.80P(2)(a) of the Act on the Interest earned by assessee.