2021 (5) TMI 511 - AT - Income Tax

Appeal partly allowed: Assessee eligible for deduction under Section 80P(2)(d) for interest income

Siddhivinayak Co-operative Industrial Premises Society Limited Versus The Income Tax Officer, Ward 26 (3) (2), Mumbai

Siddhivinayak Co-operative Industrial Premises Society Limited Versus The Income Tax Officer, Ward 26 (3) (2), Mumbai - TMI Issues Involved:1. Condonation of delay in filing the appeal.2. Eligibility for deduction under Section 80P(2)(d) of the Income Tax Act, 1961 on interest income from Co-operative Banks.3. Acceptance of deduction claim based on revised computation of income.Analysis:1. Condonation of Delay:The appeal was time-barred by nine days. The assessee filed an application supported by an affidavit seeking condonation of delay. The Tribunal, after examining the application, was satisfied that the delay was not deliberate and occurred due to bona fide reasons. Consequently, the delay was condoned, and the appeal was admitted for hearing on merits.2. Eligibility for Deduction under Section 80P(2)(d):The assessee, a Co-operative Credit Society, earned interest income from Co-operative Banks and claimed a deduction under Section 80P(2)(d) of the Income Tax Act, 1961. The Assessing Officer denied this benefit, and the CIT(A) upheld the denial. The Tribunal noted that the issue of whether interest income from deposits with Co-operative Banks is eligible for deduction under Section 80P(2)(d) is not settled, with various decisions supporting the allowance of such deductions.The Tribunal referred to the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. vs. ITO, which held that interest income derived by a cooperative society from investments with a co-operative bank is entitled to deduction under Section 80P(2)(d). The Tribunal also cited similar views from the Pune Bench in Majalgaon Sahakari Sakhar Karkhana Ltd. vs. ACIT and the Hon’ble Karnataka High Court in PCIT vs. Totagars Cooperative Sale Society.Despite conflicting judgments, the Tribunal followed the principle that when two conflicting decisions of non-jurisdictional High Courts are available, the view favoring the assessee should be preferred. Accordingly, the Tribunal held that the assessee is eligible to claim deduction under Section 80P(2)(d) for interest income from Co-operative Banks.3. Acceptance of Deduction Claim Based on Revised Computation:The Tribunal examined whether the assessee's claim of deduction under Section 80P(2)(d) could be accepted based on revised computation of income. The CIT(A) had rejected the claim by invoking Section 80A(5) of the Act. The Tribunal drew an analogy from the case of CIT vs. Ramco International, where the High Court upheld that a claim for deduction, if supported by requisite documents, does not require a revised return.In the present case, the interest income was reflected in the Balance Sheet, and the revised computation merely regularized the claim. The Tribunal concluded that the claim was not a fresh one and that the details were already on record. Therefore, the Tribunal allowed the deduction claim based on the revised computation but restricted it to the interest income from Co-operative Banks amounting to Rs. 1,47,848.Conclusion:The Tribunal partly allowed the appeal, condoning the delay, and held that the assessee is eligible for deduction under Section 80P(2)(d) for interest income from Co-operative Banks. The claim based on revised computation was accepted, restricted to the interest income from Co-operative Banks.