SUBHASH SAMUDAYAK SAHAKARI SHETKI SANGH LTD.,PUNE V. ITO WARD 14(5), PUNE, PUNE

ITA 160/PUN/2025

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The case involves Subhash Samudayak Sahakari Shetki Sangh Limited, a cooperative society, which appealed against the orders of the Principal Commissioner of Income-Tax, Pune-4 and the National Faceless Appeal Centre, Delhi. The appeals were related to the assessment years 2017-18 and 2018-19, challenging the revisionary orders under section 263 and the assessment orders under sections 143(3) and 143(3A) of the Income Tax Act, 1961. The primary contention was regarding the eligibility of deductions claimed under section 80P for interest and dividend incomes. The Tribunal, referencing various precedents, particularly noted that interest income from deposits with cooperative banks is eligible for deduction under section 80P(2)(d).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717189 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 20-01-2025
• Other Referred Cases: Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors., Inder Singh Vs. State of Madhya Pradesh, 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: AMIT BOBDE
• Assessee Lawyers: DEEPA KHARE
• Keywords: Set aside; Business income; Opportunity of being heard; Additional evidence; Reasonable cause; Corroborative evidences; Revision of order
• Section: 143(3); 263

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 Nos.160 and 181/PUN/2025 Assessment Years : 2017-18 and 2018-19 Subhash Samudayak Sahakari Shetki Sangh Limited, At Manjari, Post Manjari Farm, Taluka-Haveli, Pune 412307 Maharashtra PAN: AAAAS0821L Vs. ITO, Ward 14(5), Pune Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeals at the instance of assessee pertaining to Assessment Years 2017-18 and 2018-19 are directed against the order dated 23.03.2022 and 20.12.2023 of PCIT, Pune-4 passed u/s.263 and 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 Orders dated 26.12.2019 and 06.04.2021 passed u/s.143(3) and 143(3) r.w.s143(3A) & 143(3B) of the Act. 2. Since common issues have been raised by the assessee in the impugned assessment years, we proceed to dispose of these appeals by way of this consolidated order for the sake of convenience. Appellant by : Shri Deepa Khare Respondent by : Shri Amit Bobde Date of hearing : 30.07.2025 Date of pronouncement : 19.08.2025 Printed from counselvise.com ITA No.160 and 181/PUN/2025 Subhash Samudayak Sahakari Shetki Sangh Limited 2 3. Registry has informed that appeals before this Tribunal are time barred by 965 days and 327 days respectively. Assessee has filed affidavits explaining the delay. The reason for delay in filing the appeals is same and therefore we proceed to reproduce the reasons given for A.Y.2017-18 and the same reads as follows: “1. I am a Chairman of Subhash Samudayik Sahakari Shetki Sangh Ltd Pune, At Post Manjari, Tal: Haveli, Dist Pune since December 2024. 2. Subhash Samudayik Sahakari Shetki Sangh Ltd Pune is a Cooperative Society registered under Maharashtra Cooperative Society Act 1960 and rules thereunder. 3. The Society is formed for the main objects of ensuing carrying out agricultural activities on cooperative principles and providing benefits to the farmers. The Society has members who are farmers and provides various facilities to its farmer members. 4. Farmers are members, having very limited knowledge in the field of Account finalisation, various laws applicable to the society i.e. Income Tax Act 1961 etc. 5. The appellant has filed the return of income for AY 2017-18 declaring income of Rs.13,55,580/- after claiming deduction u/s 80P of Rs.26,88,676/-. Scrutiny Assessment was taken up under CASS for the verification of deduction under Chapter VIA and returned income was accepted. 6. That the Principal Commissioner of Income-Tax, Pune 4 invoked provisions of Section 263 for verification of interest income of Rs.26,19,223/- not being eligible for deduction u/s 80P vide its order dated 23.03.2022 7. That the fresh assessment was Order was passed u/s 143(3) r.w.s. 263 on 17.03.2023 denying deduction u/s 80P and subsequently penalty u/s 270A was passed on 11.09.2023 levying penalty of Rs.16,02,964/-. That the Society was not having adequate professional advice and there was no legal remedy adopted for want of advice. The farmer members of the Society are not equipped with sufficient knowledge of Income Tax proceedings. The bank account with Pune District Central Coop Bank of the Society was attached on 05.11.2024. The Society therefore had to undergo financial stress and sought professional services for the release of Bank accounts. The Society availed the services of P S Athawale & Co. Chartered Accountants who informed the society that the proceedings for different years have been completed and there was an outstanding Printed from counselvise.com ITA No.160 and 181/PUN/2025 Subhash Samudayak Sahakari Shetki Sangh Limited 3 demand of Rs. 66,083,901/- for various Assessment Years i.e. 2003- 04, 2006-07, 2012-13, 2013-14, 2014-15, 2017-18 and 2018-19. 8. That the appeals for AY 2017-18 and 2018-19 was advised to be filed. The appeal for AY 2017-18 was thereafter filed on advice on 21.01.2025 against the order u/s 263 before the Income Tax appellate Tribunal. There is a delay in filing appeal before Income Tax Appellate Tribunal by 965 days. 9. It is submitted that the delay is for reasons beyond the control of the Society and there was no intention to delay the filing of appeal within the statutory time. In the interest of justice, the delay in filing appeal may kindly be condoned and the appeal may please be considered on merits.” 4. After hearing both the sides and having gone through the averments made in the affidavits filed by the assessee, we find that due to ‘reasonable cause’ assessee failed to file the appeals within the stipulated time limit. We therefore condone the delay of 965 days and 327 days respectively in filing the appeals and admit the appeals for adjudication in light of judgments of Hon’ble Supreme 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). 5. First, we take up ITA No.160/PUN/2025. In this appeal, assessee is aggrieved with the revisionary order passed u/s.263 of the Act. Ld. Counsel for the assessee fairly admitted that assessee failed to appear before ld.PCIT. She submitted that the only reason for giving rise to revisionary proceedings was regarding verification of claim of deduction u/s.80P of the Act at Rs.26,88,676/-. She submitted that necessary details were filed before the ld. Assessing Officer in reply to notice issued u/s.142(1) of the Act. She also submitted that deduction u/s.80P of the Act comprise of the deduction u/s.80P(2)(d) for the interest and dividend earned from cooperative banks Printed from counselvise.com ITA No.160 and 181/PUN/2025 Subhash Samudayak Sahakari Shetki Sangh Limited 4 amounting to Rs.26,38,676/- and deduction u/s.80P(2)(c) at Rs.50,000/- and the said claim has been duly verified by ld. Assessing Officer. She thus prayed that considering the facts of the case the revisionary proceedings deserves to be quashed. 6. On the other hand, ld. Departmental Representative supported the orders of the lower authorities. Ld. DR submitted that ld. Assessing Officer erred in allowing the claim of deduction u/s.80P of the Act at Rs.26,88,676/-. 7. We have heard the rival contentions and perused the record placed before us. We observe that the assessee is aggrieved with the revisionary proceedings u/s.263 of the Act. We observe that the assessee is a cooperative society engaged in the business of running a Marriage hall. Income of Rs.13,55,580/- declared in the e-return filed on 04.08.2017 after claiming deduction u/s.80P of the Act at Rs.26,88,676/-. Scrutiny proceedings were carried out and assessment u/s.143(3) framed on 26.12.2019 accepting the returned income. During the course of assessment proceedings, ld. Assessing officer called for the information about the deduction claimed u/s.80P of the Act in the notice issued u/s.142(1) of the Act dated 17.01.2023. Assessee furnished the reply on 17.02.2024 and the bifurcation of deduction u/s.80P of the Act has been submitted and the annexure to the assessee’s reply dated 17.02.2024 is reproduced below : Sr. No. Particulars Remarks 1. Please furnish nature of business/activities done for the year under consideration. Subhash Samudayak Sahakari Shetki Sangh Limited carries on following Activities: 1. Agricultural Operations and Printed from counselvise.com ITA No.160 and 181/PUN/2025 Subhash Samudayak Sahakari Shetki Sangh Limited 5 earning Agriculture Income / Loss. During the year the society incurred loss from agriculture operations. 2. The Society also runs Netaji Subhash Mangal Karyalay. And earns rented income by giving its property on rent for various occasions. A separate books of account is maintained by society. 1. For Agriculture Operations 2. For Running Netaji Subhash Mangal Karyalay. The Profit & Loss Account of the Society showing these two operations is attached as per Serial No. 2. 2. Please submit copy of audited balance sheet along with all annexures. The Audited Profit & Loss Account and Balance Sheet of the Society is Attached. 3. Please explain deduction claimed u/s 80P for Rs.26,88,676/- along with complete documentary evidences and justification for claiming the same. The Society claimed Total Deduction of Rs. 26,88,676/- u/s. 80P of Income Tax Act 1961. The details of income for which Deduction is claimed is as under: Particulars Amount 1.Interest Income from Cooperative Bank Rs.26,19,223/- 2. Dividend Income from Cooperative Bank Rs.19,453/- 3. Deduction allowed u/s.80P(2)(c)(ii) Rs.26,88,676/- Documentary Evidences like Certificate from PDCC Bank regarding Interest and Dividend income is attached. 4. Furnish complete details of deposits for the year under Complete Details of Deposits from Members And also Deposits from Mangal Karyalay for the year is Printed from counselvise.com ITA No.160 and 181/PUN/2025 Subhash Samudayak Sahakari Shetki Sangh Limited 6 consideration with complete supporting evidences. Attached. 5. Furnish copy of interest certificates for total interest of Rs.26,88,676/-received for the year under consideration. Interest Certificate of Total Interest of Rs.26,19,223/- received for the year is Attached. 6. Please submit complete list of your members. Complete list of Members is Attached. 7. Please furnish details of the members of the society from whom you have received interest for the year under consideration. No such interest received from the members of the society for the year. 8. Please justify that you have invested your money for the activities of the society for making deposits. Submit necessary evidences in respect of your submissions. The Society invested deposit money in the activities of the society in the past. 9. Please furnish copy of bye-laws of the society. Copy of bye-laws of the society is Attached. 10. Furnish computation of income for the year under consideration Computation of Income for the year is Attached. 8. From the above reply, we observe that assessee has provided the details of deduction u/s.80P of the Act. Major amount of deduction is on account of interest income received from cooperative banks at Rs.26,19,223/- and dividend from cooperative banks at Rs.19,453/-. 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 Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal Vs. ITO Printed from counselvise.com ITA No.160 and 181/PUN/2025 Subhash Samudayak Sahakari Shetki Sangh Limited 7 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 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. Printed from counselvise.com ITA No.160 and 181/PUN/2025 Subhash Samudayak Sahakari Shetki Sangh Limited 8 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. In view of the above and respectfully following the ratio laid down by this Tribunal in the given facts and circumstances in my considered view assessee deserves to be allowed the deduction u/s.80P(2)(d)of the Act at Rs.26,19,223/- on account of interest income received from cooperative banks and at Rs.19,453/- on account of dividend earned from cooperative banks. 11. Details in support of the interest from cooperative banks also stands filed at page 12 of the paper book. Further, the deduction u/s.80P(2)(c) at Rs.50,000/- is also allowable to the assessee as necessary condition stands fulfilled. Under these facts and circumstances since valid claim of deduction u/s.80P of the Act at Rs.26,88,676/- has been allowed by the ld. Assessing Officer after due verification of the records, we fail to find any justification in the invocation of section 263 of the Act in carrying out the revisionary proceedings. Impugned order is thus quashed and assessment order dated 26.12.2019 is restored. Effective Grounds of appeal raised by the assessee Printed from counselvise.com ITA No.160 and 181/PUN/2025 Subhash Samudayak Sahakari Shetki Sangh Limited 9 challenging the revisionary proceeding in ITA No.160/PUN/2025 stands allowed. 12. Now we take up ITA No.181/PUN/2025 for A.Y. 2018-19. In this appeal, assessee has raised effectively two grounds, firstly against the addition of Rs.4,81,66,095/- towards business income and secondly against the deduction u/s.80P(2)(d) of the Act. 13. At the outset, Ld. Counsel for the assessee submitted that on multiple occasions assessee failed to make any compliance before ld.CIT(A) resulting into passing of exparte order. The reasons for non-appearance was beyond control of the assessee and therefore prayed for granting one more opportunity to plead its ground of appeal before ld.CIT(A). Ld. Departmental Representative did not object to the request made by ld. Counsel for the assessee. 14. Under the given facts and circumstances and the prayer made by ld. Counsel for the assessee and there being no objection from the side of ld. Departmental Representative, we in the larger interest of justice and being fair to both the parties remit all the issues raised in the instant appeal to the file of ld.CIT(A) for denovo adjudication. Needless to mention that ld.CIT(A) in the course of set-aside proceedings shall afford a reasonable opportunity of being heard to the assessee. Ld.CIT(A) may call for remand report from the Jurisdictional Assessing Officer, if necessary, and after considering the submissions/evidences filed by the assessee shall decide the issues in accordance with law. Assessee is directed to update latest email id and contact detail on ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment Printed from counselvise.com ITA No.160 and 181/PUN/2025 Subhash Samudayak Sahakari Shetki Sangh Limited 10 unless otherwise required for reasonable cause. Impugned order is set aside and the effective grounds of appeal raised by the assessee are allowed for statistical purposes. 15. In the result, ITA No.160/PUN/2025 is allowed and ITA No.181/PUN/2025 is allowed for statistical purposes. Order pronounced on this 19th day of August, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 19th August, 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 "