Co-operative society wins appeal on Section 80P(2)(d) deduction for interest income from bank investments

The ITAT Mumbai allowed the appeal of a co-operative society assessee regarding disallowance under section 80P(2)(d) for interest income from co-operative bank investments. The revenue incorrectly treated the due date for filing returns as 1-08-2011, despite the assessee filing within the extended due date under section 139(1). The tribunal noted that for co-operative societies with audited books, the due date was 30-09-2018, and section 80AC provisions were only applicable from AY 2018-19, not the relevant AY 2011-12. The CIT(A) order was set aside, directing the AO to allow the deduction claim.

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Issues:
Appeal against orders of National Faceless Appeal Centre (NFAC)/CIT(A) u/sec 154 and U/sec 250 of the Act regarding disallowance of deduction u/s 80P(2) clause (d) of the Act due to late filing of return of income for AY 2011-12.

Detailed Analysis:

1. Addition of Rs. 2,06,737/-:
The appellant, a cooperative society, contested the disallowance of deduction u/s 80P(2)(d) of the Act by the CIT(A) based on the alleged late filing of the return of income for AY 2011-12. The appellant argued that the return was filed before the due date of 30/09/2011, despite the CIT(A) upholding the disallowance. The appellant highlighted that the due date was extended to 31/10/2011 and that the provisions of section 80AC of the Act were not applicable for AY 2011-12.

2. Rectification Petition and Appeal:
The appellant filed a rectification petition u/sec 154 of the Act after the initial order u/sec 143(1) disallowed the deduction. The petition was rejected, leading to an appeal before the CIT(A). Despite the appellant's arguments, the CIT(A) upheld the disallowance, prompting the appellant to appeal to the Tribunal.

3. Contentions and Submissions:
During the hearing, the appellant's representative argued that the due date for filing the return was 30/09/2011, not 01/08/2011 as mentioned in the order. The representative emphasized that the appellant's books were audited under the Cooperative Societies Act and that the return was filed within the extended due date. Additionally, the appellant cited a relevant case law regarding due dates for cooperative societies.

4. Tribunal Decision:
After considering the submissions and the facts of the case, the Tribunal found in favor of the appellant. The Tribunal noted that the appellant's books were audited under the Cooperative Societies Act, and the return was filed within the due date. The Tribunal also highlighted the inapplicability of section 80AC of the Act for AY 2011-12. Consequently, the Tribunal directed the Assessing Officer to allow the deduction u/sec 80P(2)(d) of the Act, leading to the appeal being allowed.

5. Conclusion:
Both appeals filed by the appellant were allowed by the Tribunal, following a detailed analysis of the issues related to the disallowance of deduction u/s 80P(2)(d) of the Act due to the timing of the filing of the return of income. The Tribunal's decision was based on the specific circumstances of the case, including the nature of the appellant as a cooperative society and the applicable laws for auditing and filing returns.

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