SHRI MAHAVEER NAGARI SAHAKARI PAT SAN KINI,MAHARASHTRA V. INCOME TAX OFFICER WARD-1 ICHALKARANJI , ICHALKARANJI

ITA 1990/PUN/2025

AI Insights

The case involves Shri Mahaveer Nagari Sahakari Pat San Kini, a Cooperative Society, appealing against the order of the National Faceless Appeal Centre (NFAC) which denied them the benefit of deduction under section 80P(2)(d) of the Income Tax Act for interest earned on investments with Cooperative Banks. The Assessing Officer had added the interest income as 'Income from Other Sources' and assessed it accordingly. The Tribunal, referencing previous decisions, held that the interest income from Cooperative Banks qualifies for deduction under section 80P(2)(d), as these banks are considered Cooperative Societies.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773255 (ITAT-PUNE)
• Duration Of Justice: 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Appeal Filed On: 22-08-2025
• Other Referred Cases: Shri Bhairavnath Multistate Cooperative Credit Society Ltd. (2024) 164 taxmann.com 382 (Pune-Trib.), Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal Vs. ITO in ITA No.313/PUN/2025, Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. ITO in ITA No.1365/PUN/2023, The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in ITA No.84/PAN/2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARISH BIST
• Keywords: Set aside; Additional evidence; Rule of consistency

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1990/PUN/2025 Assessment Year : 2020-21 Shri Mahaveer Nagari Sahakari Pat San Kini, Kini, Hatkanangale, Kolhapur 416112 Maharashtra PAN : AABAS1178H Vs. Income Tax Officer, Ward-1, Ichalkaranji Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated 30.07.2025 of National Faceless Appeal Centre (NFAC) Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 26.09.2022 passed u/s.143(3) r.w.s.144B of the Act. 2. When the case called for, none appeared on behalf of the assessee. However, assessee has filed written submissions on 15.09.2025 and has requested to decide the issues based upon the said written submission. Perusal of the same indicates that the sole grievance is that ld.CIT(A) erred in not granting the benefit of deduction u/s.80P(2)(d) of the Act for the interest earned on investments held with Cooperative Appellant by : None Respondent by : Shri Harish Bist Date of hearing : 16.09.2025 Date of pronouncement : 23.09.2025 Printed from counselvise.com ITA No.1990/PUN/2025 2 Banks. In support, reliance has been placed on the decision of this Tribunal in the case of Shri Bhairavnath Multistate Cooperative Credit Society Ltd. (2024) 164 taxmann.com 382 (Pune-Trib.) wherein this Tribunal has held that the interest earned on investments with Cooperative Banks deserves to be allowed as deduction u/s.80P(2)(d) of the Act. 3. On the other hand, ld. Departmental Representative supported the orders of the lower authorities. 4. We have heard the ld. Departmental Representative and perused the record placed before us. Assessee is a Cooperative Society and Nil income declared in the return of income furnished for A.Y. 2020-21 on 09.01.2021. In the return, assessee has claimed deduction under Chapter VIA at Rs.35,79,183/-. After the return being selected for Complete Scrutiny under CASS to verify the genuineness of the deduction claimed under Chapter VIA and high creditors/liabilities shown in income-tax return, valid statutory notices were served. Ld. Assessing Officer (AO) observed that assessee has earned interest income of Rs.16,67,198/- from investments held with Shree Warna Sahakari Bank Ltd. Warananagar, Kini Branch. Ld. AO after making necessary discussion held that assessee is not eligible for deduction u/s.80P of the Act for the interest income earned from Cooperative Banks and added it under the head ‘Income from Other Sources’ and assessed the income at Rs.16,67,198/-. 5. Thereafter, assessee preferred appeal before ld.CIT(A). However, inspite of submissions filed by the assessee and also placing reliance on the settled judicial precedents dealt Printed from counselvise.com ITA No.1990/PUN/2025 3 with by this Tribunal, ld.CIT(A) failed to allow the claim of the assessee and dismissed the assessee’s appeal. 6. In the appeal filed before this Tribunal, assessee has filed written submissions and has stated that in light of the decision of this Tribunal, the interest income earned from deposits/investments with Cooperative Banks is eligible for deduction u/s.80P of the Act. 7. 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 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. Printed from counselvise.com ITA No.1990/PUN/2025 4 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 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.” 8. Respectfully following the above decision and Rule of consistency, we hold that the interest income earned from investments with Cooperative Banks deserves to be allowed u/s.80P(2)(d) of the Act. Revenue authorities are directed to allow the alleged claim limited to the extent of the interest income earned during the year from the investments held with Cooperative Banks/Societies. Grounds of appeal raised by the assessee are allowed. Printed from counselvise.com ITA No.1990/PUN/2025 5 9. In the result, the appeal filed by the assessee is allowed as per terms indicated above. Order pronounced on this 23rd day of September, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 23rd September, 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, “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. Printed from counselvise.com "