Ichalkaranji Vyapari Sahakari Patsanstha Ltd, Ichalkaranji, Ichalkaranji V. Income Tax Officer, Ward-1, Ichalkaranji, Ichalkaranji

ITA 478/PUN/2023

AI Insights

The case revolves around the denial of deduction under section 80P of the Income-tax Act, 1961, concerning interest income earned by Ichalkaranji Vyapari Sahakari Patsanstha Ltd. from deposits with other cooperative banks. The Assessing Officer initially denied the deduction, citing a Supreme Court judgment in PCIT Vs. Totgars Co-operative Sale Society Ltd. The first appeal upheld this decision. However, the Tribunal, referencing decisions from Pune Benches and the specific wording of section 80P(2)(d), concluded that the interest income from deposits with cooperative banks qualifies for deduction, overturning the lower authorities' decisions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124141 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-06-2023
• Assessment Year: 2020-2021
• Appeal Filed On: 23-04-2023
• Other Referred Cases: PCIT Vs. Totgars Co-operative Sale Society Ltd., Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 2(19)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA No.478/PUN/2023 नधा रण वष / Assessment Year : 2020-21 Ichalkaranji Vyapari Sahakari Patsanstha Ltd., Ichalkaranji 5/179/1, Vyapari Bhavan, Dhanya Lane, Ichalkaranji – 416 115 Tal. Hatkanangale, Dist. Kolhapur PAN : AAAAI0209E Vs. ITO, Ward-1, Ichalkaranji Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP: This appeal by the assessee is directed against the order dated 17-03-2023 passed by the CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2020-21. 2. The only issue raised herein is against the denial of deduction u/s.80P in respect of interest income earned from the deposits with other cooperative banks. 3. Briefly stated, the facts of the case are that the asessee is a Cooperative credit society registered under Maharashtra State Co- Assessee by Shri Pramod Shingte Revenue by Shri Gurmel Singh Date of hearing 07-06-2023 Date of pronouncement 07-06-2023 ITA No.478/PUN/2023 Ichalkaranji Vyapari Sahakari Patsanstha Ltd., 2 operative Societies Act engaged in the business of providing credit facilities to its members out of deposits collected from the members. It claimed deduction u/s.80P(2) in respect of interest income of Rs.40,65,267/- from the deposits kept with other cooperative banks. The Assessing Officer (AO) did not allow the deduction either u/s.80P(2)(a)(i) or u/s.80P(2)(d), by relying on judgment of the Hon’ble Supreme Court in the case of PCIT Vs. Totgars Co-operative Sale Society Ltd., 83 taxmann.com 140. The action of the Assessing Officer came to be approved in the first appeal on this issue, against which the assessee has come up in appeal before the Tribunal contending that the deduction be allowed u/s 80P(2)(d) of the Act. 4. After considering the rival submissions and perusing the relevant material on record, it is seen that the assessee is a co-operative society and earned interest income amounting to Rs.40,65,267/- from the deposits with other Co-operative Banks. The extant issue is no more res integra in view of the catena of decisions delivered by the Pune Benches, including the Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT (ITA No.1249/PUN/2018) holding, vide its order dated 07-01-2022, that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to ITA No.478/PUN/2023 Ichalkaranji Vyapari Sahakari Patsanstha Ltd., 3 insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co- operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co- operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The payer of interest is also a Co-operative society registered under the Cooperative Societies Act. Respectfully following the decision of the Division Bench, I overturn the impugned order and direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest earned from various cooperative banks. 5. In the result, the appeal is allowed. Order pronounced in the Open Court on 07 th June, 2023. Sd/- (R.S.SYAL) VICE PRESIDENT पुणे Pune; िदनांक Dated : 07 th June, 2023 सतीश ITA No.478/PUN/2023 Ichalkaranji Vyapari Sahakari Patsanstha Ltd., 4 आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. 4. 5. The Pr.CIT concerned DR, ITAT, ‘SMC’ Bench, Pune गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 07-06-2023 Sr.PS 2. Draft placed before author 07-06-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *