GODS GIFT D WING CHS LTD,MUMBAI V. COMMISSIONER OF INCOME TAX (APPEAL), MUMABI

ITA 731/MUM/2024

AI Insights

The case involves Gods Gift D Wing Chs Ltd, a cooperative housing society, appealing against the order of the CIT(A) Mumbai, which denied them a deduction under section 80P(2)(d) of the Income Tax Act, 1961. The deduction was for interest income earned from deposits with cooperative banks. The Assessing Officer and the CIT(A) had both denied the deduction, leading to the appeal. The Tribunal examined the definitions and provisions under the Income Tax Act, relevant judicial precedents, and the specific circumstances of the case. The Tribunal's decision was influenced by the interpretation of 'cooperative society' under section 2(19) of the Act and the judicial precedents supporting the assessee's claim.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33515 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Other Referred Cases: ITO vs. Venkatesh premises co-op society Ltd., lands ed ccs vs ITO ward 16(1) (3), SBI vs CIT, Saraswat cooperative bank ltd., vs ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: USHA GAIKWAD
• Assessee Lawyers: PAWAN CHAUDHARY
• Keywords: Gift
• Section: 250; 154; 143(1); 64; 139(1); 80P; 72; 2(19)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA No. 731/Mum/2024 (Assessment Year: 2020-21) Gods Gift D Wing Chs Ltd NM Joshi Marg, Lower Parel, Mumbai. Vs. CIT(A) Mumbai. PAN/GIR No. AACHC2767A (Applicant) (Respondent) Assessee by Shri Pawan Chaudhary Revenue by Smt. Usha Gaikwad, Sr. DR Date of Hearing 04.03.2025 Date of Pronouncement 04.04.2025 आदेश / ORDER PER SANDEEP GOSAIN, JM: The present appeal has been filed by the assessee challenging the impugned order 09.12.2021 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / CIT(A) Mumbai, for the A.Y 2020-21. The assessee has raised the following grounds of appeal: 1) We have filed Income Tax Return filed for AY 2020-21 u/s 139(1) of income Tax Act, 1961, dated 10.02.2021 and rectification is filed u/s 154 dated 09.12.2021. Notice issued under section 143(1) DIN: CPC/2021/A5/184179968 dated 26.11.2021 and notice u/s 154 DIN: CPC /2021 /U5 2 ITA No. 731/Mum/2024 Gods Gift D Wing Chs, Mumbai. /195521983 dated 09.12.2021 CPC passed the order u/s 154 which was bad in law. Further learned A.O. has not allowed deduction u/s 80(p)(2)(d) in computation sheet and made addition in Intimation order and retain same stand in rectification also therefore not allowed deduction under section 80(p)(2)(d) of Income Tax Act, 1961. The Assessee is a Co- operative Housing Society and income derived from deposits with cooperative banks is allowed as a deduction under section 80P of Income Tax Act, 1961. We had correctly claimed deduction under said section of Rs. 1,11,509 being interest on deposits with co-operative banks U/s 80 P of Income Tax Act, 1961. Deduction for the same was not given in intimation u/s 143(1) as well as in rectification filed u/s 154 of Income tax Act, 1961 dated 09.12.2021. Bear text of Section 80P of is mentioned below. 80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub- section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the Assessee. (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income; Learned CPC taken based of section 2(19) of Income Tax Act, 1961 for definition of cooperative which say cooperative society registered under its Act, therefore cooperative bank also registered under this act, therefore it does not exclude co-operative bank, hence. Your interest so received from co-operative bank is allowable as deduction u/s 80 P of Income Tax Act, 1961. 3 Your honour principal of mutuality held in case of ITO vs. Venkatesh premises co-op society Ltd. by sc a) ITAT Mumbai in the matter of lands ed ccs vs ITO ward 16(1) (3) reported in Mumbai ITA no 3566/mum/2014 decided on 15.01.2016 in respect for AY 2009-10. In this matter the tribunal clearly stated that the revenue was playing with words and the Assessee is entitled to the benefit of section 80p 2(d) in respect of income received from a cooperative bank. b) This was again confirmed in the case of SBI vs CIT reported in (2016) 72 taxmann.com 64 para 17 the Hon Gujarat High court ruled in 3 ITA No. 731/Mum/2024 Gods Gift D Wing Chs, Mumbai. favour of the Society. c) ITAT Mumbai in the matter of Saraswat cooperative bank ltd., vs ITO reported on 30.11.1984, approved the position that the bank is a cooperative society entitled to deduction from taxable income u/s80p 2(a)(i) even though the society (bank) was receiving deposits and making loans to non Members. It further allowed exemption of property income u/s 80p (2) (e) as the income was derived as an incidental accrual on investments mad with the approval of the registrar of Cooperative Societies. 2. At the very outset, we noticed that there is a delay in filing the present appeal and in this regard after going through the case file and considering the submissions of the assessee and hearing the parties and also keeping in view the principles laid down Hon’ble Supreme Court in the case of Land Acquisition Collector Vs. Mst. Katiji & Ors., [1987] AIR 1353 (SC), wherein it has been held that where substantial justice is pitted against technicalities of none deliberate delay, then in that eventuality substantial justice is to be preferred. In our view the principle of advancing substantial justice is of ‘prime importance’. Hence considering the fact that the assessee has justifiably and property explained the delay which occurred in filing the appeal the expression ‘sufficient cause’ is being liberally construed, therefore we are inclined to condone the delay in filing the present and order. Accordingly, now the appeal is admitted to be heard on merits. 3. As per the facts of the case, the assessee is a cooperative housing Society registered under Maharashtra 4 ITA No. 731/Mum/2024 Gods Gift D Wing Chs, Mumbai. cooperative societies Act, 1960. Since during the year under consideration, the assessee had received interest on deposits with cooperative bank, therefore claimed deduction u/s 80P(2)(d) of the act. But the same was denied by AO, and appeal filed by the assessee was also dismissed by Ld. CIT(A). 4. Aggrieved by the order of Ld. CIT(A), assessee has preferred the present appeal before us on the grounds mentioned herein above. 5. All the grounds raised by the asesee are interrelated and interconnected relates to challenging the order of Ld. CIT(A) in confirming the disallowance of deduction u/s 80P(2)(d) of the Act. Therefore, we have decided to take all the issues together and to adjudicate the same through the present consolidated order. 6. At the outset Ld. AR submitted that the issue in question is squarely covered in favour of assessee by the decision of the Coordinate Bench of ITAT in the case of Ashok Tower D Cooperative Housing Society Ltd., Vs. ITO [2024] 163 taxmann.com 598 (Mum). 5 ITA No. 731/Mum/2024 Gods Gift D Wing Chs, Mumbai. 7. On the other hand, Ld. DR representing the respondent relied upon the orders passed by the revenue authorities. 9. We have heard the counsels for both the parties, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities. Ld. AR submitted that the issues in the present appeal are fully covered by the decision of coordinate bench of ITAT in case of Ashok tower “D” Co. Op. Housing Society Ltd. Vs. ITO, reported in [2024] 163 taxmann.com 598 (Mumbai-Trib), where in it was held that assessee co-operative housing society was eligible for deduction u/s 80P(2)(d) in respect of interest income earned by it from a co-operative bank and accordingly, AO was directed to grant deduction to assessee on interest income earned from cooperative banks u/s 80(2)(d). The operative portion of the order of the coordinate bench of ITAT is reproduced herein below: 9. We have heard the rival contentions and perused the orders of the lower authorities. The simple controversy involved in this appeal is that assessee is a co-operative society, has placed certain funds with cooperative banks and earned interest thereon of Rs. 1,472,930/-. The claim of the assessee is that deduction is available under section 80 P (2) (d) of the act to the assessee. 10. According to the provisions of section 80 P in case of a cooperative society the gross total income if it includes the 6 ITA No. 731/Mum/2024 Gods Gift D Wing Chs, Mumbai. income referred to in is subsection (2) then same shall be granted as a deduction subject to the conditions and to the extent of amount specified from the total income. In subsection 2, clause (d) provides that in respect of income by way of interest on dividend derived by the cooperative society from its investment with any other cooperative society the whole of such income is eligible for deduction. Therefore if the cooperative society makes any investment in another cooperative societies and consequently on any the cooper dividend earned from such investment total sum so is eligible for deduction. 11. The controversy involved here is that the argument of the revenue is that when the assessee has made investment in another cooperative society copy then this deduction is allowable. Therefore according to the if amount is not investment trative society, the deduction is not eligible. The reden to the AO if the count is investment in a cooperative bank which is different from cooperative societies or the says that cooperative societies and therefore the assessee is not entitled to deduction under section 80 P (2) (d) of the Act. 12. Section 2 (19) of the act defines cooperative society means a cooperative society registered under the Cooperative societies act, 1912 or under any other law for the time being in force in any State for the registration of cooperative societies. Thus if the cooperative banks are falling into the definition of cooperative societies', naturally the deduction would be eligible to the assessee under section 80 P (2) (d) of the act. Therefore it needs to be examined that whether the cooperative banks are operative societies under section 2 subsection (19) of the act are not. 13. Section 2 (10) of the Maharashtra cooperative societies act defines \"Co-operative bank\" means a Co- operative society which is doing the business of banking as defined in clause (b) of sub-sections (1) of section 5 of the Banking Companies Act, 1949 and includes any society which is functioning or is to function as an Agricultural and Rural Development Bank under 7 ITA No. 731/Mum/2024 Gods Gift D Wing Chs, Mumbai. Chapter XI; Therefore according to the above definition, the cooperative banks are also cooperative society 14. Thus, though the assessee has referred to several judicial precedents, even after considering those precedents, which also holds the same view, we do not have any hesitation to hold that the amount of investment made by the assessee with cooperative banks in Maharashtra are also investment made in cooperative society. 15. Thus, on plain reading of the sections of the income tax act it is clear that if assessee has made an investment in fixed deposit receipts or in savings bank account, interest earned thereon is eligible for deduction under section 80 P (2) (d) of the act. The words of the statute are plain and clear and there is no room for applying any of the principles of interpretation. We are supposed to interpret them as they stand. It is not the claim of the revenue that assessee is not a cooperative society. 16. In the result, the orders of the lower authorities are reversed and the learned AO is directed to grant deduction to the assessee on interest income earned from cooperative banks u/s 80 P (2) (d) of The Act. 17. In the result, Appeal of the assessee is allowed. 10. Since the facts of the present case are similar to the facts of the above mentioned case, and assessee has also derived income from deposits with Co-operative banks of claimed deduction u/s 80(P)(2) of Income-tax Act. Therefore, in view of the discussion made above and respectfully, following the decision in the case of Ashok tower “D” Co. Op. Housing Society Ltd. (supra) cited above, we decide ground in favour of assessee and accordingly direct AO to grant deduction on interest 8 ITA No. 731/Mum/2024 Gods Gift D Wing Chs, Mumbai. income earned from Co-operative banks u/s 80(P)(2) of the Act raised by the assessee are allowed. 11. In the result the appeal filed by the assessee stands allowed. Order pronounced in the open court on 04.04.2025. Sd/- Sd/- (BR BASKARAN) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 04/04/2025 KRK, SPS आदेश की \bितिलिप अ\u000eेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. \u000eथ / The Respondent. 3. संबंिधत आयकर आयु\u0019 / The CIT(A) 4. आयकर आयु\u0019(अपील) / Concerned CIT 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, मु\u0003बई / DR, ITAT, Mumbai 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, स\u000eािपत ित //True Copy// 1. उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु\u0003बई मु\u0003बई मु\u0003बई मु\u0003बई / ITAT, Mumbai 9 ITA No. 731/Mum/2024 Gods Gift D Wing Chs, Mumbai. Date 1. Draft dictated on 04.03.2025 2. Draft placed before author 02.04.2025 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk 10. Date of dispatch of Order. 11. Dictation Pad is enclosed "