THE SESA GOA EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LIMITED,SANQUELIM vs. ACIT, CIRCLE - 2(1), PANAJI

The Sesa Goa Employees Coop. Credit Society Ltd., AO, in para No.5.5 of his order, noticed that the assessee earned interest from the deposits kept with Goa State Co-operative Bank and Mapusa Urban Co-operative bank, both of which were scheduled banks. He disallowed the deduction on such interest income claimed u/s.80P(2)(d). The ld. first Appellate Authority affirmed the view point of the AO on this score. Aggrieved thereby, the assessee has approached the Tribunal.

After considering the rival submissions and perusing the relevant material on record, it is seen that the assessee is a co- operative society engaged in the business of accepting money and lending money to its members. During the year under consideration, the assessee earned interest from the deposits kept with Cooperative Banks amounting to Rs.8,01,674/-, which has been deprived of the benefit of section 80P. The issue of granting deduction u/s 80P on such an income is no more res integra in view of the catena of decisions delivered by the Pune Benches. The Pune Bench in Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT (ITA No.1249/PUN/2018) has, vide its order dated 07-01-2022, held that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for The Sesa Goa Employees Coop. Credit Society Ltd., deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessee is also a Co- operative society registered. Ergo, respectfully following the decision of the Division Bench, I overturn the impugned order and direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest earned from Co-operative Banks.

In the result, the appeal is allowed.