MUMBAI KAMGAR MADHYAWARTI GRAHAK SAHAKARI SANSTHA MARYADIT,MUMBAI V. ASST. COMMISSIONER OF INCOME TAX - CIRCLE 20(2), MUMBAI

MA 286/MUM/2024

AI Insights

The case involves Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit, the appellant, seeking a recall of the Tribunal's earlier order concerning the deduction under section 80P(2)(d) of the Income Tax Act for various assessment years. The Tribunal had previously remanded the issue back to the Assessing Officer for verification of additional evidence regarding the registration of the investee co-operative banks as co-operative societies. The appellant argued that the Tribunal's order contained mistakes apparent from the record, particularly in its interpretation and application of section 80P(2)(d) in relation to the Supreme Court's decisions. However, the Tribunal found that the issues raised were already addressed in the original order and that the decisions cited by the appellant did not support their claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397921 (ITAT-MUMBAI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Other Referred Cases: Ashok Tower Co Op Housing Society Ltd. [2024] 163taxmann.com 598 (Mumbai), Principal Commissioner of Income-tax, Hubballi v. Totagars Co-operative Sale Society [2017] 83 taxmann.com (Karnataka)/[2017] 395 ITR 611, State Bank of India v. CIT, Katlari Karyana Merchant Sahkari Sarafi Mandali Ltd. v. ACIT, PCIT v. Peroorkada Service Co-operative Bank Ltd. [2022] 442 ITR 141 (Kerala), Kerala State Co-operative Agricultural & Rural Development Bank Ltd. [2023] 154 taxmann.com 305 (SC), GSSS Credit Co-operative Society Ltd. v. ITO
• Laws Referred To: Income Tax Act, 1961, Maharashtra Co-operative Society Act, 1960, Banking Regulation Act, 1949
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIRABHADRA MAHAJAN
• Assessee Lawyers: V. SRIDHARAN; . AW; INVOKING SECTION P; RATIVE BANK IS NOT
• Keywords: Business income; Additional evidence; Principle of natural justice
• Section: 56

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) MA Nos. 286 to 289/MUM/2024 (Arising out of ITA Nos. 2885, 2884, 2883 & 2882/MUM/2024) Assessment Year: 2014-15, 2017-18, 2018-19 & 2020-21 Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit, 106A, Apna Bazar, Govindji Keni Road, Naigaum Dadar, Mumbai-400014. Vs. Asst. CIT Circle-20(2), Piramal Chambers Lalbaug, Mumbai-400012. PAN NO. AAAJM 0005 H Appellant Respondent Assessee by : Mr. V. Sridharan, Sr. Adv. a/w Mr. Dinesh Kukreja Revenue by : Mr. Virabhadra Mahajan, Sr. DR Date of Hearing : 16/05/2025 Date of pronouncement : 03/06/2025 ORDER PER OM PRAKASH KANT, AM By way of these Miscellaneous Applications, the assessee is seeking recall of the order of the Tribunal dated 30.08.2024 passed in ITA Nos. 2885, 2884, 2883 & 2882/Mum/2024 for assessment years 2014-15, 2017-18, 2018-19 & 2020-21 respectively. 2. The Ld. counsel for the assessee submitted that the issue of deduction u/s 80P(2)(d) of the Income Act’) has been remanded back to the file of the Assessing Officer in view application under Rule 29 of the ITAT Rules, admission of additional further verification and decide the issue in accordance with law. The Ld. counsel submitted that order of the Tribunal. The relevant part of the Misce Application is reproduced as under: Para No. Relevant extract of the findings of the Hon’ble Tribunal 7.3 7.3 Before us, the Ld. counsel for the assessee filed proof of registration of the investee co-operative banks as co operative societies along with an application under Rule 29 of the ITAT Rules, 1963 and submitted that matter may be restored to the file of th authorities for examining the registration of the investee co co-operative societies. Alternatively, the Ld. counsel for the assessee submitted that under the provisions of Maharashtra Co-operative Society Act all the Co operative banks are registered as co operative society and therefore relying on section 2(10) of the Act of Maharashtra Co-operative Society Act, 1960, therefore, the Co-operative Bank registered in Maharashtra are primarily co society and therefore, considering the additional evidences, the assessee is entitled for deduction u/s 80P(2)(d) of the Act. In this regard, the Ld. counsel for the assessee relied on the decision of the Co Tribunal in the case of Ashok Tower Co Op Housing Society Ltd. [2024] 163taxmann.com 598 (Mumbai Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 The Ld. counsel for the assessee submitted that the issue of deduction u/s 80P(2)(d) of the Income-tax Act, 1961 (in short ‘the Act’) has been remanded back to the file of the Assessing Officer in application under Rule 29 of the ITAT Rules, additional evidences filed by the assessee verification and decide the issue in accordance with law. The Ld. counsel submitted that certain mistakes occurred in the order of the Tribunal. The relevant part of the Misce Application is reproduced as under: Relevant extract of the findings of the Hon’ble Tribunal Submission of the Applicant qua the mistakes apparent from the record in the said findings Before us, the Ld. counsel for the assessee filed proof of registration of the operative banks as co- operative societies along with an application under Rule 29 of the ITAT Rules, 1963 and submitted that matter may be restored to the file of the lower authorities for examining the registration of the investee co-operative banks of the operative societies. Alternatively, the Ld. counsel for the assessee submitted that under the provisions of Maharashtra operative Society Act all the Co- ative banks are registered as co- operative society and therefore relying on section 2(10) of the Act of Maharashtra operative Society Act, 1960, therefore, operative Bank registered in Maharashtra are primarily co-operative society and therefore, even without considering the additional evidences, the assessee