BHATADI OPENCAST KARMACHARI SAHAKARI PATSANSTHA MARYADIT ,BHATADI,CHANDRAPUR V. INCOME TAX OFFICER WARD-1, CHANDRAPUR

ITA 103/NAG/2025

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The case involves the Bhatadi Opencast Karmachari Sahakari Patsanstha Maryadit, a credit cooperative society, which appealed against the decision of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, which had disallowed their claim for deduction under section 80P for interest income received from cooperative banks. The society argued that such income should be deductible as it is received in the course of its activities as a cooperative society. The Tribunal considered the written submissions of the society and the arguments of the Senior Departmental Representative for the revenue, ultimately deciding in favor of the society based on the interpretation of section 80P(2)(d) and relevant judicial precedents.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 844820 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2020-2021
• Appeal Filed On: 13-02-2025
• Other Referred Cases: Marathwada Krishi Vidyapeeth Karmachari Sahkari Patsanstha Ltd. vs. PCIT-1, Aurangabad, The Sesa Goa Employees Coop. Credit society Ltd. Vs. ACIT, Surat Vankar Sahakari Sangh Ltd. (2016) 72 taxmann.com 169, U.P. Cooperative Sugar Factories (2013) 17 taxmann.com 58, Haryana Co-operative Sugar Mills Ltd. (1989) 46 Taxman 28, Niphad Nagari Sahakari Pata Sanstha Ltd. in ITA No. 1336/PN/2011, CIT ITO V Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha (ITA No. 5006/2013)(Karnataka HC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRISURJIT KUMAR SAHA
• Keywords: Principle of natural justice

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “NAGPUR” BENCH, NAGPUR BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI KHETTRA MOHAN ROY, ACCOUNTANT MEMBER ITA No. 103/NAG/2025 (A.Y.: 2020-21) (Physical hearing) Bhatadi Opencast Karmachari Sahakari Patsanstha Maryadit, Bhatadi Near Bhatadi Project Sub Area, Maharashtra – 442404. PAN: AABAB1466F Vs Assessing Officer Ward – 1, Jalnagar Ward, Near Railway Station, Chandrapur – 442401. Appellant /Assessee Respondent /Revenue Assessee by None Revenue by ShriSurjit Kumar Saha,SR. DR Date of hearing 20.02.2026 Date of pronouncement 17.03.2026 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [for short “CIT(A)”], dated 31.12.2024, for assessment year 2020-21. The assessee has raised the following grounds of appeal: 1) That the order passed by the e-assessment centre, New Delhi is Incorrect and bad in law and against the natural justice. 2) The e-assessment centreerred in disallowing the claim u/s.80P, AO did not pay any attention to the fact that we are a co-operative society. AO did not consider our submissions. He disallowed the Interest received from co-op, banks as well as interest received from other cooperative societies to our society. This is shear negligence and over-looking. 3) Even after submitting all the required documents and explanations, the AD and CIT/A) has disallowed deduction under chapter VI-A to our co-op society. This is unacceptable. He did not pay any heed to our submissions, case-lows. Printed from counselvise.com ITA No.103/Nag/2025 (AY 2020-21) Bhatadi Opencast Karmachari Sahakari Patsanstha Maryadit, Bhatadi 2 4) The Principle of Mutuality has been maintained. 5) Return of income was filed within due dote u/s 139(1). 6) Interest income received from banks has been correctly claimed as deductible u/s.80-P. 7) We do not have nominal members in our society. 8) case law of Jaipur ITA. No. 512/IP/2019 dt.02/09/2019 stated below states that the Interest received by a co-operative society from its investments with co- operative banks in the course of its activities was entitled for claim of deduction under sec. 80P(2)(d) as for the purpose of section BDP(2)(d) of the Act, Co- operative bank shall be treated as a co-operative society. On the basis of this sir, we request you to entitle us for claiming deduction under sec. 80P(2)(d) of the income tax act. 9) ORDER DT. 20/12/2022 OF PUNE BENCH A OF ITAT HAS ORDERED IN THIS REGARD: Order Point No.8: It has been held that the co-operative society assesses are entitled to deduction u/s.80-P(2)(a)(1)/80-P(2)(d) in respect of interest income. They had held the orders sustainable in case of 21 co-operative societies. The copy of which has been attached herewith. We hereby quote the case law of Pune bench of the tribunal in several cases including The Sesa Goa Employees Coop. Credit society Ltd. Vs. ACIT (ITA No.203/PUN/2019, order dated 16-11-2022). 10) That for any other ground of Appeal with kind permission of your honour at the time of hearing of Appeal. PRAYER That the deduction of income of the society Rs. 64,55,883/- be allowed in FULL and the demand including interest charged us.234A,C) to be cancelled. Further, we humbly request to your honour that the demand may kindly be kept pending till the conclusion of this appeal, since the society cannot afford such advance payment.” 2. None appeared on behalf of the assessee despite the service of notice of hearing. However, on perusal of record, we find that assessee has filed certain written submission on record. Therefore, we decided to consider such written submission and to adjudicate on the basis of material available on record and on hearing the submissions of learned Senior Departmental representative (Sr DR) for the revenue. Printed from counselvise.com ITA No.103/Nag/2025 (AY 2020-21) Bhatadi Opencast Karmachari Sahakari Patsanstha Maryadit, Bhatadi 3 3. In the written submission, the assessee has stated that assessee is a credit co-operative society registered under co-operative society Act,1960. The assessee is providing credit facilities to its members only.The assessee while filing return of income claimed deduction u/s. 80P at Rs. 64,55,883/- to the extent of interest earned on saving bank accounts and bank investments. The Assessing Officer (AO) treated such income from other sources. The ld. CIT(A) in order dated 31.12.2024 not allowed the deduction of interest received on investment with cooperative societies and bank. The interest received from fixed deposit investment was treated as taxable. The ld. CIT(A) failed to appreciate that the assessee is a co-operative society. Submission of assessee was not appreciated. The assessee has contended that interest received by co-operative society from co-operative bank in the course of its activities is eligible for deduction u/s. 80P(2)(d). For the purpose of Section 80P(2)(d) co-operative banks is to be treated as co-operative societies. The assessee has also filed the decisions of Pune Tribunal in case of 18 co- operative societies dated 21.12.2022, wherein Marathwada Krishi Vidyapeeth Karmachari Sahkari Patsanstha Ltd. vs. PCIT-1, Aurangabad, ITA No. 102/Pun/2020, is treated as lead case. 4. On the other hand, ld. Sr DR for revenue submits that assessee has not come forward to explain the fact, therefore, appeal may be dismissed. On merit, he supported the order of AO as well as ld. CIT(A). 2. We have considered the written submissions of assessee and the submission of ld. SR DR for the revenue. We find that during assessment the AO disallowed deduction under section 80P(2)(d) at Rs. 16,38,855/- on account Printed from counselvise.com ITA No.103/Nag/2025 (AY 2020-21) Bhatadi Opencast Karmachari Sahakari Patsanstha Maryadit, Bhatadi 4 of interest received from certain co-operative banks, as has been recorded in para 10 of the assessment order. The ld. CIT(A) confirmed the action of AO. We find that in a series of decisions Co-ordinate Benches of Tribunal consistently held that Co-operative Banks are primarily co-operative society and the interest or dividend earned from such Co-operative Bank are eligible for deduction under section 80P(2)(d). Similar View was taken by Gujarat High Court in Gujarat High Court in the case of Surat Vankar Sahakari Sangh Ltd. (2016) 72 taxmann.com 169; Allahabad High Court in the case of U.P. Cooperative Sugar Factories (2013) 17 taxmann.com 58; Punjab Haryana High Court in the case of Haryana Co-operative Sugar Mills Ltd. (1989) 46 Taxman 28 and Pune Tribunal in Niphad Nagari Sahakari Pata Sanstha Ltd. in ITA No. 1336/PN/2011 and in CIT ITO V Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha (ITA No. 5006/2013)(Karnataka HC).In the result, the grounds of appeal raised by the assessee are allowed. 5. In result, the appeal of the assessee is allowed. Order was pronounced on 17.03.2026 as per Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1963. Sd/- KHETTRA MOHAN ROY ACCOUNTANT MEMBER Sd/- PAWAN SINGH JUDICIAL MEMBER Mumbai, Dated: 17/03/2026 Karishma J. Pawar, SR. PS Printed from counselvise.com ITA No.103/Nag/2025 (AY 2020-21) Bhatadi Opencast Karmachari Sahakari Patsanstha Maryadit, Bhatadi 5 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. By Order Assistant Registrar/Senior Private Secretary ITAT, Nagpur Printed from counselvise.com "