LOHAGAON NAGRI SAHAKARI PATSANSTHA MARYADIT,PUNE V. PR CIT, PUNE-4, PUNE, PUNE

ITA 865/PUN/2025

AI Insights

The case involves Lohagaon Nagri Sahakari Patsanstha Maryadit, a cooperative society, which appealed against the order of the PCIT, Pune-4. The PCIT had invoked section 263 of the Income Tax Act, 1961, claiming that the assessment order for A.Y. 2020-21 was erroneous and prejudicial to the interests of the Revenue because it allowed a deduction under section 80P(2)(d) for interest income from investments with cooperative banks. The Tribunal examined the precedents and found that the issue of allowing such deductions was well-settled, thus quashing the PCIT's order and upholding the original assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771906 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2020-2021
• Other Referred Cases: M/s. OM Siddhakala Associates Vs. DCIT, Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal 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: AMOL KHAIRNAR
• Assessee Lawyers: PRAMOD S SHINGTE
• Keywords: Set aside; Additional evidence; Principle of natural justice; Revision of order
• Section: 263

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “A”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND MS.ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.865/PUN/2025 Assessment Year : 2020-21 Lohagaon Nagri Sahakari Patsanstha Maryadit Khese Colony, Lohagaon, Pune 411047 PAN: AAAAL0089R Vs. PCIT, Pune-4, Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y.2020-21 is directed against the order dated 27.02.2025 of PCIT, Pune-4 passed u/s.263 of the Income- tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 23.09.2022 passed u/s.143(3) r.w.s144B of the Act. 2. Assessee has raised following grounds of appeal : “1. On the facts and in the circumstances of the case and in law, Ld. PCIT, Pune-4, erred in passing an order u/s.263 of IT Act, the action of Ld. PCIT is arbitrary and since the issue has attained finality and the assessment order does not contain any error, the order passed u/s 263 is void and accordingly, appellant prays to quash the order. Appellant by : Shri Pramod S Shingte Respondent by : Shri Amol Khairnar Date of hearing : 24.07.2025 Date of pronouncement : 25.08.2025 Printed from counselvise.com ITA No.865/PUN/2025 Lohagaon Nagri Sahakari Patsanstha Maryadit 2 Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice. 3. Brief facts of the case are that the assessee is a Cooperative Society and Nil income declared for A.Y. 2020- 21 in the return filed on 12.01.2021 after claiming deduction u/s.80P of the Act at Rs.56,07,235/-. Assessment u/s.143(3) r.w.s.144B of the Act was completed accepting the returned income. Thereafter, ld. PCIT invoked section 263 of the Act raising the sole issue that assessee has claimed deduction u/s.80P of the Act for the interest income earned from investments with cooperative banks. Assessee gave detailed submissions before ld. Assessing Officer stating that in light of settled judicial precedents and the various decisions of this Hon’ble Tribunal ld. AO has accepted the contention of the assessee and allowed the deduction u/s.80P(2)(d) of the Act for the interest income earned from investments with cooperative banks. However, ld. PCIT was not satisfied with this reply and still held that the assessment order dated 23.09.2022 is erroneous and prejudicial to the interest of Revenue. 4. Now the assessee is in appeal before this Tribunal assailing the order of ld.PCIT. 5. Ld. Counsel for the assessee referring to the judgment of Hon’ble Bombay High Court in the Writ Petition No.14178/2023 order dated 28.03.2024 in the case of M/s. OM Siddhakala Associates Vs. DCIT submitted that Hon’ble Court has held that as per principle of judicial discipline, orders of highest Appellate Authorities should be followed unreservedly by the subordinate Authorities. He submitted Printed from counselvise.com ITA No.865/PUN/2025 Lohagaon Nagri Sahakari Patsanstha Maryadit 3 that even when the various decisions of this Tribunal were putforth before ld. PCIT in support of the contention that valid claim u/s.80P(2)(d) has been made for the interest income earned from investments with cooperative banks, still ld. PCIT has passed the impugned order and therefore the same deserves to be quashed. 