MAHATMA PHULE NAGARI SAHAKARI PATSANSTHA MARYADIT,AHILYANAGAR V. ITO WARD-1, AHILYANAGAR

ITA 321/PUN/2025

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The case involves Mahatma Phule Nagari Sahakari Patsanstha Maryadit, a cooperative credit society, which appealed against the order of the CIT(A)/NFAC for the assessment year 2020-21. The society had claimed a deduction of Rs. 82,64,267 under section 80P(2)(a)(i) of the IT Act, which was disallowed by the Assessing Officer and upheld by the CIT(A). The main contention was whether the interest income earned from cooperative banks was deductible under section 80P(2)(d) despite the exclusion of cooperative banks from section 80P(4). The Tribunal, referencing various decisions from the Jurisdictional Tribunal, ruled in favor of the assessee, stating that the interest income attributable to its business and from investments in other cooperative banks is deductible under section 80P.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775882 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Appeal Filed On: 06-02-2025
• Other Referred Cases: Rena Sahakari Shakhar Karkhana Ltd., ITA No.1249/PUN/2018, Sharad Nagari Sahakari Patsanstha Maryadit vs. ITO, ITA No.706/PUN/2022, Sonai Gramin Bigarsheti Sahakari Patsanstha Maryadit vs. DCIT, ITA No.638/PUN/2022, Pragati Gramin Bigarsheti Sahakari Patsanstha Maryadit vs. PCIT, ITA No.303/PUN/2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P. MURKUNDE
• Assessee Lawyers: PRASAD S. BHANDARI
• 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.321/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year : 2020-21 Mahatma Phule Nagari Sahakari Patsanstha Maryadit, At Post Bhingar, Nagar – Pathardi Road, Dist. Ahilyanagar- 414002. PAN : AAAAM3703B Vs. ITO, Ward-1, Ahilyanagar. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 20.09.2024 passed by Ld. CIT(A)/NFAC for the assessment year 2020-21. 2. There is delay of 79 days in filing of the present appeal. We are satisfied with the reasons mentioned in the affidavit for condonation that the applicant was prevented by sufficient cause for not filing the appeal within the prescribed time limit. After haring Assessee by : Shri Prasad S. Bhandari Revenue by : Shri Ramnath P. Murkunde Date of hearing : 05.08.2025 Date of pronouncement : 12.09.2025 Printed from counselvise.com ITA No.321/PUN/2025 2 Ld. DR, we condone the delay of 79 days and proceed to adjudicate the appeal. 3. The appellant has raised the following grounds of appeal :- “1. On the facts and in the prevailing circumstances of the case and in Law, Respected CIT(A)-NFAC erred confirming the addition made by the Ld. Assessing Officer at Rs.82,64,267/- without appreciating the fact that the assessee co-operative society is eligible to claim deduction under section 80P of the Act. Hence, the addition made of Rs. 82,64,267/- may please be deleted. 2. On the facts and in the prevailing circumstances of the case and in Law. Respected CIT(A)-NFAC erred confirming the addition made by the Ld. Assessing Officer at Rs. 82,64,267/- without appreciating the submission made by the assessee supported by the covered case laws of Hon'ble Pune ITAT. Hence, the addition made of Rs. 82,64,267/- may please be deleted. 3. Without prejudice to the above and on the facts and in the prevailing circumstances of the case and in Law. Respected CIT(A)-NFAC erred in not allowing deduction u/s 80P(2)(d) of the ITA, 1961. While arriving at the above conclusion, the Resp. CIT(A) held that interest income from Co-operative Bank is not covered in this section. Hence, the addition made of Rs.82,64,267/- may please be deleted. 4. The Appellate craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of the appeal, if deemed necessary at the time of hearing of the appeal.” 4. Facts of the case, in brief, are that the assessee is a cooperative credit society engaged in the business of providing credit facilities to its members & also accepting deposits from them. The assessee has filed its return of income on 15.02.2021 declaring Nil income after claiming deduction of Rs.82,64,267/- u/s 80P(2)(a)(i) of the IT Act. The case was selected for complete scrutiny. After considering the reply of the assessee, the Assessing Officer completed the assessment u/s 143(3) r.w.s. 144B of the IT Act by Printed from counselvise.com ITA No.321/PUN/2025 3 determining total income of Rs.82,64,270/- as against the income returned by the assessee at Rs.Nil. The above assessed income includes addition of Rs.82,64,267/- on account of disallowance of deduction u/s 80P of the IT Act. 5. After considering the reply of the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee by observing that the cooperative banks are not entitled to claim deduction u/s 80P(2)(d) of the IT Act since section 80P(4) excludes cooperative banks, & therefore the interest income earned by the assessee credit cooperative society from cooperative banks is also not deductible u/s 80P(2)(d) of the IT Act. 6. It is this above order against which the assessee is in appeal before this Tribunal. 7. Ld. AR appearing from side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR submitted before us that Ld. CIT(A)/NFAC erred in not following various decisions passed by coordinate bench of this Tribunal which were relied on by the assessee. Namely, Rena Sahakari Shakhar Karkhana Ltd., ITA No.1249/PUN/2018 order dated 07.01.2022, Sharad Nagari Sahakari Patsanstha Maryadit vs. ITO, ITA No.706/PUN/2022 order dated 07.11.2022, Sonai Gramin Bigarsheti Sahakari Patsanstha Maryadit vs. DCIT, ITA Printed from counselvise.com ITA No.321/PUN/2025 4 No.638/PUN/2022 order dated 0911.2022, Pragati Gramin Bigarsheti Sahakari Patsanstha Maryadit vs. PCIT, ITA No.303/PUN/2022 order dated 20.11.2022. Accordingly, Ld. AR submitted before us that the issue is no more res integra in the light of above and various other decisions passed by the Jurisdictional Tribunal and further requested before the Bench to set-aside the order passed by Ld. CIT(A)/NFAC and also requested to allow the claim made by the assessee u/s 80P of the IT Act. 8. Ld. DR appearing from side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same. 9. We have heard Ld. Counsels from both the sides and perused the material available on record. In this regard, we find that Ld. CIT(A)/NFAC has held that in the light of section 80P(4) of the IT Act, cooperative banks are not entitled to claim deduction u/s 80P of the IT Act and therefore the interest earned by the assessee from cooperative banks is also not allowable u/s 80P(2)(d) of the IT Act. In this regard, we find that it is true that cooperative banks are admittedly not entitled to claim deduction u/s 80P(2)(a)(i) of the IT Act, however in the light of various decisions passed by Jurisdictional Tribunal (some of the decisions cited above supra), the assessee being a credit cooperative society engaged in the Printed from counselvise.com ITA No.321/PUN/2025 5 business of providing credit facilities therefore the interest income which is attributable to its business is deductible u/s 80P(2)(a)(i) of the IT Act and also the interest income earned on its investments made with other cooperative banks is also deductible u/s 80P(2)(d) of the IT Act, since cooperative banks are also cooperative society. Accordingly, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to allow the claim made by the assessee u/s 80P of the IT Act. Thus, the grounds of appeal raised by the assessee are allowed. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 12th day of September, 2025. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 12th September, 2025. 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 // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "