Section 80P(2)(d) of the Income Tax Act

Income-tax Act, 2025: s.149

Section 80P(2)(d) falls under section 80P of the Income-tax Act, 1961, which corresponds to section 149 (Deduction in respect of income of co-operative societies) of the Income-tax Act, 2025.

Read section 149 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 80P(2)(d) is CIT v. Vegetable Products Ltd. (88 ITR 192), cited in 2,664 of the 2,440 judgments on BharatTax that turn on this section.

Leading authorities on Section 80P(2)(d)

CIT v. Vegetable Products Ltd.
88 ITR 192 · 1973 · Supreme Court
2,664
citing judgments

When two equally plausible interpretations of a taxing provision are possible, or when conflicting views exist from non-jurisdictional High Courts, the interpretation that favors the assessee must be adopted.

Totgars Co-operative Sale Society Ltd. v. ITO
322 ITR 283 · 2010 · Supreme Court
1,283
citing judgments

The interest income earned by a cooperative society from investing its surplus funds in fixed deposits with banks is not "derived from" its eligible business activities and is taxable as "income from other sources" under Section 56, thus not qualifying for deduction under Section 80P.

Pr. CIT v. Totagars
395 ITR 611 · 2017 · High Court
1,074
citing judgments

Interest income earned by a cooperative society from surplus deposits or investments held with a cooperative bank is not eligible for deduction under Section 80P(2)(d) of the Act.

Mavilayi Service Co-operative Bank Ltd. v. CIT
431 ITR 1 · 2021 · Supreme Court
999
citing judgments

Section 80P(4) serves as a proviso to Section 80P(1) and (2), excluding only cooperative banks that are cooperative societies and possess an RBI license for banking business. Its purpose is to exclude cooperative banks operating like commercial banks that lend money to the public.

State Bank Of India v. CIT
389 ITR 578 · 2016 · High Court
817
citing judgments

Income arising from a cooperative society's surplus funds invested in short-term deposits and securities is not attributable to the society's core activities and, therefore, is not eligible for exemption under Section 80P(2)(a)(i) of the Income-tax Act.

Pr. Commissioner of Income Tax and Anr. v. Totagars Cooperative Sale Society
392 ITR 74 · 2017 · High Court
762
citing judgments

Interest income earned by a cooperative society from its investments or surplus deposits with a cooperative bank is eligible for deduction under Section 80P(2)(d) of the Income-tax Act, 1961.

CIT v. Ponni Sugars & Chemicals Ltd.
306 ITR 392 · 2008 · Supreme Court
577
citing judgments

The "Purpose Test" determines whether an incentive or subsidy is a capital or revenue receipt for income tax purposes. If the incentive's purpose is to enable an assessee to set up a new industry or make investments in capital assets, it is a capital receipt and not taxable.

Subramanian and Anr. v. Siemens India Ltd. and Anr.
156 ITR 11 · 1985 · High Court
541
citing judgments

When there is a conflict between the decisions of non-jurisdictional High Courts, the view that favors the assessee should be preferred.

Tumkur Merchants Souharda Credit Cooperative Ltd. v. ITO
230 Taxmann 309 · 2015 · High Court
527
citing judgments

A cooperative society is eligible for deduction under Section 80P(2)(a)(i) if it is engaged in cooperative activities. It also clarifies the allowability of deduction under Section 80P(2)(d) for interest income received from investments made in cooperative banks, after duly considering the Supreme Court's decision in Totgars Co-operative Sale Society Ltd.

Citizen Co-operative Society Ltd. v. ACIT
397 ITR 1 · 2017 · Supreme Court
499
citing judgments

A co-operative credit society engaged in banking business with the general public, accepting deposits from non-members and advancing loans to non-members, is treated as a co-operative bank. Such a society falls under the exclusionary clause of Section 80P(4) and is not eligible for deduction under Section 80P(2)(a)(i).

Judgments on Section 80P(2)(d)

The Enterprises Co-Op Premises Socitey Ltd, Mumbai vs. Ward 22(3)(6), Mumbai, Piramal Chamber

In the result,appeal filed by assessee is allowed

ITA 6059/MUM/2026[2017-18]Status: DisposedITAT Mumbai13 Aug 2026AY 2017-18

Bench: Shri Pawan Singh & Shri Jagadish(Physical Hearing) The Enterprises Co-Op Premises Ito, Ward – 22(3)(6), Mumbai Society Ltd. Vs Dr. S.S. Rao Marg, Parel, Terrace, Prabhadevi Industrial Mumbai – 400012. Estate, 408, V.S. Marg, Prabhadevi, Mumbai– 400025. [Pan: Aaaat9310R] Appellant / Assessee Respondent / Revenue Assessee By Shri Srinivas Kota, Ca Revenue By Ms. Jayshree Thakur, Sr. Dr Dale Of Institution Of Appeal 20.05.2026 Date Of Hearing 13.08.2026 Date Of Pronouncement 13.08.2026 Order Under Section 254(1) Of Income Tax Act Per Pawan Singh; 1. This Appeal By Assessee Is Directed Against The Order Of Ld. Cit(A) Dated 17.03.2026 For Assessment Year (Ay) 2017-18. Though, The Assessee Has Raised Multiple Grounds Of Appeal, However As Per Our Considered View The Substantial Ground Of Appeal Relates To Disallowance Under Section 80P(2)(D) On Account Of Interest Received By Assessee Society From Co- Operative Bank. 2. Rival Submissions Of Both The Parties Have Been Heard & Record Perused. The Learned Authorised Representative (Ld. Ar) Of The Assessee Submits That Grounds Of Appeal Raised In The Present Appeal Relates To Deduction Under Section 80P(2)(D). The Assessee Earned Interest Of Rs. 22,26,948/- Or Fixed Deposits As Well As Savings Bank Account In Sarswat The Enterprises Co-Op Premises Society Ltd.

Section 254(1)Section 80P(2)(d)

The Adajan Vibhag Vividh Karyakari Sahakari Mandli Limited, Surat vs. Income Tax Officer, Ward-1(3)(1), Surat

In the result, appeal of the assessee is allowed

ITA 142/SRT/2026[2021-22]Status: DisposedITAT Surat10 Aug 2026AY 2021-22

Bench: Dr. Arjun Lal Sainiआयकरअपीलसं./Ita No.142/Srt/2026 [ "नधा"रण वष"/Assessment Year: 2021-22 ] The Adajan Vibhag Vividh Assistant Director Of Income Tax, Karyakari Sahakari Mandli Limited, Cpc, Bangaluru Vs. At Adajan Gam, Nr Lnb Daliya Jurisdictional Ao School, Tal-Choryasi, Income Tax Office,Ward-1(3)(1), Surat, Gujarat-395009 Anavil Business Centre Building, Adajan, Surat, Gujarat-395009 "ायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaeat4013B (अपीलाथ"/Assessee) (""यथ"/Respondent) Assessee By : Shri P M Jagasheth, Ca Respondent By : Shri Ajay Uke, Ld. Sr. Dr Date Of Hearing : 19/05/2026 10/08/2026 Date Of Pronouncement : :: Order :: Per, Dr. Arjun Lal Saini, Am: Captioned Appeal Filed By The Assessee, Pertaining To Assessment Year (Ay) 2021-22, Is Directed Against The Order Passed Under Section 250 Of The Income-Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) Dated 31.10.2025 By The National Faceless Appeal Centre (Nfac), Delhi/Commissioner Of Income Tax (Appeals) [In Short ‘Ld. Cit(A)’] Which In Turn Arises Out Of An Assessment Order Passed By The Assessing Officer (In Short ‘Ao’) U/S. 154 Of The Act. 2. The Appeal Filed By The Assessee Is Barred By Limitation By 37 Days. The Assessee Moved A Petition Requesting The Bench To Condone The Delay. I Note That The Reasons Given In The Affidavit For Condonation Of Delay Were Convincing & These Reasons Would Constitute Reasonable & Sufficient Cause For The Delay In

For Appellant: Shri P M Jagasheth, CAFor Respondent: Shri Ajay Uke, Ld. Sr. DR
Section 143(1)Section 154Section 250Section 80P(2)Section 80P(2)(c)Section 80P(2)(d)

Siddhi Infinity Co Operative Housing Society Limited, Mumbai vs. ITO - Ward 41(4)(4), Mumbai

In the result, appeal filed by assessee is allowed

ITA 5470/MUM/2026[2020-21]Status: DisposedITAT Mumbai04 Aug 2026AY 2020-21

Bench: Shri Pawan Singh & Shri Jagadish(Physical Hearing) Siddhi Infinity Co Operative Housing Ito, Ward – 41(4(4), Mumbai Society Limited Vs Room No. 854D, Kautilya Bhawan, Plot No. 13, Cts No. 69, Ismaliya C-41 To C-43, G Block, Bandra Village, Natwar Nagar Road No. 1, Kurla Complex, Bandra (East), Jogeshwari (East), Mumbai - 400060 Mumbai – 400051. [Pan: Aagpn4363H] Appellant / Assessee Respondent / Revenue Assessee By Shri Ajay Singh, Advocate & Shri Akshay Pawar, Advocate Revenue By Ms. Jayshree Thakur, Sr. Dr Date Of Hearing 04.08.2026 Date Of Pronouncement 04.08.2026 Order Under Section 254(1) Of Income Tax Act Per Pawan Singh; 1. This Appeal By Assessee Is Directed Against The Order Of Ld. Cit(A)/Addl/Jcit(A)-3, Bangalore Dated 18.03.2026 For Assessment Year (Ay) 2020-21. The Assessee Has Raised Following Grounds Of Appeal: “1. The Id. Cit(A) Erred In Upholding The Disallowance Of Deduction U/S 80P(2)(D) Of The Act, In Regards To The Interest Income Of Rs. 5,34,735/- Received By The Assessee (A Co-Operative Housing Society) From Its Fixed Deposit Kept With Cooperative Bank (Nkgsb Cooperative Bank Ltd.), While Making Prima Facie Adjustment U/S. 143(1) Of The Act By The Cpc. 2. The Id. Cit(A) Erred In Upholding Disallowance Of The Claim U/S. 80P(2)(D) Of The Act Without Appreciating The Fact That The Cpc Has Rejected Such Claim U/S 143 (1) Of The Act Without Issuing Mandatory Show Cause Notice Nor Assigning Any Reasons, Therefore The Action Of The Cpc Is Bad In Law & The Deduction Ought To Be Allowed. 3. The Ld. Cit(A) Erred In Upholding The Disallowance Of The Deduction Claimed By The Appellant Under Section 80P(2)(D) Of The Act, In Respect Of Interest Income Of Rs. 12,765/- & Rs. 5,21,970/- Earned On Fds & Siddhi Infinity Co Operative Housing Society Limited

Section 143Section 143(1)Section 254(1)Section 80P(2)(d)