RAJRSHI SHAHU NAGARI SAHAKARI PAT SANSTHA MARYADIT KURUNDWAD,KOLHAPUR V. INCOME TAX OFFICER, ICHALKARANJI

ITA 1955/PUN/2025

AI Insights

The case involves the Rajrshi Shahu Nagari Sahakari Pat Sanstha Maryadit Kurundwad, a cooperative society, appealing against the order of the National Faceless Appeal Centre (NFAC), which denied them a deduction under section 80P(2)(d) of the Income Tax Act, 1961, for interest earned on investments with Cooperative Banks. The Tribunal noted that the appellant had initially failed to respond to notices due to administrative oversights related to their PAN transition. The Tribunal acknowledged the consistent judicial precedent that interest income from Cooperative Banks is eligible for deduction under section 80P(2)(d) and remitted the matter back to the JAO for detailed examination and verification of the claimed deduction.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784292 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 18-08-2025
• Other Referred Cases: Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors., Inder Singh Vs. State of Madhya Pradesh, Cognizance for Extension of Limitation In re, 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: VINOD PAWAR
• Assessee Lawyers: PRAMOD S. SHINGTE
• Keywords: Condonation of delay; Set aside; Additional evidence; Reasonable cause; Period of limitation; Time period of passing order; Non compliance
• Section: 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1955/PUN/2025 Assessment Year 2020-21 Rajrshi Shahu Nagari Sahakari Pat Sanstha Maryadit Kurundwad, Bazar Peth, Maruti Mandir Chowk, Kurundwad, Tal. Shirol, Dist. Kolhapur – 416106 Maharashtra PAN : AAABR0166N Vs. Income Tax Officer, Ward-1, Ichalkaranji Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of appellant pertaining to A.Y. 2020-21 is directed against the order dated 23.05.2025 framed by National Faceless Appeal Centre (NFAC), Delhi emanating out of Assessment Order dated 09.09.2022 passed u/s.143(3) r.w.s.144B of the Income Tax Act, 1961. 2. Registry has informed that that the instant appeal is barred by limitation as the appellant has filed this appeal with a delay of 18 days. Appellant in support of its plea for condonation of delay has filed an Affidavit stating that the appellant society was previously allotted PAN AAABR0166N Appellant by : Shri Pramod S. Shingte Respondent by : Shri Vinod Pawar (Virtual) Date of hearing : 28.10.2025 Date of pronouncement : 12.11.2025 Printed from counselvise.com ITA No.1955/PUN/2025 2 which was for Body of Individual. Therefore, appellant society applied for fresh PAN and finally new PAN AAGAR3547J was allotted on 08.06.2020. Since the appellant was tracking notices on the new PAN inadvertently the notices sent on the old PAN went unnoticed. On perusing the averments made in the affidavit, we are satisfied that ‘reasonable cause’ prevented the appellant to file the appeal within the stipulated time. We therefore taking guidance from the judgments of Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382) condone the delay of 18 days in filing of the instant appeal before this Tribunal and admit the appeal for adjudication. 3. At the outset, ld. Counsel for the appellant submitted that the issue relates to denial of deduction u/s.80P(2)(d) for the interest earned on investments held with Cooperative Banks. He however fair admitted that appellant failed to respond to any of the notices of hearing issued by ld.CIT(A) resulting into dismissal of appeal without dealing with merits of the case. He therefore prayed that the matter may please be restored to the file of ld.Jurisdictional Assessing Officer for necessary examination and verification of the interest income earned on investments with Cooperative Banks and the deduction u/s.80P(2)(d) of the Act may please be granted. 4. On the other hand, ld. Departmental Representative supported the order of ld.CIT(A). Printed from counselvise.com ITA No.1955/PUN/2025 3 5. We have heard the rival contentions and perused the record placed before us. We note that the appellant is a society and filed its return of income for A.Y. 2020-21 on 25.12.2020 declaring total income of Rs.2,27,820/- After the case being selected for scrutiny under CASS for the reason “Income from Other Sources, high interest/expenditure /finance costs, high creditors/liability, deduction from total income under Chapter VIA and Expenditure of Personal Nature and notices u/s.143(2) and 142(1) were validly issued, the appellant could only furnish reply to such notice dated 20.03.2022 providing few details. Since the appellant has earned interest on investments held with banks at Rs.98,85,426/- and further appellant did not file any details for such interest income, ld. AO treated the sum as Income from Other Sources and made addition thereon and assessed the income at Rs.1,01,13,246/-. Appellant challenged the addition made by ld. AO before ld.CIT(A) however failed to respond to any notice of hearing. 6. We further note that notice of hearing issued by ld. AO during the course of assessment proceedings fall during covid- 19 pandemic period when there were restrictions on the movement of general public. Almost two years period have been removed out of the limitation period by the Hon’ble Apex Court in the case of Cognizance for Extension of Limitation In re (2022) 441 ITR 722 (SC) considering the difficulties faced by the litigants. Non compliance before ld.CIT(A) has been fairly explained that it was not intentional. Printed from counselvise.com ITA No.1955/PUN/2025 4 7. Ld. Counsel for the appellant has submitted that interest earned on investments held with Cooperative Banks is allowable as deduction u/s.80P(2)(d) of the Act. 8. The issue under consideration is no longer 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 appellant 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 appellant 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, appellant has not filed the requisite details before ld.CIT(A). We however considering the fact that the issue 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 appellant 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 appellant 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 Printed from counselvise.com ITA No.1955/PUN/2025 5 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 appellant made investment with the Cooperative Banks we hold that the appellant 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 appellant. Effective grounds of appeal raised by the appellant are allowed.” 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 appellant 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 appellant are allowed.” 9. In light of the above decision and other judicial precedents consistently followed by this Tribunal, we find that the appellant is eligible for deduction u/s.80P(2)(d) of the Act for the interest income, if any, earned from investments held with Cooperative Banks. However, since the quantification of this amount has not been explained before the lower authorities and the appellant has only furnished paper book running into 102 pages before this Tribunal, we deem it appropriate to remit back the issue to the file of ld. JAO for necessary verification and examination of the issue about the deduction u/s.80P(2)(d) of the Act if any available to the appellant. Ld. JAO in the set aside proceedings shall give reasonable opportunity to the appellant to file the requisite Printed from counselvise.com ITA No.1955/PUN/2025 6 details and then decide in accordance with law. Appellant is directed to update latest email and contact details on ITBA portal. Appellant is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and effective grounds raised by the appellant are allowed for statistical purposes. 10. In the result, the appeal filed by the asseseee is allowed for statistical purposes. Order pronounced on this 12th day of November, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 12th November, 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, “B” ब\u0014च, पुणे / DR, ITAT, “B” 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 "