SHRI GANESH NAGARI SAHAKARI PAT SANSTHA LTD,KOLHAPUR V. ITO WARD 2(1), KOLHAPUR

ITA 1232/PUN/2025

AI Insights

The case involves Shri Ganesh Nagari Sahakari Pat Sanstha Ltd., a Cooperative Society, which appealed against the order of the Addl/JCIT(A)-2, Vadodara, concerning the assessment year 2020-21. The primary issues in the appeal were the disallowance of deduction under section 80P(2)(d) of the Income Tax Act, 1961, for interest earned from Cooperative Banks, and the disallowance of Rs.21,688 for delay in deposit of PF/ESI contributions. The Tribunal found that the interest income from Cooperative Banks is eligible for deduction under section 80P(2)(d), following a series of decisions by the Tribunal on similar issues. The matter of disallowance for delay in PF/ESI contributions was remitted back for verification of the components of the disallowed amount.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669373 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Other Referred Cases: Checkmate Services (P.) Ltd. Vs. CIT, 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: S. SADANANDA SINGH
• Assessee Lawyers: PRAMOD S. SHINGTE
• Keywords: Set aside; Additional evidence
• Section: 2

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1232/PUN/2025 Assessment Year : 2020-21 Shri Ganesh Nagari Sahakari Pat Sanstha Ltd., 2775, E-Ward, Kadamwadi, Kolhapur – 416003 Maharashtra PAN : AACAS8648H Vs. Income Tax Officer, Ward-2(1), Kolhapur Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal at the instance of assessee pertaining to the assessment year 2020-21 is directed against the order dated 25.04.2025 of Addl/JCIT(A)-2, Vadodara passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Intimation Order dated 23.12.2021 passed u/s.143(1)(a) of the Act. 2. Brief facts of the case that the assessee is a Cooperative Society registered under the Maharashtra Cooperative Societies Act, 1960 and claimed to be located in an underdeveloped area of Kadamwadi. It is engaged in the business of accepting deposits from its Members and providing credit facilities. In the return of income for A.Y.2020-21 Assessee by : Shri Pramod S. Shingte Revenue by : Shri S. Sadananda Singh Date of hearing : 16.06.2025 Date of pronouncement : 27.06.2025 ITA No.1232/PUN/2025 Shri Ganesh Nagari Sahakari Pat Sanstha Ltd. 2 deduction u/s.80P(2)(a)(i) and u/s.80P(2)(d) has been claimed at Rs.35,93,155/- and Rs.34,57,315/-. Return furnished on 24.10.2020 however in the return processed u/s.143(1)(a) of the Act two adjustments were made firstly disallowing the contribution to PF/ESI at Rs.21,688/- on account of delay in deposit and secondly not allowing the deduction u/s.80P(2)(d) of the Act at Rs.34,57,317/-. 3. Aggrieved assessee preferred appeal before ld.CIT(A) but assessee failed to succeed. So far as deduction u/s.80P(2)(d) of the Act at Rs.34,57,317/- ld.CIT(A) dismissed the ground because assessee failed to provide the interest certificate from Cooperative Banks. In regard to the next ground against disallowance at Rs.21,688/- ld.CIT(A) following the judgment of Hon’ble Apex Court in the case of Checkmate Services (P.) Ltd. Vs. CIT (2022) 143 taxmann.com 178 (SC) dismissed the ground of appeal. 4. Aggrieved assessee is now in appeal before this Tribunal. 5. Ld. Counsel for the assessee submitted that regarding the amount of interest earned from Cooperative Banks, assessee failed to provide the details because from 12.04.2025 to 14.04.2025 there were bank holidays and only one working day was given in which the details required by ld.CIT(A) could not be collected. He submitted that the details are now very much available with the assessee and the same can be verified by the ld. Jurisdictional Assessing Officer if necessary opportunity is granted. ITA No.1232/PUN/2025 Shri Ganesh Nagari Sahakari Pat Sanstha Ltd. 3 6. As regards the disallowance u/s.36(1)(va) of the Act, it was submitted that disallowance of Rs.21,688/- comprises both employers contribution and employees contribution. He submitted that so far as delay in deposit of Employer’s contribution is concerned even if the said amount is disallowed the same is added back to the total income of the assessee which is eligible for deduction u/s.80P(2)(a)(i) of the Act and therefore no addition would remain to be sustained. So far as disallowance of Employees’ contribution towards PF/ESI for delay in deposit is concerned, he fairly accepted same deserves to be added in the hands of assessee and no deduction u/s.80P(2)(d) will be allowed. 7. On the other hand, ld. Departmental Representative supported the orders of the lower authorities. 8. I have heard the rival contentions and perused the record placed before me. So far as issue of deduction u/s.80P(2)(d) of the Act is concerned, it is claimed before me that the assessee has earned interest of Rs.34,57,315/- from investments held with Cooperative Banks. Though the assessee has failed to place necessary details before lower authorities about the quantum of interest income earned from Cooperative Banks, however, there is no dispute as on date that the interest earned from Cooperative Banks is eligible for deduction u/s.80P(2)(d) of the Act. 9. This issue is no 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 ITA No.1232/PUN/2025 Shri Ganesh Nagari Sahakari Pat Sanstha Ltd. 4 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 assessee 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 assessee 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, assessee 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 assessee 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 assessee 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 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 ITA No.1232/PUN/2025 Shri Ganesh Nagari Sahakari Pat Sanstha Ltd. 5 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 assessee made investment with the Cooperative Banks we hold that the assessee 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 assessee. Effective grounds of appeal raised by the assessee 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 assessee 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 assessee are allowed.” 10. Thus I am inclined to hold that assessee is eligible for deduction u/s.80P(2)(d) of the Act for the interest income earned from investments with Cooperative Banks. However, since no verification has been carried out by the lower authorities and even before me no proper details have been furnished except some loose sheets of interest calculation, I deem it proper to restore the issue back to the file of Learned Jurisdictional Assessing Officer who shall grant reasonable opportunity to the assessee to furnish details of interest earned from investments with Cooperative Banks and on due verification of such details and considering the settled judicial precedents, ld. JAO shall decide the issue in accordance with law. 11. So far as disallowance of Rs.21,688/- for delay in deposit of Employers contribution to PF/ESI is concerned, I accept the contention of ld. Counsel for the assessee that disallowance of ITA No.1232/PUN/2025 Shri Ganesh Nagari Sahakari Pat Sanstha Ltd. 6 employer contribution will not affect the total income of the assessee because after disallowance of the amount of delay in deposit of employers contribution the same will be added back to the total income which is again eligible for deduction u/s.80P(2)(a)(i) of the Act. However, for the remaining amount, which is towards delay in deposit of Employees’ contribution to PF/ESI in view of judgment of Hon’ble Apex Court in the case of Checkmate Services (P.) Ltd. (supra) the said amount shall be added back in the hands of assessee and no deduction u/s.80P of the Act would be available. However, since the amount of alleged sum of Rs.21,688/- comprises both the amounts viz., Employers and Employees contribution, I remit back this issue to the file of Ld. JAO to make necessary verification and decide the issue, sustaining the addition to the extent of Employees contribution to PF/ESI which has been deposited after the due date prescribed under the relevant Act governing PF/ESI. Impugned order is set aside and grounds of appeal raised by the assessee are allowed for statistical purposes. 12. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on this 27th day of June, 2025. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 27th June, 2025. Satish ITA No.1232/PUN/2025 Shri Ganesh Nagari Sahakari Pat Sanstha Ltd. 7 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, “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 "