JAWAHARLAL NEHRU PORT TRUST EMPLOYEES COOP. CREDIT SOCIETY LIMITED,RAIGAD vs. ITO,WARD-3, PANVEL
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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI MANISH BORAD
आदेश / ORDER
PER MANISH BORAD, AM:
This appeal filed by the assessee pertaining to the Assessment
Year (in short "AY") 2014-15 is directed against the order passed
u/s.250 of the Income Tax Act, 1961 [in short “the Act"] by ld.
Commissioner of Income-tax (Appeals), NFAC, Delhi [in short
ld."CIT(A)"] dated 27.03.2023 arising out of the Assessment order
passed u/s.147 r.w.s.144B of the Act dated 03.03.2022.
ITA No.1869/PUN/2024
The Registry has informed that there is a delay of 450 days in
filing of the appeal before this Tribunal. Ld. Counsel for the
assessee has referred to the Affidavit given by Secretary of the
assessee Cooperative Society stating that there was a reasonable
cause which prevented the assessee to file the appeal in time.
I have perused the affidavit and observe that the assessee
society which runs through its office bearers, keeps on changing
from time to time. The consultant who was appointed to look after
the taxation work did not check and track the status of the appeal.
The concerned staff of the assessee also could not notice receipt of
any mail regarding such an order passed by ld. CIT(A). On the
other hand, ld. Departmental Representative opposed to
condonation of delay.
I, however, on considering the reasons mentioned in the
affidavit, find force in the contention of Ld. Counsel for the assessee
stating the reasons mentioned above which prevented the assessee
society to file the appeal within the due time. I, in the larger interest
of justice, and on considering that the assessee society would not
have gained anything from delaying in filing the appeal before this
ITA No.1869/PUN/2024
Tribunal, condone the delay and admit the appeal for adjudication
on merits.
Grounds of appeal raised by the assessee read as under :
“1. The Assessee Society requests to condone the delay in filing the appeal as per facts undertaken in the Affidavit enclosed.
The Learned CIT(A) NFAC erred in confirming the disallowance of deduction Rs.8,64,028/- u/s.80P of the Income Tax Act, 1961, made by the Learned AO.
The Learned CIT(A) NFAC erred in not allowing deduction of Rs.8,64,028/- u/s.80P(2)(a)(i) or 80P(2)(d), against the interest income earned from Cooperative Bank Limited, which are basically Cooperative societies as per various judicial pronouncements and binding nature of decisions rendered by the Jurisdiction Tribunal.
The Learned Assessing Officer erred in not allowing proportionate deduction u/s.57 against the Income assessed as Income from Other Sources u/s.56 of the Act.”
From perusal of the above grounds, I notice that the sole
grievance of the assessee is that the ld. CIT(A) erred in confirming
the disallowance of deduction at Rs.8,64,028/- claimed by the
assessee u/s.80P of the Act.
Facts in brief are that the assessee is a Cooperative Society and
declared Nil income in the return furnished on 26.09.2014. The total
claim of deduction u/s.80P at Rs.86,85,797/- included the deduction
towards Rs.8,64,028/- for the interest received from investments
made in Cooperative Banks. Ld. Assessing Officer after referring to
various decisions came to a conclusion that the interest earned from
ITA No.1869/PUN/2024
deposits with Cooperative Banks is not eligible for deduction
u/s.80P of the Act.
Aggrieved assessee preferred appeal before the ld. CIT(A) but
failed to succeed.
Now the assessee is in appeal before this Tribunal.
Ld. Counsel for the assessee submitted that this Tribunal has
consistently held that interest earned from deposits held with
Cooperative Banks are also eligible for deduction u/s.80P of the
Act.
On the other hand, ld. Departmental Representative
vehemently argued supporting the order of the lower authorities
but failed to controvert this contention that this issue raised in this
appeal has been decided by this Tribunal in other cases holding that
interest earned on deposits made with Cooperative Banks is eligible
for deduction u/s.80P of the Act.
I have heard the rival contentions, perused the record placed
before me and carefully gone through the decisions referred and
relied on by both sides. The assessee has earned interest of
Rs.8,64,028/- from Fixed deposits/Investments made with
Cooperative Banks. From the perusal of Audited Balance sheet, I
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notice that under the head “Investment”, deposits have been made
on account of Reserve Fund, RDCC RF Short Term FDR,
Development Fund, Dividend Equalisation Fund, Election Fund,
Loan Security Fund etc., and these funds have been deposited in the
form of FDR with Cooperative Banks. All these funds have been
created as per the guidelines of the Societies Act which governs the
assessee society. It is not in dispute that the alleged interest income
has been earned from the deposits made with a Cooperative Bank,
namely Abhyudaya Cooperative Bank Limited.
Section 80P(2)(d) of the Act provides that the sum received in
respect of any income by way of interest or dividend derived by
Cooperative Society from its investment with any other Cooperative
Society, the whole of such income is eligible for deduction u/s.80P
of the Act. I observe that section 80P(2)(d) of the Act refers to the
interest from Cooperative Society but it has been consistently held
by this Tribunal (Pune Benches) that Cooperative banks are
basically Cooperative Societies except that they get license for doing
the banking business. I find that this Tribunal in case of Kolhapur
District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha
Ltd., Vs. ITO in ITA No.1365/PUN/2023, dated 01.01.2024 dealing with
similar issue after placing reliance on another decision of this
ITA No.1869/PUN/2024
Tribunal in the case of The Ugar Sugar Works Kamgar & Dr.
Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in ITA
No.84/PAN/2018, dated 27.05.2022 has held that the interest earned
from deposits with Cooperative Banks are also eligible for
deduction u/s.80P(2)(d) of the Act. I therefore respectfully
following the above referred decisions and taking consistent view
along with considering the facts of the case, where the assessee
made investment with the Cooperative Banks in regard to the funds
which it was required to maintain as per the guidelines provided in
the Societies Act applicable to the assessee society and hold that the
assessee is eligible for deduction u/s.80P(2)(d) of the Act for the
interest income earned from Cooperative Bank at Rs.8,64,028/-.
Findings of the ld. CIT(A) is set-aside and the alleged disallowance
is deleted. Effective grounds of appeal raised by the assessee are
allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on this 24th day of October, 2024.
Sd/- (S. S. VISWANETHRA RAVI) (MANISH BORAD) JUDIC L MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 24th October, 2024. Satish
ITA No.1869/PUN/2024
आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब�च, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER,
// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.
