MAHARSHI KARVE STREE SHIKSHAN SANSTHAS EMPLOYEES COOP SOCIETY LTD,PUNE V. ITO EASSSESSMENT CENTER, DELHI

ITA 668/PUN/2025

AI Insights

The case involves Maharshi Karve Stree Shikshan Sansthas Employees Coop Society Ltd., a credit cooperative society, which appealed against the order of the CIT(A)/NFAC for the assessment year 2018-19. The society had claimed a deduction under Section 80P(2)(a)(i) of the IT Act, which was disallowed by the Assessing Officer based on the judgment in the case of Totgars Cooperative Sale Society Ltd. The CIT(A) dismissed the appeal due to lack of supporting documents from the assessee. The Tribunal found that the CIT(A) had not adequately considered the legal merits and precedents applicable to the case, leading to the decision to remand the matter back to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826750 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 06-03-2025
• Other Referred Cases: Totgars Cooperative Sale Society Ltd. v. ITO, The Mavilayi Service Co-operative Bank Ltd. v. CIT, Annasaheb Patil Mathadi Kamgar Sahkari Pathpedhi Ltd. v. CIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARAT ANDHALE VIRTUAL
• Assessee Lawyers: ANAND KHANDEWALE
• Keywords: Condonation of delay; Principle of natural justice
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.668/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year : 2018-19 Maharshi Karve Stree Shikshan Sansthas Employees Coop Society Ltd., 1, MKSS Campus, Karvenagar- 411052. PAN : AAAAM4892K Vs. Income Tax Department, National e-Assessment Centre, Delhi. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 12.12.2024 passed by Ld. CIT(A)/NFAC for the assessment year 2018-19. 2. There is delay in filing of the present appeal. We are satisfied with the reasons mentioned in the application for condonation of delay duly supported by an affidavit that the applicant was Assessee by : Shri Anand Khandewale Revenue by : Shri Bharat Andhale (Virtual) Date of hearing : 03.12.2025 Date of pronouncement : 05.01.2026 Printed from counselvise.com ITA No.668/PUN/2025 2 prevented by sufficient cause for not filing the appeal within the prescribed time limit. After hearing Ld. DR, we condone the delay and proceed to adjudicate the appeal. 3. The appellant has raised the following revised grounds of appeal :- “Ground 1: Violation of Procedural Justice and Natural Justice. The Learned Commissioner of Income-tax (Appeals) erred in dismissing the appeal without adhering to the fundamental principles of procedural and natural justice.  Failure to Call for Documents: The Commissioner (Appeals) did not request specific documents during the appellate proceedings, thereby restricting the appellant's ability to substantiate its claims. The notices issued were identical and the annexure meant to list required documents was blank. The appeal was dismissed for the lack of documents that were never demanded.  Denial of Personal Hearing: The appellant was not given the opportunity for a personal hearing through a virtual conference, which is a recognized mode of hearing in faceless proceedings. The denial of a personal hearing is a violation of natural justice and procedural fairness, as established in judicial pronouncements.  Failure to Consider Previous Assessment: The Commissioner (Appeals) failed to consider the assessment order for AY 2017- 18, where the assessee's income was accepted without any addition and there was no change in facts or claims. Ground 2: Non-Application of Mind on Merits. The Commissioner (Appeals) erred in not considering the legal merits of the case and made a decision without a proper application of mind.  Ignoring Legal Submissions: The detailed legal submissions made by the appellant regarding the inapplicability of Section 80P(4) to cooperative credit societies were ignored.  Disregarding Binding Precedents: The Commissioner (Appeals)'s order overlooked the binding precedent set by the Supreme Court in The Mavilayi Service Co-operative Bank Ltd. Printed from counselvise.com ITA No.668/PUN/2025 3 v. CIT and other judicial pronouncements cited in the written submissions.  Incorrect Reliance on Totgors' Case: The order wrongly relied on the decision in The Totgors' Cooperative Sale Society Ltd. v. ITO. The appellant contends that the Torgars case is not applicable as its facts are different: it involved a cooperative sale society investing surplus funds, whereas the appellant is a cooperative credit society with operational funds. Ground 3: Error in Demand Calculation. The Assessing Officer made a clear error in calculating the demand amount. The tax was calculated on a total income of Rs.97,51,935/- instead of the assessed income of Rs.43,35,622/-. The Commissioner (Appeals)'s order is silent on this issue, even though it was raised in the first appeal.” 4. Facts of the case, in brief, are that the assessee is a credit co- operative society duly registered under the Maharashtra Cooperative Societies Act engaged in the activity of providing credit facilities to its members and also accepting deposits from them. The return of income was furnished on 31.10.2018 by declaring income of Rs.Nil after claiming deduction u/s 80P(2)(a)(i) of the IT Act. The return was selected for scrutiny and after considering the submissions of the assessee, the Assessing Officer by relying on the judgement passed in the case of Totgars Cooperative Sale Society Ltd., [2010] 322 ITR 283 (SC) completed the assessment proceedings u/s 143(3) of the IT Act and vide order dated 12.04.2021 determined total income at Rs.43,35,622/- as against the Nil income returned by the Printed from counselvise.com ITA No.668/PUN/2025 4 assessee. The above assessed income includes addition of Rs.43,35,622/- on account of disallowance of deduction u/s 80P(2)(a)(i) of the IT Act. 5. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the written submission furnished by the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee by observing as under :- “4.4 During the course of appellate proceedings, the appellant has not submitted any document for verification except above written submission. The appellant has not submitted the copy of appellant’s bylaws, financial statements for assessment year 2018-19. Copy of bank accounts wherein the interest has been received. The eligibility for deduction u/s 80P(2)(a)(i) and 80P(4) can be ascertain only if the financial statements or relevant documents are submitted. The appeal of the assessee is thus dismissed for want of verification. 5. As a result, the appeal of the assessee is dismissed.” 6. It is the above order against which the assessee is in appeal before this Tribunal. 7. We have heard Ld. counsels from both the sides and perused the material available on record. In this regard, we find that the Assessing Officer by relying on the judgement in the case of Totgars Cooperative Sale Society Ltd., [2010] 322 ITR 283 (SC) disallowed the claim of deduction u/s 80P(2)(a)(i) of the IT Act. Printed from counselvise.com ITA No.668/PUN/2025 5 The Ld. CIT(A)/NFAC also confirmed the order passed by the Assessing Officer since he was of the view that the eligibility for deduction u/s 80P(2)(a)(i) and 80P(4) cannot be ascertained since the assessee has not furnished the copy of bye-laws, financial statements and copy of bank accounts. 8. In this regard, we find that in a number of decisions passed by coordinate benches of this Tribunal it has been held that a primary credit cooperative society is entitled to claim deduction u/s 80P(2) of the IT Act on interest and dividend income earned from its investment with other cooperative banks which are also cooperative societies duly registered under Maharashtra State Cooperative Societies Act. In this regard, following decisions are relevant :- (i) Gurudatta Gramin Bigersheti, ITA No.502/PUN/2025 order dated 28-07-2025. (ii) Pune Jila Madhyawarti Sahkari Bank Sevakanchi Sahkari Patsanstha Maryadit, ITA No.1086/PUN/2025 order dated 23-06-2025. (iii) Sharadchandra Nagari Sahakari Patsanstha Maryadit, ITA No.1041/PUN/2025 order dated 04-06-2025. 9. We further find that the core issue of allowance of deduction u/s 80P(2) of the IT Act to a credit cooperative society was also Printed from counselvise.com ITA No.668/PUN/2025 6 decided by Hon’ble Jurisdictional Bombay High Court in the case of Annasaheb Patil Mathadi Kamgar Sahkari Pathpedhi Ltd. in ITANo.933/2017 order dated 14-10-2019 wherein deduction u/s 80P(2) of the IT Act was allowed to a primary credit cooperative society. Therefore, we are of the considered opinion that since the issue of allowance of deduction u/s 80P(2) in favour of primary credit cooperative society was already decided by Jurisdictional High Court as well as by this Tribunal in various cases, therefore, in the instant case it would be appropriate to set-aside the order passed by Ld. CIT(A)/NFAC. Accordingly, we set-aside the order passed by Ld. CIT(A)/NFAC and remand the matter back to the file of the Assessing Officer with a direction to pass assessment order afresh and as per fact and law in view of our above discussions in preceding paragraphs and also in the light of judgement and decisions cited supra after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by the Assessing Officer and to produce relevant documents, submissions and evidences, if any, in support of its claim of deduction u/s 80P(2) of the IT Act without taking any adjournment under any pretext, otherwise the Assessing Printed from counselvise.com ITA No.668/PUN/2025 7 Officer shall be at liberty to pass appropriate orders as per law. Thus, the grounds of appeal raised by the assessee are allowed for statistical purposes. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 05th day of January, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 05th January, 2026. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr.CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "