THE KARAD URBAN SEVAK SAHAKARI PATSANSTHA MARYADIT KARAD ,SATARA V. ITO WARD-1, SATARA

ITA 2985/PUN/2025

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The case involves The Karad Urban Sevak Sahakari Patsanstha Maryadit Karad, a cooperative society, which appealed against the order of the National Faceless Appeal Centre (NFAC) that disallowed a deduction of 9,69,439 under section 80P of the Income Tax Act, 1961. The income in question was interest earned from investments with Cooperative Banks. The Tribunal referenced a series of precedents confirming that such interest income is deductible under section 80P(2)(d) when earned from deposits with Cooperative Banks, which are considered Cooperative Societies.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 833693 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Appeal Filed On: 04-12-2025
• Other Referred Cases: 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: SHASHANK OJHA VIRTUAL
• Assessee Lawyers: DEEPAK CHINTAMAN
• Keywords: Set aside; Additional evidence

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.2985/PUN/2025 Assessment Year : 2020-21 The Karad Urban Sevak Sahakari Patsanstha Maryadit Karad, C/o. The Karad Urban Coop Bank Ltd., 516/2, Shaniwar Peth, Karad, Satara – 415110 Maharashtra PAN : AACAT5383J Vs. Income Tax Officer, Ward-1, Satara Appellant Respondent आदेश / ORDER The captioned appeal at the instance of assessee pertaining to the Assessment Year 2020-21 is directed against the order dated 24.10.2025 of National Faceless Appeal Centre, Delhi (NFAC) passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 09.09.2022 passed u/s.143(3) r.w.s.144B of the Act. 2. The grievance of the assessee raised in five grounds of appeal revolves around the disallowance of deduction u/s.80P of the Act at ₹39,69,439. 3. At the outset, ld. Counsel for the assessee submitted that the net income of the assessee society during the year is ₹38,25,516.14 and the same has been arrived after excluding Assessee by : Shri Deepak Chintaman Gadgil Revenue by : Shri Shashank Ojha (virtual) Date of hearing : 14.01.2026 Date of pronouncement : 03.02.2026 Printed from counselvise.com ITA No.2985/PUN/2025 The Karad Urban Sevak Sahakari Patsanstha Maryadit Karad 2 the interest income at ₹39,69,439 earned on the investments held with Cooperative Banks. He submitted that the assessee is eligible for deduction u/s.80P(2)(a)(i) of the Act and even otherwise the assessee is also eligible for deduction u/s.80P(2)(d) of the Act for the interest earned from Cooperative Banks and that the issue stands decided by this Tribunal in plethora of decisions referred in the paper book. On the other hand, ld. Departmental Representative supported the order of ld.CIT(A). 4. I have heard the rival contentions and perused the records placed before me. I observe that the assessee is a Cooperative society and Nil income declared in the return of income for A.Y. 2020-21 furnished on 23.12.2020. After the case being selected for Complete Scrutiny valid statutory notices were served upon the assessee. During the source of assessment proceedings, ld. Assessing Officer has observed that assessee has earned interest income of ₹39,69,439 from the investments held with Cooperative Banks namely The Satara District Central Cooperative Bank Ltd. And The Karad Urban Cooperative Bank Ltd. Ld. Assessing Officer concluded the proceedings making addition of ₹39,69,439 and assessed the income at ₹39,69,439. Thereafter, assessee preferred appeal before ld.CIT(A) but failed to succeed. 5. Before me, ld. Counsel for the assessee has demonstrated that sum of ₹39,69,439 has been earned from deposits held with Cooperative Banks and that this interest income is eligible for deduction u/s.80P(2)(d) of the Act. 6. The issue under consideration is no longer res integra by virtue of catena of decisions taking consistent view that interest Printed from counselvise.com ITA No.2985/PUN/2025 The Karad Urban Sevak Sahakari Patsanstha Maryadit Karad 3 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 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 Printed from counselvise.com ITA No.2985/PUN/2025 The Karad Urban Sevak Sahakari Patsanstha Maryadit Karad 4 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.” 7. In light of the above decision and other judicial precedents consistently followed by this Tribunal, I hold that the assessee is eligible for deduction u/s.80P(2)(d) of the Act for the interest income of ₹39,69,439 earned from the investments held with Cooperative Banks. Ground No.2 raised by the assessee s allowed. 8. Since I have allowed Ground No.2 raised by the assessee, dealing with other grounds would be merely academic in nature. Printed from counselvise.com ITA No.2985/PUN/2025 The Karad Urban Sevak Sahakari Patsanstha Maryadit Karad 5 9. In the result, the appeal of the assessee is allowed as per terms indicated hereinabove. Order pronounced on this 03rd day of February, 2026. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; दिन ंक / Dated : 03rd February, 2026. Satish आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, “SMC” बेंच, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. आिेश नुस र / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune Printed from counselvise.com "