6. On the other hand, ld. Departmental Representative supported the order of ld.PCIT. 7. We have heard the rival contentions and perused the record placed before us. Assessee is aggrieved with the invocation of section 263 of the Act and the finding of ld. PCIT holding that the assessment order dated 23.09.2022 for A.Y. 2020-21 is erroneous and prejudicial to the interest of Revenue. Ld. AO erred in allowing the deduction u/s.80P(2)(d) of the Act at Rs.56,07,237/- for the interest income earned on investments with cooperative banks. 8. This issue is no longer res integra by virtue of catena of decisions taking consistent view that interest income earned from deposits with Cooperative Banks is eligible for deduction u/s.80P(2)(d) of the Act. Recently, this Bench in the case of Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal Vs. ITO in ITA No.313/PUN/2025, order dated 07.05.2025 has allowed the deduction claimed by the assessee u/s.80P(2)(d) of the Act observing as under : “5. We have heard the rival submissions and perused the record placed before us. There is no dispute to the fact that assessee has earned interest income of Rs.1,02,95,103/- from deposits/investments with Cooperative Banks. This fact has been accepted by the Assessing Officer in the assessment order also. Admittedly, assessee has not filed the requisite details before ld.CIT(A). We however considering the fact that the issue Printed from counselvise.com ITA No.865/PUN/2025 Lohagaon Nagri Sahakari Patsanstha Maryadit 4 regarding allowability of deduction u/s.80P(2)(d) of the Act for the interest earned from Cooperative Banks is no longer res integra as the very same issue has been decided by this Tribunal in catena of decisions and in assesse’s own case for A.Y. 2020-21 holding that the assessee is eligible for deduction u/s.80P(2)(d) of the Act as the Cooperative Banks are basically Cooperative Societies. For the sake of brevity, the finding given in ITA No.2471/PUN/2024 is reproduced below: “7. We have heard both the sides and perused the record placed before us. In the instant case, the Assessing Officer disallowed the interest income of Rs.1,63,98,998/- earned out of the Fixed deposits/Investments made with Cooperative Banks treating the same as Income from Other Source. Ld.CIT(A) dismissed the appeal in limine without discussing anything on merits of the issues and on the ground that the assessee has not provided plausible explanation for admission of additional evidences. 8. 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. we 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. We 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 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. 9. Respectfully following the above referred decisions taking consistent view along with considering the facts of the case, where the assessee made investment with the Cooperative Banks we hold that the assessee is eligible for deduction u/s.80P(2)(d) of the Act for the interest income earned from Cooperative Banks at Rs.1,63,98,998/-. Findings of the ld. CIT(A) is set-aside and the Assessing Officer is directed to allow the claim made by the assessee. Effective grounds of appeal raised by the assessee are allowed.” Printed from counselvise.com ITA No.865/PUN/2025 Lohagaon Nagri Sahakari Patsanstha Maryadit 5 6. Respectfully following the same, we hold that deduction of Rs.1,02,95,103/- u/s.80P(2)(d) of the Act claimed by the assessee on the interest earned from deposits/Investments with Cooperative Banks deserves to be allowed. Relevant finding of ld.CIT(A) on merits is set aside and grounds of appeal No.5 to 8 raised by the assessee are allowed.” 9. Since the sole issue raised by ld.PCIT in the order u/s.263 of the Act stands already examined by the ld. Assessing Officer in light of settled judicial precedents where the claim of interest earned from investments with cooperative banks have been allowed, we are of the considered view that ld.PCIT erred in invoking section 263 of the Act. We therefore quash the impugned order and restore the assessment order dated 23.09.2022 passed by ld. Assessing Officer. 10. In the result, appeal of the assessee is allowed. Order pronounced on this 25th day of August, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 25th August, 2025. Satish 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, “A” ब\u0014च, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "