ASHWINIKUNJ SAHAKARI GRUHRACHANA SANSHTA MARYADIT,PUNE V. INCOME TAX OFFICER WARD 13 2 PUNE, PUNE

ITA 1803/PUN/2024

AI Insights

The case involves Ashwinikunj Sahakari Gruhrachana Sanstha Maryadit, a cooperative society engaged in accepting deposits and providing credit facilities to its members, which appealed against the order of the National Faceless Appeal Centre (NFAC) that dismissed its appeal regarding the disallowance of a deduction claimed under section 80P(2)(d) for the assessment year 2020-21. The primary legal issue was whether the interest income earned from deposits with Janata Sahakari Bank Ltd qualifies for deduction under section 80P(2)(d). The Tribunal, referencing decisions from the Karnataka High Court, concluded that such interest income does qualify for deduction, thus allowing the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 32546 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-10-2024
• Assessment Year: 2020-2021
• Appeal Filed On: 29-08-2024
• Other Referred Cases: CIT vs. Totagars Cooperative Sale Society, 392 ITR 74 (Karn), Totgar's Co-operative Sale Society Ltd. Vs. ITO (2010) 322 ITR 283(SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B. S. RAJPUROHIT
• Assessee Lawyers: AMEY SANE
• Keywords: Rectification of order

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1803/PUN/2024 \u000bनधा\u000fरण वष\u000f / Assessment Year : 2020-21 Ashwinikunj Sahakari Gruhrachana Sanstha Maryadit, 4648/B, Shivajinagar, Pune City, Model Colony S.O., Pune 411 016, Maharashtra PAN : AAAJA2274Q Vs. ITO, Ward-13(2), Pune Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the appellant directed against the order of National Faceless Appeal Centre (NFAC), Delhi dated 19.07.2024 for the assessment year 2020-21. 2. Brief facts of the case are that the appellant is Cooperative Society. It is engaged in the business of accepting deposits from its members and providing credit facilities to its members. The Return of Income for the assessment year 2020-21 was filed on 12.12.2020. Return was processed u/s.143(1) vide intimation dated 25.11.2021 making an adjustment of Rs.1,90,930/-, thereby disallowing the deduction of Rs.4,95,320/- claimed u/s.80P(2)(d). The appellant Assessee by : Shri Amey Sane Revenue by : Shri B.S.Rajpurohit Date of hearing : 14.10.2024 Date of pronouncement : 14.10.2024 ITA No.1803/PUN/2024 2 society filed a rectification application u/s.154. The CPC passed order dated 28.06.2022 rejecting the said application. 3. Being aggrieved by the above rectification order, an appeal was filed before the NFAC, who vide impugned order dismissed the appeal. 4. Being aggrieved, the appellant society is in appeal before this Tribunal in the present appeal. 5. I heard the rival submissions and perused the material on record. The solitary issue in the present appeal relates to the allowability of deduction u/s.80P(2)(d) in respect of interest income earned by a Cooperative Society formed with the object of accepting deposits from Members and lending money to its Members, which is no more res integra in view of catena of decisions passed by this Bench on this very issue. 6. In the present case, I find that admittedly the appellant society earned interest on deposits made with Janata Sahakari Bank Ltd. On perusal of provisions of section 80P(2)(d), it is clear that the income derived by a cooperative society from its investment held with other cooperative banks shall be exempt from the total income of a cooperative society. Therefore, what is relevant for claiming of deduction u/s 80P(2)(d) is that interest income should have been derived from the investment made by the assessee cooperative society with any other cooperative society. This issue was considered by the Hon’ble Karnataka High Court in the case of CIT vs. Totagars Cooperative Sale Society, 392 ITR 74 (Karn) wherein the Hon’ble High Court after referring to the decision of the Hon’ble Supreme Court in the case of Totgar’s Co-operative Sale Society Ltd.Vs. ITO (2010) 322 ITR 283(SC) held that the ratio of decision of the Hon’ble Supreme Court is not to be applicable in respect of interest income on investment ITA No.1803/PUN/2024 3 as same falls under the provisions of section 80P(2)(d) and not u/s. 80P(2)(a)(i) of the Act. In the light of this discussion, I am of the considered opinion that the interest income earned by cooperative society on deposits made out of surplus funds with cooperative banks qualify for deduction under the provisions of section 80P(2)(d) of the Act. Therefore, the grounds of appeal raised by the appellant society stand allowed. 7. The CPC ought to have allowed the rectification petition filed by the appellant society inasmuch as the issue of exemption of interest income earned by a Cooperative society on investments made with Cooperative banks is no longer res integra in view of several decisions passed by this Tribunal following the judgment of Hon’ble Karnataka High Court in the case of CIT Vs. Totagars Cooperative Sale Society (supra). 8. In the result, the appeal filed by the appellant is allowed. Order pronounced on this 14th day of October, 2024. Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 14th October, 2024. Satish आदेश क\u0002 \u0003ितिलिप अ\tेिषत / Copy of the Order forwarded to : 1. अपीलाथ\f / The Appellant. 2. \r\u000eयथ\f / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय \rितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब\u0014च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "