Section 80P(2) of the Income Tax Act

Income-tax Act, 2025: s.149

Section 80P(2) 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) is Mantola Co-operative Thrift & Credit Society Ltd. v. CIT (50 Taxmann.com 278), cited in 242 of the 332 judgments on BharatTax that turn on this section.

Leading authorities on Section 80P(2)

Mantola Co-operative Thrift & Credit Society Ltd. v. CIT
50 Taxmann.com 278 · 2014 · High Court
242
citing judgments

A cooperative society is not entitled to deduction under Section 80P(2)(a)(i) for interest income earned from investments and deposits which are not attributable to its primary business. An assessment order erroneously allowing such a deduction is revisable under Section 263 as being erroneous and prejudicial to the revenue, or subject to reassessment under Section 147.

CIT v. Punjab State Cooperative Agricultural Development Bank Ltd.
389 ITR 68 · 2016 · High Court
192
citing judgments

Income earned by a cooperative society from investing its surplus funds in short-term deposits and securities is not attributable to its core activities and therefore not eligible for deduction under Section 80P(2)(a)(i) of the Income-tax Act.

CIT v. Southern Eastern Employees Cooperative Credit Society Ltd.
390 ITR 524 · 2017 · High Court
170
citing judgments

Income from surplus funds invested in short-term deposits and securities by a cooperative credit society is not attributable to its activities and is therefore not eligible for exemption under section 80P(2)(a)(i) of the Income-tax Act.

Sant Motiram Maharaj Sahakari Pat Sanstha Ltd. v. ITO
120 Taxmann.com 10 · 2020 · ITAT
135
citing judgments

Interest earned by a Cooperative credit Society from deposits with a Cooperative bank is eligible for deduction under Section 80P(2) of the Income-tax Act. Revisional orders under Section 263 disallowing such deduction are invalid if the original allowance was correct.

CIT v. Ankita Electronics Pvt. Ltd.
379 ITR 50 · 2015 · High Court
45
citing judgments

When the High Court admits a substantial question of law concerning an assessee's claim or alleged default, it indicates the assessee's bona fides, thereby preventing the imposition of penalties under sections 271(1)(c) or 271C. The mere disallowance of a claim or an addition by revenue authorities does not automatically lead to a penalty if the issue is debatable and pending appeal.

CIT v. Jay Kumar B. Patil
236 ITR 469 · 1999 · Supreme Court
19
citing judgments

The revisional powers of the Principal Commissioner under Section 263 extend to matters not considered and decided in an appeal, even if these matters were part of the original assessment.

PCIT v. Kundrathur Finance and Chit Co.
283 ITR 329 · 2006 · High Court
19
citing judgments

The genuineness of a transaction does not constitute a reasonable cause for the non-levy of penalty under Section 271D of the Income Tax Act, 1961.

ITO v. Shri Bhairavnath Multistate Cooperative Credit Society Ltd.
164 Taxmann.com 382 · 2024 · ITAT
17
citing judgments

Interest income earned by a cooperative society from investments of its surplus funds in cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.

Liberty India v. CIT (
288 ITR 494 · 2007 · High Court
17
citing judgments

Interest and other income are not considered to be 'derived from' the business and are therefore not eligible for deduction under Section 80IA. Separate additions cannot be made for investments in movable property if the source of such investment has already been subjected to tax.

Bhagyalaxmi Co-op. Hsg. Soc. Ltd. v. DCIT
170 Taxmann.com 336 · 2025 · High Court
8
citing judgments

Judgments on Section 80P(2)

Muktadevi Gramin Bigarsheti Sahakari Patsanstha Maryadit Gunjalwadi, Pune vs. ITO Ward 10(1), Pune

ITA 1840/PUN/2024[2017-18]Status: DisposedITAT Pune22 Nov 2024AY 2017-18

Bench: Ms.Ashta Chandra & Dr.Dipak P. Ripoteआयकर अपील सं. / Ita No.1840/Pun/2024 िनधा"रण वष" / Assessment Year: 2017-18 Muktadevi Gramin Bigarsheti V The Income Tax Officer, Sahakari Patanstha Maryadit S Ward-10(1), Pune. Gunjalwadi, At Post – Gunjalwadi,Taluke – Junnar, District – Pune, Pune – 412401. Pan: Aaaam6151H Appellant/ Assessee Respondent / Revenue Assessee By None Revenue By Shri A.D.Kulkarni – Addl.Cit(Dr) Date Of Hearing 19/11/2024 Date Of Pronouncement 22/11/2024 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By The Assessee Directed Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac], Under Section 250 Of The Income Tax Act, 1961 Dated 09.07.2024 For A.Y.2017-18. The Assessee Has Raised The Following Grounds Of Appeal : “Being Aggrieved By The Order Dated 09/07/2024 Passed By The Learned Commissioner Of Income Tax (Appeals), Nfac, Delhi U/S 250 Of The Income-Tax Act, 1961 (“Act”), Your Appellant Prefers This Appeal, Among Others, On The Following Grounds Of Appeal, Each Of Which Is Without Prejudice To & Independent Of, The Other: 1. On The Facts & In The Circumstances Of The Case & In Law, The Appellant Submits That Ld. Cit(A) Erred By Making Disallowance Of Our Claim For Deduction U/S. 80P(2) Of The Act. The Appellant, Therefore, Prays That Deduction U/S. 80P (2) (A) (I) & 80P (2) (C) (Ii) Be Allowed To Us As Claimed In Itr. 2. Your Appellant Craves Leave To Alter, Modify, Amend Or Delete Any Of The Above Grounds Of Appeal, Or To Add One Or More New Ground(S), As May Be Necessary.” Submission Of Ld.Ar : 2. None Appeared On Behalf Of The Assessee, However, Assessee Has Filed A Paper Book & Written Submission. We Have Considered The Written Submission & Paper Book.

Section 250Section 70Section 80Section 80PSection 80P(2)