JANKALYAN GRAMIN BIGARSHETI SAHAKARI PATHSANSTHA MARYADIT ASOND,RATNAGIRI V. INCOME TAX OFFICER, RATNAGIRI

ITA 2439/PUN/2024

AI Insights

The case involves Jankalyan Gramin Bigarsheti Sahakari Pathsanstha Maryadit Asond, a Cooperative Society engaged in lending money and accepting deposits, which appealed against the order of the National Faceless Appeal Centre (NFAC) that confirmed the disallowance of a deduction claimed under section 80P(2)(d) of the Income Tax Act, 1961. The deduction was initially disallowed by the Assessing Officer on the grounds that the society failed to segregate investments made with Cooperative Societies and Cooperative Banks. The NFAC upheld this decision, referencing Supreme Court decisions that interpreted the scope of section 80P. However, the Tribunal, referencing its own precedents, ruled in favor of the society, allowing the deduction claimed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24798 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Other Referred Cases: Mavilayi Service Cooperative Bank Ltd. and Others Vs.CIT, Totagars Cooperative Sale Society Vs. ITO, Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. ITO, The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD PAWAR
• Section: 80P

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.2439/PUN/2024 Assessment Year : 2020-21 Jankalyan Gramin Bigarsheti Sahakari Pathsanstha Maryadit Asond, Jankalyan Gramin Coop Soc, A/P. Asond, Tal-Dapoli, Ratnagiri-415709, Maharashtra PAN : AAATJ8258P V/s ITO, Ward-1, Ratnagiri Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal pertaining to Assessment Year 2020- 21 at the instance of assessee is directed against the order dated 30.09.2024 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter referred Assessee by : None Revenue by : Shri Vinod Pawar Date of hearing : 26.12.2024 Date of pronouncement : 06.01.2025 ITA No.2439/PUN/2024 Jankalyan Gramin Bigarsheti Sahakari Pathasanstha Maryadit Asond to as ‘the Act’) which in turn is arising out of Assessment Order dated 19.09.2022 passed u/s.143(3) r.w.s.144B of the Act. 2. Tersely, the facts of the case emanating from the record are that the assessee is a Cooperative Society registered under The Maharashtra Cooperative Societies Act, 1960. The assessee is engaged in the activity of lending money to the members and accepting deposits from them. The assessee society for the year under consideration filed the return of income declaring Nil income after claiming deduction u/s.80P(2)(a)(i) at Rs.41,82,337/- and u/s.80P(2)(d) of the Act at Rs.35,25,457/-. A show cause notice was issued to the assessee as to why the issue related to large claim of deduction under Chapter VI would be allowed u/s.80P of the Act and further calling upon it to provide documentary evidence in respect of status claimed as a Cooperative Society and the assessee filed its submissions. The Assessing Officer after considering the submissions of the assessee disallowed the deduction claimed u/s.80P(2)(d) on the interest earned from investment by holding as under : “As far as issue of interest earned from investment, the assessee is not entitled to claim of deduction u/s 80P(2)(d) particularly when the assessee failed to segregate the investments made with cooperative society and cooperative bank. The P&L A/c dully reflects that the assessee had earned income related to interest from RDCC, VKGB, Dapoli Urban Bank DNS Investment etc and the assessee has failed to substantiate that the same are of pure cooperative society, not even cooperative banks which itself are distinct by way of provision of Sec 80P(4).” ITA No.2439/PUN/2024 Jankalyan Gramin Bigarsheti Sahakari Pathasanstha Maryadit Asond 3. Aggrieved assessee filed appeal before the ld.NFAC who vide impugned order confirmed the action of the Assessing Officer on the ground that the assessee is not entitled to deduction u/s.80P(2)(d) of the Act on the ground that the interest earned out of investments made with Nationalized Banks and Cooperative Banks. While doing so, the ld. NFAC relied on the decisions of Hon’ble Supreme Court in the case of Mavilayi Service Cooperative Bank Ltd. and Others Vs.CIT 123 taxman.com 161 and Totagars Cooperative Sale Society Vs. ITO 188 taxmann.com 282 (SC). 4. Now the assessee is in appeal before the Tribunal by raising the following solitary ground : “1. On the facts and circumstances of the case and in law the CIT(A), NFAC erred in confirming the action of the AO of denying deduction under section 80P in respect interest earned by the appellant society on deposits with other co-operative banks, not accepting the submission of the appellant in this respect. The appellant prays that the AO be directed to delete the addition.” 5. When the appeal was called for, none appeared on behalf of the assessee despite due service of notice of hearing, I therefore proceed to dispose of the appeal with the able assistance from the ld. Departmental Representative exparte qua the assessee. ITA No.2439/PUN/2024 Jankalyan Gramin Bigarsheti Sahakari Pathasanstha Maryadit Asond 6. I have heard the ld. Departmental Representative and perused the record placed before me. The solitary issue that arises for my consideration is regarding quantification of deduction u/s.80P(2)(d) of the Act. A perusal of the orders of the lower authorities indicate that claim made has been denied because the assessee failed to segregate the investment made with Cooperative Societies and Cooperative Banks. 7. Section 80P(2)(d) of the Act provides that the sum received in respect of any income by way of interest or dividend derived by Cooperative Society from its investment with any other Cooperative Society, the whole of such income is eligible for deduction u/s.80P of the Act. I find that this issue is no more res integra as the Coordinate Benches of this Tribunal has been consistently holding that the interest income earned out of the FDs/Investments kept with Cooperative Banks is allowable u/s.80P(2)(d) of the Act. I find that this Tribunal in case of Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. ITO in ITA No.1365/PUN/2023, dated 01.01.2024 dealing with similar issue after placing reliance on another decision of this Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in ITA No.84/PAN/2018, dated 27.05.2022 has held that the interest earned from deposits with Cooperative Banks are also eligible for deduction ITA No.2439/PUN/2024 Jankalyan Gramin Bigarsheti Sahakari Pathasanstha Maryadit Asond u/s.80P(2)(d) of the Act as Cooperative Banks are basically Cooperative Societies only but have turned into Bank on getting necessary banking license. 8. In the light of above discussion, even if the interest income of the assessee society is from Cooperative Societies and Cooperative Banks, then also it is eligible. Finding of lower authorities nowhere dispute the fact that alleged sum is interest income received from Cooperative Banks and Cooperative Societies. Since interest from both of them are eligible for deduction u/s.80P(2)(d) of the Act, I therefore set-aside the finding of ld.CIT(A) and allow the alleged claim of deduction u/s.80P(2)(d) at Rs.35,25,457/-. Ground of appeal raised by the assessee is allowed. 9. In the result, the appeal of the assessee is allowed. Order pronounced on this 06th day of January, 2025. - Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे/Pune; \u0001दनांक / Dated : 06th January, 2025 Satish ITA No.2439/PUN/2024 Jankalyan Gramin Bigarsheti Sahakari Pathasanstha Maryadit Asond आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “(SMC)” ब\u0014च, पुणे/ DR, ITAT, “(SMC)” Bench, Pune. 5. गाड\u0018 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune "