KUNDALIKA NAGARI SAHAKARI PATSANSTHA MARYADIT ,ROHA vs. ITO, WARD 1, PANVEL, PANVEL
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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI INTURI RAMA RAO
आदेश / ORDER
PER INTURI RAMA RAO, AM:
This is an appeal filed by the assessee directed against the
order of the National Faceless Appeal Centre, Delhi [‘NFAC’] dated
22.02.2024 for the assessment year 2018-19.
Briefly, the facts of the case are that the appellant is a Souhard
Cooperative registered under the Maharashtra Cooperative Society
Act, 1960, engaged in providing credit facilities to its members.
The Return of Income for the assessment year 2018-19 was filed on
2 ITA No.576/PUN/2024
22.09.2018 declaring total income of Rs.80,840/- after claiming
exemption u/s 80P(d)(a)(i)/80P(2)(d) of the Income Tax Act, 1961
(‘the Act’) of Rs.70,50,594/-. The case was selected for scrutiny
under CASS. Against the said return of income, the assessment was
completed by the Assessing Officer vide order dated 02.03.2021
passed u/s 143(3) r.w.s.143(3A) & 143 (3B) of the Act determining
total income at Rs.11,66,355/-. While doing so, the Assessing
Officer had brought to tax the interest income of Rs.26,57,669/-
earned on FDs with other co-operative banks holding that the said
interest does not qualify for deduction u/s 80P(2)(a)(i) of the Act.
Being aggrieved, an appeal was filed before the NFAC, who
vide impugned order confirmed the action of the Assessing Officer.
Being aggrieved, the appellant is in appeal before this
Tribunal in the present appeal.
It is submitted before me that the issue is decided in favour of
the assessee by placing reliance on the several decisions of the
Tribunal as well as the decision of the Co-ordinate Bench of this
Tribunal in the case of Sai Prerana Gramin Bigarsheti Sahakari Pat
Sanstha Maryadit Vs. ITO and others in ITA No.1431/PUN/2018
3 ITA No.576/PUN/2024
and others dt. 03.07.2019, copy placed at page 7 to 14 of the paper
book.
On the other hand, ld. Sr. DR placing reliance on the orders of
the lower authorities submits that no interference is called for.
I heard the rival submissions and perused the material on
record. The issue in the present appeal relates to the eligibility of
the assessee for exemption u/s 80P(2)(a)(i) or u/s 80P(2)(d) of the
Act in respect of interest income earned from cooperative banks.
As regards, the issue as to the allowability of exemption under
the provisions of section 80P(2)(a)(i) in respect of interest income
earned by a cooperative society from the cooperative banks, there is
a cleavage of judicial opinion among several High Courts on the
issue of eligibility of this kind of income for exemption u/s.
80P(2)(a)(i) of the Act. The Hon’ble Punjab & Haryana High Court
in the case of CIT vs. Punjab State Cooperative Federation of
Housing Building Societies Ltd. 11 taxmann.com 448, the Hon’ble
Gujarat High Court in the case of State Bank of India Vs. CIT 389
ITR 578 (Guj.), the Hon’ble Delhi High Court in the case of
Mantola Co-operative Thrift & Credit Society Ltd. Vs. CIT 50
taxmann.com 278, the Hon’ble Punjab & Haryana High Court in the
4 ITA No.576/PUN/2024
case of CIT Vs. Punjab State Cooperative Agricultural
Development Bank Ltd. 389 ITR 68 and the Hon’ble Kolkata High
Court in the case of CIT Vs. Southern Eastern Employees
Cooperative Credit Society Ltd. 390 ITR 524 took a view that the
income arising on the surplus invested in short term deposits and
securities cannot be attributed to the activities of the society and,
therefore, not eligible for exemption u/s.80P(2)(a)(i) of the Act.
However, the Hon’ble Karnataka High Court in the case of Tumkur
Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230
taxmann.com 309 (Kar.) and the Hon’ble Telangana and Hon’ble
Andhra Pradesh High Court in the case of Vaveru Co-operative
Rural Bank Ltd. v CIT [(2017) 396 ITR 371 took a view that such
interest income is attributable to the activities of the society and,
therefore, eligible for exemption u/s 80P(2)(a)(i) of the Act. Similar
view has been taken by the Hon’ble Calcutta High Court in the case
of PCIT vs. Gunja Samabay Krishi Unnayan Samity Ltd., 147
taxmann.com 518 (Calcutta) and the Hon’ble Madras High Court in
the case of Chennai Central Co-operative Bank Ltd. vs. ITO, 148
taxmann.com 17 (Madras). The Coordinate Bench of Pune Benches
in the case of M/s. Ratnatray Gramin Bigar Sheti Sah. Pat Sanstha
5 ITA No.576/PUN/2024
Maryadit Vs. ITO (ITA Nos.559/560/PUN/2018, dated 11-12-2018)
taken view in favour of the assessee following the judgment of
Hon’ble Karnataka High Court in the case of Tumkur Merchants
Souharda Credit Cooperative Ltd. (supra). Following the decision
of the Coordinate Bench of the Tribunal, I am of the considered
opinion that the interest income earned on fixed deposits with
cooperative bank/scheduled bank partakes character of the business
income, which is eligible for deduction u/s 80P(2)(a)(i) of the Act.
Therefore, I direct the Assessing Officer to allow the exemption
u/s.80P(2)(a)(i) and section 80P(2)(d) of the Act. Thus, the grounds
of appeal filed by the assessee stand allowed.
In the result, the appeal filed by the assessee stands allowed. Order pronounced on this 25th day of April, 2024.
/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER
पुणे / Pune; �दनांक / Dated : 25th April, 2024. Satish
ITA No.576/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.
