Deduction under section 80P: commission from public-utility bill collection qualifies as banking-like activity, deduction allowed.

Whether the assessee's commission from collecting public-utility bills qualifies for deduction under the cooperative-society deduction provision was decided by applying the principle that bill-collection and related commission earned for public utilities amount to banking-like activity incidental to the society's main objects; on facts the commission arose from deposits and activities incidental to the society's objects and not from interest on surplus funds with banks, and the Tribunal applied prior Tribunal precedent to allow the deduction.

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Issues: Whether the assessee is eligible for deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961 in respect of commission income received from MSEDCL for A.Y. 2020-21.

Analysis: The claim concerns commission income from MSEDCL amounting to Rs.41,873/-. The Tribunal considered prior Tribunal authority applying the principle that activities of collecting bills/dues and earning related commission for and on behalf of government or public utilities are akin to banking activity and therefore fall within the scope of deduction available to cooperative societies. On facts the commission income arises from deposits and activities incident to the society's main objects and is not interest earned from surplus funds with scheduled banks. The Tribunal applied that precedent to conclude the commission income is eligible as incidental to banking-like activity and thus allowable under Section 80P(2)(a)(i) of the Income-tax Act, 1961.

Conclusion: Deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961 in respect of the commission income from MSEDCL of Rs.41,873/- is allowed in favour of the assessee.

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