is entitled for deduction u/s 80P(2)(d) of the Act. In this regard, the Ld. counsel for the assessee relied on the decision of the Co-ordinate Bench of the Tribunal in the case of Ashok Tower “D” Co Op Housing Society Ltd. [2024] 163taxmann.com 598 (Mumbai - Trib.). It is most respectfully submitted that the counsel for the applicant never suggested that matter be restored to the file of lower authorities. Further, reliance was placed on the following decisions by the AO/CIT(A)/DR in the course of hearing and not by the Applicant: (i) Principal Commissioner of Income-tax, Hubballi v. Totagars Co-operative Sale Society [2017] 83 taxmann.com (Karnataka)/[2017] 395 ITR 611. (ii) State Bank of India v. CIT, (iii) Katlari Karyana Merchant Sahkari Sarafi Mandali Ltd. v. ACIT, Be that as it may, the Applicant endeavors to demonstrate that the impugned order contains a mistake apparent on record. Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 2 MA Nos. 286 to 289/MUM/2024 The Ld. counsel for the assessee submitted that the issue of tax Act, 1961 (in short ‘the Act’) has been remanded back to the file of the Assessing Officer in application under Rule 29 of the ITAT Rules, 1963 for filed by the assessee and for verification and decide the issue in accordance with law. occurred in the order of the Tribunal. The relevant part of the Miscellaneous Submission of the Applicant qua the mistakes apparent from the record in the said findings It is most respectfully submitted that the counsel for the applicant never suggested that matter be restored to the file of lower Further, reliance was placed on the following decisions by the AO/CIT(A)/DR in the course of hearing and not by the Applicant: Principal Commissioner of tax, Hubballi v. Totagars operative Sale Society [2017] 83 140 (Karnataka)/[2017] 395 ITR 611. State Bank of India v. CIT, ri Karyana Merchant Sahkari Sarafi Mandali Ltd. v. ACIT, Be that as it may, the Applicant endeavors to demonstrate that the impugned order contains a mistake record. The Ld. counsel for the assessee relied on the decision of the Division Bench of the Principal Commissioner of Income Hubballi v. Totagars Co Society [2017] 83 (Karnataka)/[2017] 395 ITR 611. The Ld. counsel also relied on the CIT v. Vegetable Products Ltd. [1973] 88 ITR 193 (SC), State Bank of India v. CIT, Katlari Karyana Merchant Sahkari Sarafi Mandali Ltd. v. ACIT, PCIT v. Peroorkada Service Co-operative Bank Ltd. [2022] 442 ITR 141 (Kerala). 8. ….. 8. We have heard rival submission of the parties and perused the relev material on record. The section 80P(2)(d) of the Act prescribe out of gross total income of co-operative society, deduction in respect of the whole of income by way of interest or dividend derived by the co operative society from its investment with any other co Hon’ble Supreme Court in the case of Totgars, Co-operative Sale Society Ltd. (supra) however held that for eligibility of deduction u/s 80P(2)(d) of the Act, the whole of the income referred to the business income and not income which is earned from surplus money deposited with co societies. Thus the interest income which is eligible under the head ‘profit and gains of the business’ of co only becomes eligible for deduction u/s 80P(2)(d) of the Act. Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 The Ld. counsel for the assessee relied on the decision of the Division Bench of the Principal Commissioner of Income-tax, Hubballi v. Totagars Co-operative Sale Society [2017] 83 taxmann.com 140 (Karnataka)/[2017] 395 ITR 611. The Ld. counsel also relied on the CIT v. Vegetable Products Ltd. [1973] 88 ITR 193 (SC), State Bank of India v. CIT, Katlari Karyana Merchant Sahkari Sarafi Mandali Ltd. v. ACIT, PCIT v. Peroorkada Service operative Bank Ltd. [2022] 442 ITR We have heard rival submission of the parties and perused the relevant material on record. The section 80P(2)(d) of the Act prescribe out of gross total operative society, deduction in respect of the whole of income by way of interest or dividend derived by the co- operative society from its investment with y other co-operative society. The Hon’ble Supreme Court in the case of operative Sale Society Ltd. (supra) however held that for eligibility of deduction u/s 80P(2)(d) of the Act, the whole of the income referred to the business income and not any interest income which is earned from surplus money deposited with co-operative societies. Thus the interest income which is eligible under the head ‘profit and gains of the business’ of co-operative society only becomes eligible for deduction u/s )(d) of the Act. The Supreme Court decision in case of Totgars Co- Ltd v ITO (2010) 322 ITR 283 (SC) is not applicable in the present case since it deals with applicability of Section 80P(2)(a)(i) of the Act. In the present case, in a are concerned with applicability of Section 80P (2)(d) of the Act and not Section 80P(2)(a)(i) of the Act. The said decision of the Supreme Court was also cited before the Co ordinate benches of the Mumbai Tribunal in appeal relating to Section 80P(2)(d) of the Act and the Tribunal has consistently distinguished it. The Applicant had cited the following decisions in the legal paper book filed in the course of hearing as well as written submissions filed after conclusion of the hearing which distinguish the decision of the Supreme the ground that it relates to Section 80P(2)(a)(i) of the Act and not Section 80P(2)(d) of the Act. One of the decisions is that in case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd v ITO [2018] 94 taxmann.com 15 (Mumbai) wherein Tribunal distinguished the applicability of the said decision of Totgars (SC) in the following words: “7. We have deliberated at length on the issue under consideration and are unable to persuade ourselves to Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 3 MA Nos. 286 to 289/MUM/2024 The Supreme Court decision in case -operative Sale Society Ltd v ITO (2010) 322 ITR 283 (SC) is not applicable in the present case since it deals with applicability of Section 80P(2)(a)(i) of the Act. In the present case, in all the 4 appeals we are concerned with applicability of Section 80P (2)(d) of the Act and not Section 80P(2)(a)(i) of the Act. The said decision of the Supreme Court was also cited before the Co- ordinate benches of the Mumbai Tribunal in appeal relating to 80P(2)(d) of the Act and the Tribunal has consistently distinguished it. The Applicant had cited the following decisions in the legal book filed in the course of hearing as well as written submissions filed after conclusion of which distinguish the decision of the Supreme Court on the ground that it relates to Section 80P(2)(a)(i) of the Act and not Section 80P(2)(d) of the Act. One of the decisions is that in case of Kaliandas Udyog Bhavan op Society Ltd v ITO ] 94 taxmann.com 15 wherein the Mumbai Tribunal distinguished the applicability of the said decision of Totgars (SC) in the following words: 7. We have deliberated at length on the issue under consideration and are unable to persuade ourselves to Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 be in agreement with the view taken by the lower authorities....... We are of the considered view that the reliance placed by the CIT (A) on the judgment of the Hon'ble Supreme Court in the case of Totgars Cooperative Sale Society Ltd. (supra) being disti on facts, thus, had wrongly been relied upon by him. The adjudication by the Hon'ble Court in the aforesaid case was in context of Sec. 80P(2)(a)(i), and on the entitlement of a co society towards deduction under Sec. 80P(2)(d income on the investments parked with a co-operative bank.\" So also the Madras High Court in case of Thorapadi Urban Co Credit Society Ltd v ITO [2024] 296 Taxman 250 (Madras) (cited during hearing and included in Legal paperbook) dist decision of Totgars following words when dealing with its applicability for Section 80P(2)(d) of the Act: \"11. The learned counsel for the respondent referred to the judgment of the Hon'ble Supreme Court rendered in Totgars Co Sale Society Ltd. (supra), wherein the issue came up for consideration as to whether the interest income received by a Co from its members by way of providing the credit facilities to its members is eligible for deduction or not. Ultimately the Hon'ble Surpeme Court found that under section 80P(2)(a)(i), the same is eligible for deduction. Therefore, the law laid down by the Hon'ble Supreme Court is not applicable for in the present case as the eligibility of deduction of interest has to be decided under section 80P(2)(d) and not under section 80P(2)(a)(i). The learned counsel has also relied upon other judgments which are not applicable Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 4 MA Nos. 286 to 289/MUM/2024 be in agreement with the view taken by the lower authorities....... We are of the considered view that the reliance placed by the CIT (A) on the judgment of the Hon'ble Supreme Court in the case of Totgars Cooperative Sale Society Ltd. (supra) being distinguishable on facts, thus, had wrongly been relied upon by him. The adjudication by the Hon'ble Apex Court in the aforesaid case was in context of Sec. 80P(2)(a)(i), and not on the entitlement of a co-operative society towards deduction under Sec. 80P(2)(d) on the interest income on the investments parked operative bank.\" So also the Madras High Court in case of Thorapadi Urban Co-op Society Ltd v ITO [2024] 296 Taxman 250 (Madras) (cited during hearing and included in Legal paperbook) distinguished the Totgars (SC) in the following words when dealing with its applicability for Section 80P(2)(d) \"11. The learned counsel for the respondent referred to the judgment of the Hon'ble Supreme Court rendered in Totgars Co-operative Sale Society Ltd. (supra), wherein the issue came up for consideration as to whether the interest income received by a Co-operative Bank from its members by way of providing the credit facilities to its members is eligible for deduction or mately the Hon'ble Surpeme Court found that under section 80P(2)(a)(i), the same is eligible for deduction. Therefore, the law laid down by the Hon'ble Supreme Court is not applicable for in the present case as the eligibility of deduction of to be decided under section 80P(2)(d) and not under section 80P(2)(a)(i). The learned has also relied upon other judgments which are not applicable 8. Further, the Hon'ble Supreme Court in the case of Kerala State Co Agricultural & Rural Ltd. [2023] 154 taxmann.com 305 (SC) held that if the co carrying out business of banking as defined u/s 5(b) of the Banking regulation Act, then only shall be barred for deduction u/s 80P(2)(d) of the Act, in view of prohibition u/s 80P(2)(4) of the Act, otherwise the co operative bank not falling Banking regulation Act, shall be considered as cooperative society eligible for deduction u/s 80P(2)(d) Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 for the present facts of the present case.\" Failure to consider the aforesaid binding precedent of t bench of the Tribunal cited in the course of hearing appreciate that the applicant is claiming deduction u/s 80P(2)(d) of the Act and not 80P(2)(a)(i) of the Act constitutes mistake apparent from record. Thus, it is most respe submitted that the finding of the Hon'ble Tribunal in para 8, that deduction u/s 80P(2)(d) will be available only for business income earned by the Applicant by relying on the Supreme Court decision in case of Totgars Co Society Ltd v ITO (2010) 283 (SC) is contrary to the decisions of the co-ordinate benches of the Tribunal and hence constitutes mistake apparent from record. Further, the Hon'ble Supreme Court in the case of Kerala State Co- Operative Agricultural & Rural Development Bank Ltd. [2023] 154 taxmann.com 305 (SC) held that if the co-operative bank is carrying out business of banking as defined u/s 5(b) of the Banking regulation Act, then only such co-operative bank shall be barred for deduction u/s the Act, in view of prohibition u/s 80P(2)(4) of the Act, otherwise the co- operative bank not falling u/s 5(b) of the Banking regulation Act, shall be considered as cooperative society eligible for deduction u/s 80P(2)(d) of the Act. It is most respectfull that the said decision of the Supreme Court is not applicable in the facts of the present case. In the said case, the dispute was whether the Kerala State Co Agricultural & Rural Development Bank Ltd is a co hence not eligible for claiming deduction u/s 80P of the Act in view of Section 80P(4) of the Act which bars co-operative banks from claiming deduction of the Act In the present case, admittedly Applicant is not a Co operative Bank. The Applicant into banking business. As stated in Para 3 of the impugned order itself the Applicant is engaged in wholesale trading of 'food grains' and 'grocery goods' and other 'consumer goods'. It is not even the case of the lower authorities that the applicant is a Co and hence not eligible for deduction u/s 80P of the Act in view of Section 80P(4) of Act. Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 5 MA Nos. 286 to 289/MUM/2024 present facts of the present Failure to consider the aforesaid binding precedent of the co-ordinate bench of the Tribunal cited in the course of hearing and failure to appreciate that the applicant is claiming deduction u/s 80P(2)(d) of the Act and not 80P(2)(a)(i) of the Act constitutes mistake apparent Thus, it is most respectfully submitted that the finding of the Hon'ble Tribunal in para 8, that deduction u/s 80P(2)(d) will be available only for business income earned by the Applicant by relying on the Supreme Court decision in case of Totgars Co-operative Sale v ITO (2010) 322 ITR 283 (SC) is contrary to the decisions ordinate benches of the Tribunal and hence constitutes mistake apparent from record. It is most respectfully submitted that the said decision of the Supreme Court is not applicable in the facts of the present case. In the said case, the dispute was whether the Kerala State Co-operative Agricultural & Rural Development Bank Ltd is a co-operative bank and ot eligible for claiming deduction u/s 80P of the Act in view of Section 80P(4) of the Act which operative banks from eduction u/s 80P of the In the present case, admittedly Applicant is not a Co- operative Bank. The Applicant is not into banking business. As stated in Para 3 of the impugned order itself the Applicant is engaged in wholesale trading of 'food grains' and 'grocery goods' and other 'consumer goods'. It is not even the case of the lower authorities that t is a Co-operative Bank and hence not eligible for deduction u/s 80P of the Act in view of Section 8.1 8.1 In view of the above for eligibility of deduction u/s 80P(2)(d) of the Act, the two conditions are required to be satisfied, firstly, whether the intere dividend income claimed by the assessee for deduction is part of the business income or income from other sources. Secondly, has to verify whether the interest received from co-operative banks are registered under section 5(b) of Banking Regulation Act or not. Before us, the Ld. counsel of the assessee has filed an application under Rule 29 of ITAT Rules, 1963 along with the copy of the registration of the said co-operative banks, therefore, we feel it appropriate to resto the file of the Assessing Officer for verification and decide in accordance with Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 Thus, the reliance by this Hon'ble Tribunal on the decision of the Supreme Court in case of Kerala State Co- Operative Agricultural & Rural Development Bank Ltd. [2023] 154 taxmann.com 305 (SC) constitutes mistake apparent from record. 8.1 In view of the above for eligibility of 80P(2)(d) of the Act, the two conditions are required to be satisfied, firstly, whether the interest income or dividend income claimed by the assessee for deduction is part of the business income or income from other Secondly, the Assessing Officer has to verify whether the interest received operative banks are registered 5(b) of Banking Regulation Act or not. Before us, the Ld. counsel of the assessee has filed an application under Rule 29 of ITAT Rules, 1963 along with the copy of the registration of the operative banks, therefore, we feel it appropriate to restore this issue back to the Assessing Officer for verification and decide in with law. As discussed above, both the Supreme Court decisions relied on by the ITAT are not applicable in the present case. Thus, the conclusion arrived at Thus, it is most respectfully submitted that the direction of the Hon'ble Tribunal to the Assessing Officer to verify whether the interest income earned by the Applicant from Co-operative Banks is business income or income from other sources is mistake apparent from record. There is no reference to business income at all in Section 80P(2)(d) of the Act. So also the direction of the Tribunal to the Assessing officer to verify whether the Co registered under Section 5( Banking Regulation Act, 1949 is a mistake apparent from record because what the Assessing officer has to verify is whether the Co operative Banks from which the Applicant has received interest are registered as Co or not. Section 80P(2)(d) of the Act requires that to claim deduction, the assessee must have received interest income from another Co operative Society. The CIT(A) in Para 5.4. of his order had sustained addition u/s 80P(2)(d) of the Act only on the ground that Coope Banks from which Applicant has received interest are not as Co-operative Societies. The Applicant before proved that by statute all the Co operative Banks are Co Societies and in any case the Applicant even produced Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 6 MA Nos. 286 to 289/MUM/2024 Thus, the reliance by this Hon'ble Tribunal on the decision of the Supreme Court in case of Kerala Operative Agricultural & evelopment Bank Ltd. [2023] 154 taxmann.com 305 (SC) mistake apparent from As discussed above, both the Supreme Court decisions relied on by the ITAT are not applicable in the present case. Thus, the conclusion arrived at by the Tribunal that Thus, it is most respectfully submitted that the direction of the Hon'ble Tribunal to the Assessing Officer to verify whether the interest income earned by the Applicant operative Banks is business income or income from ources is mistake apparent from record. There is no reference to business income at all in Section 80P(2)(d) of the Act. So also the direction of the Tribunal to the Assessing officer to verify whether the Co-operative Banks are registered under Section 5(b) of the Banking Regulation Act, 1949 is a mistake apparent from record what the Assessing officer has to verify is whether the Co- operative Banks from which the Applicant has received interest are registered as Co-operative societies ion 80P(2)(d) of the Act requires that to claim deduction, the assessee must have received interest income from another Co- operative Society. The CIT(A) in Para 5.4. of his order had sustained addition u/s 80P(2)(d) of the Act only on the ground that Cooperative Banks from which Applicant has received interest are not registered operative Societies. The Applicant before the Tribunal proved that by statute all the Co- operative Banks are Co-operative Societies and in any case the Applicant even produced additional 2.1 On perusal of the above instances of out by the Ld. counsel for the assessee, we find that the main allegation of the assessee Supreme Court have not been considered. 3. We have heard rival s the relevant materials on record deduction u/s 80P(2)(d) of the Act has been adjudicated by the Tribunal after considering the decision of the Hon’ble Supreme Court in the case of Totgar Co Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 evidence demonstrating that all the Co-operative Banks from which the Applicant had received interest in all the impugned AYs are indeed registered as Co under the provisions of the Maharashtra Cooperative Societies Act. 1960 and Multi operative Societies Act, 2002. The Tribunal has without even discussing these issues given direction to the Assessing Officer to verify whether Co are registered under Section 5(b) of the Banking Regulation Act, 1949 which is wholly irrelevant for deciding availability of deduction u/s 80P(2)(d) of the Act in the hands of the Applicant. In any case, Section 5(b) of the Banking Regulation Act, 1949 provides for definition of \"banking\" and does not deal with registration of Co-operative Banks. So direction of the Tribunal to the Assessing Officer to verify whether Co operative Banks are registered under Section Regulation Act, 1949 is misplaced and constitutes mistake apparent from record. n perusal of the above instances of alleged mistake e Ld. counsel for the assessee, we find that the main of the assessee is that certain decisions of the Hon’ble Supreme Court have not been considered. We have heard rival submissions of the parties and perused the relevant materials on record. The issue in dispute of the deduction u/s 80P(2)(d) of the Act has been adjudicated by the Tribunal after considering the decision of the Hon’ble Supreme Court in the case of Totgar Co-operative Sale Society Ltd. v. ITO Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 7 MA Nos. 286 to 289/MUM/2024 evidence demonstrating that all the operative Banks from which the Applicant had received interest in all the impugned AYs are indeed registered as Co-operative Society under the provisions of the Maharashtra Cooperative Societies and Multi-State Co- operative Societies Act, 2002. The Tribunal has without even discussing these issues given direction to the Assessing Officer to verify whether Co-operative Banks are registered under Section 5(b) of the Banking Regulation Act, 1949 h is wholly irrelevant for deciding availability of deduction u/s 80P(2)(d) of the Act in the hands of the Applicant. In any case, Section 5(b) of the Banking Regulation Act, 1949 provides for definition of \"banking\" and does not deal with registration operative Banks. So direction of the Tribunal to the Assessing Officer to verify whether Co- operative Banks are registered under Section 5(b) of the Banking Regulation Act, 1949 is misplaced and constitutes mistake apparent mistake pointed e Ld. counsel for the assessee, we find that the main that certain decisions of the Hon’ble ubmissions of the parties and perused . The issue in dispute of the deduction u/s 80P(2)(d) of the Act has been adjudicated by the Tribunal after considering the decision of the Hon’ble Supreme operative Sale Society Ltd. v. ITO (2010) 322 ITR 283 (SC) and decision of the Hon’ble in the case of Kerala State Co Development Bank Ltd. [2023] 154 taxmann.com 305 (SC) have been further discussed in ordinate Bench in the case of Ltd. v. ITO in ITA No. considering the above decision of the Tribunal application of the assessee under Rule 29 fo evidence, the Tribunal restored the matter to the file of the Assessing Officer for verification of the contents of the additional evidence and with law. The relevant f under: “8. We have heard rival submission of the parties and perused the relevant material on record. The section 80P(2)(d) of the Act prescribe out of gross total income of co of income by way of interest or dividend derived by the co from its investment with any other co Supreme Court in the case of Totgars, Co however held that f whole of the income referred to the business income and not any interest income which is earned from surplus money deposited with co societies. Thus the interest income which is eligible u and gains of the business’ of co deduction u/s 80P(2)(d) of the Act. Further, the Hon’ble Supreme Court in the case of Kerala State Co Bank Ltd. [2023] 154 taxmann.com 305 (SC) held that if the co bank is carrying out business of banking as defined u/s 5(b) of the Banking regulation Act, then only such co deduction u/s 80P(2)(d) of the Act, in view of proh Act, otherwise the co regulation Act, shall be considered as co deduction u/s 80P(2)(d) of the Act. The Co the case of GSSS Credit Co Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 (2010) 322 ITR 283 (SC) and decision of the Hon’ble Kerala State Co-operative Agricultural & Rural Development Bank Ltd. [2023] 154 taxmann.com 305 (SC) discussed in the related decision of the Co ordinate Bench in the case of GSSS Credit Co-operative Society Ltd. v. ITO in ITA No. 248, 249 & 250/Bang/2024 considering the above decision of the Tribunal and application of the assessee under Rule 29 for admitting additional evidence, the Tribunal following the principle of natural justice, restored the matter to the file of the Assessing Officer for verification of the contents of the additional evidence and decide in accordance . The relevant finding of the Tribunal is reproduced as We have heard rival submission of the parties and perused the relevant material on record. The section 80P(2)(d) of the Act prescribe out of gross total income of co-operative society, deduction in respect of income by way of interest or dividend derived by the co-operative society from its investment with any other co-operative society. The Hon’ble Supreme Court in the case of Totgars, Co-operative Sale Society Ltd. (supra) however held that for eligibility of deduction u/s 80P(2)(d) of the Act, the whole of the income referred to the business income and not any interest income which is earned from surplus money deposited with co societies. Thus the interest income which is eligible under the head ‘profit and gains of the business’ of co-operative society only becomes eligible for deduction u/s 80P(2)(d) of the Act. Further, the Hon’ble Supreme Court in the case of Kerala State Co-Operative Agricultural & Rural Development 023] 154 taxmann.com 305 (SC) held that if the co bank is carrying out business of banking as defined u/s 5(b) of the Banking regulation Act, then only such co-operative bank shall be barred for deduction u/s 80P(2)(d) of the Act, in view of prohibition u/s 80P(2)(4) of the Act, otherwise the co-operative bank not falling u/s 5(b) of the Banking regulation Act, shall be considered as co-operative society eligible for deduction u/s 80P(2)(d) of the Act. The Co-ordinate Bench of the Tribunal in case of GSSS Credit Co-operative Society Ltd. v. ITO in ITA No. 248, 249 Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 8 MA Nos. 286 to 289/MUM/2024 (2010) 322 ITR 283 (SC) and decision of the Hon’ble Supreme Court operative Agricultural & Rural Development Bank Ltd. [2023] 154 taxmann.com 305 (SC), which the related decision of the Co- operative Society 248, 249 & 250/Bang/2024. After and in view of r admitting additional following the principle of natural justice, restored the matter to the file of the Assessing Officer for verification decide in accordance inding of the Tribunal is reproduced as We have heard rival submission of the parties and perused the relevant material on record. The section 80P(2)(d) of the Act prescribe out of operative society, deduction in respect of the whole operative society operative society. The Hon’ble operative Sale Society Ltd. (supra) or eligibility of deduction u/s 80P(2)(d) of the Act, the whole of the income referred to the business income and not any interest income which is earned from surplus money deposited with co-operative nder the head ‘profit operative society only becomes eligible for deduction u/s 80P(2)(d) of the Act. Further, the Hon’ble Supreme Court in Operative Agricultural & Rural Development 023] 154 taxmann.com 305 (SC) held that if the co-operative bank is carrying out business of banking as defined u/s 5(b) of the Banking operative bank shall be barred for ibition u/s 80P(2)(4) of the operative bank not falling u/s 5(b) of the Banking operative society eligible for ordinate Bench of the Tribunal in operative Society Ltd. v. ITO in ITA No. 248, 249 & 250/Bang/2024 held similar finding. For ready reference, said finding is reproduced as under: “12. Regarding the interest income earned from the Co this regard, we are of the opinion that we have to see whether the Co operative Bank is carrying on the business of bank as provided ITA No.248, 249 & 250/Bang/2024 under the Bank Regu words, if the Co then in our considered view, the deduction on account of interest on the investment made in such Co reason that such Co Hon'ble Supreme Court in the case of Agricultural and Rural Bank Ltd., Vs. ACIT 305, wherein it agricultural and rural development bank and governed under the Co-operative Societies Act, 1969 the assessee was to provide credit facilities to its members. Accordingly, the assessee claimed a deduction under the return of income. But the AO disallowed the same on the reas that the assessee was a cooperative bank and, therefore, it was hit by the provisions of section 80P(4) claiming deduction under reached the Hon'ble Apex Court where it was held that banking is defined under section 5(b) for the purpose of lending or investment, deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise. Therefore, a banking company must transact banking business with the publi business of banking as defined in operative bank within the meaning of and would be entitled to the benefit of deduction under the Act. Since, the assessee society was an apex co within the meani Banks Act, 1984 financial accommodation to its members ITA No.248, 249 & 250/Bang/2024 who members of the public, it was not a co of section 5(b) read with the deduction under Section 80P could not be denied to the assessee by invoking Section 80P(4) 13. In view of the above, we hold that if the Co functioning the business of banking as defined Regulation Act, then such Co operative Society for the purpose of the deduct the Act. Therefore, in our considered view, such interest income will be eligible for deduction 14. However, if the Co defined u/s 5(b) of the Bank Regulation Act, then the assessee shall not be entitled for the deduction with respect to the interest earned on the Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 & 250/Bang/2024 held similar finding. For ready reference, said finding is reproduced as under: 12. Regarding the interest income earned from the Co-operative Bank, in this regard, we are of the opinion that we have to see whether the Co operative Bank is carrying on the business of bank as provided ITA No.248, 249 & 250/Bang/2024 under the Bank Regulation Act. In simple words, if the Co-operative Bank is not carrying out any banking business, then in our considered view, the deduction on account of interest on the investment made in such Co-operative Bank cannot be denied for the reason that such Co- operative Bank is not a bank as per the judgment of Hon'ble Supreme Court in the case of Kerala State Co Agricultural and Rural Bank Ltd., Vs. ACIT reported in 154 taxmann.com 305, wherein it was observed that the assessee was a state agricultural and rural development bank and governed under the operative Societies Act, 1969 as a co-operative society. The activity of see was to provide credit facilities to its members. Accordingly, the assessee claimed a deduction under Section 80P(2)(a)(i) the return of income. But the AO disallowed the same on the reas that the assessee was a cooperative bank and, therefore, it was hit by the section 80P(4) of the Act and thus would not be eligible for claiming deduction under section 80P(2) of the Act. Finally, the issue reached the Hon'ble Apex Court where it was held that banking is defined section 5(b) of the Banking Regulation Act, 1949 to mean accepting, for the purpose of lending or investment, deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise. Therefore, a banking company must transact banking business with the public. If a co-operative society would not transact the business of banking as defined in Section 5(b), it would not be a co operative bank within the meaning of section 56 of Banking Regulation Act and would be entitled to the benefit of deduction under Section 80P(2) the Act. Since, the assessee society was an apex co- operative society within the meaning of Kerala State Co-Operative Agricultural Development Banks Act, 1984 (State Act, 1984) whose primary object was to provide financial accommodation to its members ITA No.248, 249 & 250/Bang/2024 who were all other co-operative societies and not members of the public, it was not a co-operative bank within the meaning read with Section 56 of Banking Regulation Act. Accordingly, the deduction under Section 80P could not be denied to the assessee by Section 80P(4) of the Act. 13. In view of the above, we hold that if the Co-operative Bank is not functioning the business of banking as defined u/s 5(b) Regulation Act, then such Co-operative Bank shall be considered as Co operative Society for the purpose of the deduction claimed u/s 80P(2)(d) the Act. Therefore, in our considered view, such interest income will be eligible for deduction u/s 80P(2)(d) of the Act. 14. However, if the Co-operative Bank is carrying out banking activities as defined u/s 5(b) of the Bank Regulation Act, then the assessee shall not be entitled for the deduction with respect to the interest earned on the Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 9 MA Nos. 286 to 289/MUM/2024 & 250/Bang/2024 held similar finding. For ready reference, said finding is operative Bank, in this regard, we are of the opinion that we have to see whether the Co- operative Bank is carrying on the business of bank as provided ITA lation Act. In simple operative Bank is not carrying out any banking business, then in our considered view, the deduction on account of interest on the operative Bank cannot be denied for the operative Bank is not a bank as per the judgment of Kerala State Co-operative reported in 154 taxmann.com was observed that the assessee was a state-level agricultural and rural development bank and governed under the Kerala operative society. The activity of see was to provide credit facilities to its members. Accordingly, Section 80P(2)(a)(i) of the Act in the return of income. But the AO disallowed the same on the reasoning that the assessee was a cooperative bank and, therefore, it was hit by the of the Act and thus would not be eligible for of the Act. Finally, the issue reached the Hon'ble Apex Court where it was held that banking is defined o mean accepting, for the purpose of lending or investment, deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise. Therefore, a banking company must transact banking operative society would not transact the , it would not be a co- of Banking Regulation Act Section 80P(2) of operative society Operative Agricultural Development ) whose primary object was to provide financial accommodation to its members ITA No.248, 249 & operative societies and not operative bank within the meaning of Banking Regulation Act. Accordingly, the deduction under Section 80P could not be denied to the assessee by rative Bank is not u/s 5(b) of Banking operative Bank shall be considered as Co- u/s 80P(2)(d) of the Act. Therefore, in our considered view, such interest income will be operative Bank is carrying out banking activities as defined u/s 5(b) of the Bank Regulation Act, then the assessee shall not be entitled for the deduction with respect to the interest earned on the investments made with such bank un the Act. However, corresponding interest cost incurred by the assessee shall be eligible to be adjusted against such interest income at par with nationalized bank. 8.1 In view of the above for eligibility of deduction u/s 80P(2)(d) of the Act, the two conditions are required to be satisfied , firstly, whether the interest income or dividend income claimed by the assessee for deduction is part of the business income or i Assessing Officer has to verify whether the interest received from co operative banks are registered under section 5(b) of Banking Regulation Act or not . Before us, the Ld. counsel of the assessee has filed an appl under Rule 29 of ITAT Rules, 1963 along with the copy of the registration of the said co-operative banks, therefore, we feel it appropriate to restore this issue back to the file of the Assessing Officer for verification and decide in accordance with law. 8.2 As far as, the grounds related to section 80P(2)(d) of the Act raised in other appeals are concerned, identical grounds have been raised in other years, therefore, following our finding in assessment year 2014 grounds raised in other a purposes.” 3.1 In view of the above, when the to the Assessing Officer for verification of the additional evidence and decide in accordance with law Hon’ble Supreme Court cited by the assessee in impugned miscellaneous applications. I apparent from the record decision of the Hon’ble Supreme Court. The assessee is seeking review of the order of the Tribunal under the garb of the Miscellaneous Application law. Accordingly, the grounds raised in the Miscellaneous Application are dismissed. Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 investments made with such bank under the provisions of sec. 80P(2)(d) the Act. However, corresponding interest cost incurred by the assessee shall be eligible to be adjusted against such interest income at par with nationalized bank.” In view of the above for eligibility of deduction u/s 80P(2)(d) of the Act, the two conditions are required to be satisfied , firstly, whether the interest income or dividend income claimed by the assessee for deduction is part of the business income or income from other sources. Secondly, the Assessing Officer has to verify whether the interest received from co operative banks are registered under section 5(b) of Banking Regulation Act or not . Before us, the Ld. counsel of the assessee has filed an appl under Rule 29 of ITAT Rules, 1963 along with the copy of the registration of operative banks, therefore, we feel it appropriate to restore this issue back to the file of the Assessing Officer for verification and decide in th law. As far as, the grounds related to section 80P(2)(d) of the Act raised in other appeals are concerned, identical grounds have been raised in other years, therefore, following our finding in assessment year 2014 grounds raised in other assessment years are also allowed for statistical In view of the above, when the matter has been restored back to the Assessing Officer for verification of the additional evidence in accordance with law, which include decision of on’ble Supreme Court cited by the assessee in impugned miscellaneous applications. In our opinion, there is no mistake apparent from the record, particularly of not considering any decision of the Hon’ble Supreme Court. The assessee is seeking e order of the Tribunal under the garb of the Miscellaneous Application, which we are not permitted the grounds raised in the Miscellaneous Application are dismissed. Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 10 MA Nos. 286 to 289/MUM/2024 sec. 80P(2)(d) of the Act. However, corresponding interest cost incurred by the assessee shall be eligible to be adjusted against such interest income at par with In view of the above for eligibility of deduction u/s 80P(2)(d) of the Act, the two conditions are required to be satisfied , firstly, whether the interest income or dividend income claimed by the assessee for deduction is ncome from other sources. Secondly, the Assessing Officer has to verify whether the interest received from co- operative banks are registered under section 5(b) of Banking Regulation Act or not . Before us, the Ld. counsel of the assessee has filed an application under Rule 29 of ITAT Rules, 1963 along with the copy of the registration of operative banks, therefore, we feel it appropriate to restore this issue back to the file of the Assessing Officer for verification and decide in As far as, the grounds related to section 80P(2)(d) of the Act raised in other appeals are concerned, identical grounds have been raised in other years, therefore, following our finding in assessment year 2014-15, the lowed for statistical matter has been restored back to the Assessing Officer for verification of the additional evidence , which include decision of on’ble Supreme Court cited by the assessee in impugned n our opinion, there is no mistake not considering any decision of the Hon’ble Supreme Court. The assessee is seeking e order of the Tribunal under the garb of the we are not permitted under the the grounds raised in the Miscellaneous 4. In the result, all the Miscellaneous Applications of the assessee are dismissed. Order pronounced in the open Court on Sd/- (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 03/06/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit MA Nos. 286 to 289/MUM/2024 In the result, all the Miscellaneous Applications of the assessee are dismissed. nounced in the open Court on 03/06/2025. Sd/ (RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Mumbai Kamgar Madhyawarti Grahak Sahakari Sanstha Maryadit 11 MA Nos. 286 to 289/MUM/2024 In the result, all the Miscellaneous Applications of the /06/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "