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)

T 1349 Madukkar Paccs Ltd., Thanjavur vs. ITO, Ward-1, Thanjavur

In the result, appeals filed by the assessee are allowed

ITA 912/CHNY/2026[2020-21]Status: DisposedITAT Chennai25 May 2026AY 2020-21

Bench: Shri Aby T. Varkey & Shri Inturi Rama Raoआयकर अपील सं./Ita No.910/Chny/2026, ननिाारणवर्ा/Assessment Year: 2018-19 आयकर अपील सं./Ita No.911/Chny/2026, ननिाारणवर्ा/Assessment Year: 2018-19 आयकर अपील सं./Ita No.912/Chny/2026, ननिाारणवर्ा/Assessment Year: 2020-21 V. T 1349 Madukkur Paccs Ltd, Income Tax Officer, Madukkur Post, Pattukottai, Ward-1, Thanjavur, Thanjavur. Tamil Nadu-614 903. [Pan: Aacat8726F] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee By : Mr.Abhishek Murali, C.A : प्रत्यर्थी की ओर से /Revenue By Ms.R.Anitha, Addl.Cit सुनवाईकीतारीख/Date Of Hearing : 20.04.2026 घोर्णाकीतारीख /Date Of Pronouncement : 25.05.2026 आदेश / O R D E R Per Aby T. Varkey, Jm: These Are Appeals Preferred By The Assessee Primary Agricultural Cooperative Credit Society (Paccs) Against The Order Of The Learned Commissioner Of Income Tax (Appeals)/Nfac, (Hereinafter Referred To As The ‘Ld.Cit(A)‘), Delhi. Ita No.911/Chny/2026 Is Against The Confirmation Of Quantum Assessment By The Ld.Cit(A) By Order Dated 16.12.2025 For The Assessment Year (Hereinafter Referred To As ‘Ay‘) 2018-19 & Ita No.910/Chny/2016 Is Against The Penalty Confirmed By The Ld.Cit(A)/

For Appellant: Mr.Abhishek Murali, C.A
Section 56Section 80P(2)(b)Section 80P(2)(d)

T 1349 Madukkur Paccs Ltd., Thanjavur vs. ITO, Ward-1, Thanjavur

In the result, appeals filed by the assessee are allowed

ITA 911/CHNY/2026[2018-19]Status: DisposedITAT Chennai25 May 2026AY 2018-19

Bench: Shri Aby T. Varkey & Shri Inturi Rama Raoआयकर अपील सं./Ita No.910/Chny/2026, ननिाारणवर्ा/Assessment Year: 2018-19 आयकर अपील सं./Ita No.911/Chny/2026, ननिाारणवर्ा/Assessment Year: 2018-19 आयकर अपील सं./Ita No.912/Chny/2026, ननिाारणवर्ा/Assessment Year: 2020-21 V. T 1349 Madukkur Paccs Ltd, Income Tax Officer, Madukkur Post, Pattukottai, Ward-1, Thanjavur, Thanjavur. Tamil Nadu-614 903. [Pan: Aacat8726F] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee By : Mr.Abhishek Murali, C.A : प्रत्यर्थी की ओर से /Revenue By Ms.R.Anitha, Addl.Cit सुनवाईकीतारीख/Date Of Hearing : 20.04.2026 घोर्णाकीतारीख /Date Of Pronouncement : 25.05.2026 आदेश / O R D E R Per Aby T. Varkey, Jm: These Are Appeals Preferred By The Assessee Primary Agricultural Cooperative Credit Society (Paccs) Against The Order Of The Learned Commissioner Of Income Tax (Appeals)/Nfac, (Hereinafter Referred To As The ‘Ld.Cit(A)‘), Delhi. Ita No.911/Chny/2026 Is Against The Confirmation Of Quantum Assessment By The Ld.Cit(A) By Order Dated 16.12.2025 For The Assessment Year (Hereinafter Referred To As ‘Ay‘) 2018-19 & Ita No.910/Chny/2016 Is Against The Penalty Confirmed By The Ld.Cit(A)/

For Appellant: Mr.Abhishek Murali, C.A
Section 56Section 80P(2)(b)Section 80P(2)(d)

T 1349 Madukkur Paccs Ltd., Thanjavur vs. ITO, Ward-1, Thanjavur

In the result, appeals filed by the assessee are allowed

ITA 910/CHNY/2026[2018-19]Status: DisposedITAT Chennai25 May 2026AY 2018-19

Bench: Shri Aby T. Varkey & Shri Inturi Rama Raoआयकर अपील सं./Ita No.910/Chny/2026, ननिाारणवर्ा/Assessment Year: 2018-19 आयकर अपील सं./Ita No.911/Chny/2026, ननिाारणवर्ा/Assessment Year: 2018-19 आयकर अपील सं./Ita No.912/Chny/2026, ननिाारणवर्ा/Assessment Year: 2020-21 V. T 1349 Madukkur Paccs Ltd, Income Tax Officer, Madukkur Post, Pattukottai, Ward-1, Thanjavur, Thanjavur. Tamil Nadu-614 903. [Pan: Aacat8726F] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee By : Mr.Abhishek Murali, C.A : प्रत्यर्थी की ओर से /Revenue By Ms.R.Anitha, Addl.Cit सुनवाईकीतारीख/Date Of Hearing : 20.04.2026 घोर्णाकीतारीख /Date Of Pronouncement : 25.05.2026 आदेश / O R D E R Per Aby T. Varkey, Jm: These Are Appeals Preferred By The Assessee Primary Agricultural Cooperative Credit Society (Paccs) Against The Order Of The Learned Commissioner Of Income Tax (Appeals)/Nfac, (Hereinafter Referred To As The ‘Ld.Cit(A)‘), Delhi. Ita No.911/Chny/2026 Is Against The Confirmation Of Quantum Assessment By The Ld.Cit(A) By Order Dated 16.12.2025 For The Assessment Year (Hereinafter Referred To As ‘Ay‘) 2018-19 & Ita No.910/Chny/2016 Is Against The Penalty Confirmed By The Ld.Cit(A)/

For Appellant: Mr.Abhishek Murali, C.A
Section 56Section 80P(2)(b)Section 80P(2)(d)