Cooperative society's interest income qualifies for tax deduction and exemption under Income-tax Act The appeals by the assessees challenging orders of the Principal Commissioner of Income Tax-2, Pune, and National Faceless Appeal Centre for A.Y. 2018-19 ...
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Cooperative society's interest income qualifies for tax deduction and exemption under Income-tax Act
The appeals by the assessees challenging orders of the Principal Commissioner of Income Tax-2, Pune, and National Faceless Appeal Centre for A.Y. 2018-19 and 2020-21, regarding deduction under section 80P(2)(a)(i) or 80P(2)(d) of the Income-tax Act, 1961, were allowed. The Pune Tribunal held that interest income earned by the cooperative society from cooperative banks qualified for deduction under section 80P(2)(d) and exemption under section 80P(2)(a)(i), citing judicial precedents. The Tribunal found the assessment order not erroneous and emphasized that revisionary orders cannot stand when the issue is favorably settled by legal precedents.
Issues involved: The judgment involves appeals by different assessees challenging orders of Principal Commissioner of Income Tax-2, Pune, and National Faceless Appeal Centre [NFAC], Delhi, for A.Y. 2018-19 and 2020-21, regarding the issue of deduction under section 80P(2)(a)(i) or 80P(2)(d) of the Income-tax Act, 1961.
Summary: The appeals raised by the assessees were based on the identical issue of deduction under section 80P(2)(a)(i) or 80P(2)(d) of the Income-tax Act, 1961. The assessees contended that the matter was covered by a previous decision of the Pune Tribunal. The Pune Tribunal, after examining the facts, held that the interest income earned by the cooperative society from cooperative banks qualified for deduction under section 80P(2)(d) and also for exemption under section 80P(2)(a)(i). The Tribunal referred to various judicial precedents supporting this view and concluded that the assessment order was not erroneous or prejudicial to the interests of revenue. The Tribunal emphasized that when the issue is covered in favor of the assessee by judicial precedents, the revisionary orders passed by the authorities cannot be sustained in the eyes of the law. Therefore, the appeals of the assessees were allowed.
Separate Judgment: The judgment was pronounced by Shri Partha Sarathi Chaudhury, Hon. Judicial Member, and Shri R.S. Syal, Hon. Vice-President on 3rd July, 2023.
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