SHIVKRUPA GRAMIN BIGAR SHETI SAHAKARI PATSANSTHA MARYADIT,SANGAMNER V. INCOME TAX OFFICER, WARD-2, AHMEDNAGAR, AHMEDNAGAR

ITA 1770/PUN/2024

AI Insights

The case involves Shivkrupa Gramin Bigar Sheti, a cooperative society, which appealed against the order of the National Faceless Appeal Centre (NFAC) that confirmed the Assessing Officer's decision to tax interest income of Rs.4,23,053 earned from deposits with other cooperative banks/non-scheduled banks. The society argued that this income should be exempt under section 80P(2)(d) of the Income Tax Act. The Tribunal, referencing decisions from the Karnataka High Court and the Supreme Court, found in favor of the appellant, allowing the deduction and overturning the previous orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471158 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-10-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 26-08-2024
• Other Referred Cases: CIT vs. Totagars Cooperative Sale Society, Totgar's Cooperative Sale Society Ltd. Vs. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B. S. RAJPUROHIT
• Assessee Lawyers: C.V.DESHPANDE
• Keywords: Condonation of delay; Corroborative evidences
• Section: 147; 139(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1770/PUN/2024 \u000bनधा\u000fरण वष\u000f / Assessment Year : 2015-16 Shivkrupa Gramin Bigar Sheti, Sahakari Patsanstha Maryadit, Khandgaon, Khandgaon, Sangamner – 422 605 Maharashtra PAN : AADAS3360H Vs. ITO, Ward-2, Ahmednagar Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the appellant directed against the order of National Faceless Appeal Centre (NFAC), Delhi dated 18.06.2024 for the assessment year 2015-16. 2. At the outset, I find the appeal is time barred by limitation by 11 days before the Tribunal. The counsel representing the appellant society filed a petition praying for condonation of delay on the ground that he had suffered with Chikungunya infection in the month of July, 2024 and was bed ridden. He recovered from illness only on 20.08.2024. After recovering from illness, immediately he took steps for filing the appeal which resulted in delay. In support, he filed the certificate issued by Dr. Nayana Sonawane. Therefore, the delay in Assessee by : Shri C.V. Deshpande Revenue by : Shri B.S.Rajpurohit Date of hearing : 14.10.2024 Date of pronouncement : 14.10.2024 ITA No.1770/PUN/2024 2 filing the appeal was unintentional but due to medical condition stated above. It is thus prayed to condone the delay of 11 days. 3. Having gone through the averments made in the condonation petition filed by the counsel of the appellant society and in the absence of any contrary material to disbelieve the contention putforth by the counsel, I am of the considered opinion that it is a fit case to condone the delay. I therefore condone the delay of 11 days in filing the appeal and proceed for adjudication of the appeal on merits. 4. Brief facts of the case are that the appellant is Cooperative Society governed by the provisions of Maharashtra Cooperative Societies Act, 1960. It is engaged in the business of accepting deposits from its members and providing credit facilities to its members. The Return of Income for the assessment year 2015-16 was not filed by the appellant society under the regular provisions of section 139(1) of the Act. Based on the information received by the JAO in accordance with Risk Management Strategy that the appellant made cash deposit amounting to Rs.91,47,000/- in the current bank account and time deposit of Rs.1,08,00,000/-, a notice u/s.148 was issued to the appellant society on 01.04.2022. In response to said notice u/s.148, the appellant society filed the computation of income and return of income on 30.04.2022 declaring total income of Nil, claiming deduction u/s.80P of Rs.4,23,053/- on account of dividend/interest income earned from other cooperative banks/non-scheduled banks. Notices u/s.142(1) were issued to the appellant society calling upon it to furnish the details of investments along with details of interest earned from each entity and explain in detail along with supporting evidence as to how a sum of Rs.4,23,053/- is eligible for deduction u/s.80P. The appellant society filed its submissions. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 31.10.2023 ITA No.1770/PUN/2024 3 passed u/s. 147 r.w.s.144B of the Act assessing total income at Rs.4,23,053/-. While doing so, the Assessing Officer had brought to tax the interest income of Rs.4,23,053/- earned on FDs with other Cooperative banks/non-scheduled bank holding that the said interest does not qualify for deduction u/s 80P(2)(d) of the Act. 5. Being aggrieved, an appeal was filed before the CIT(A)/NFAC, who vide impugned order confirmed the action of the Assessing Officer. 6. Being aggrieved, the appellant society is in appeal before this Tribunal in the present appeal. 7. I heard the rival submissions and perused the material on record. The solitary issue in the present appeal relates to the allowability of deduction u/s.80P(2)(d) in respect of interest income earned by a Cooperative Society formed with the object of accepting deposits from Members and lending money to its Members, which is no more res integra in view of catena of decisions passed by this Bench on this very issue. 8. In the present case, I find that admittedly the appellant society earned interest on deposits made with Sahakar Maharshi Bhausaheb Thorat, Amrutvahini Bank Ltd., Ahmednagar District Central Co.op Bank Ltd. and IDBI Bank. On perusal of provisions of section 80P(2)(d), it is clear that the income derived by a cooperative society from its investment held with other cooperative banks/non-scheduled banks shall be exempt from the total income of a cooperative society. Therefore, what is relevant for claiming of deduction u/s 80P(2)(d) is that interest income should have been derived from the investment made by the assessee cooperative society with any other cooperative society. This issue was considered by the Hon’ble Karnataka High ITA No.1770/PUN/2024 4 Court in the case of CIT vs. Totagars Cooperative Sale Society, 392 ITR 74 (Karn) wherein the Hon’ble High Court after referring to the decision of the Hon’ble Supreme Court in the case of Totgar’s Co- operative Sale Society Ltd.Vs. ITO (2010) 322 ITR 283(SC) held that the ratio of decision of the Hon’ble Supreme Court is not to be applicable in respect of interest income on investment as same falls under the provisions of section 80P(2)(d) and not u/s 80P(2)(a)(i) of the Act. In the light of this discussion, I am of the considered opinion that the interest income earned by cooperative society on deposits made out of surplus funds with cooperative banks/non-scheduled bank qualify for deduction under the provisions of section 80P(2)(d) of the Act. Therefore, the grounds of appeal raised by the appellant society stand allowed. 9. In the result, the appeal filed by the appellant is allowed. Order pronounced on this 14th day of October, 2024. Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 14th October, 2024. Satish आदेश क\u0002 \u0003ितिलिप अ\tेिषत / Copy of the Order forwarded to : 1. अपीलाथ\f / The Appellant. 2. \r\u000eयथ\f / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय \rितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब\u0014च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "