2023 (7) TMI 1272

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....nvolved in any business activity, therefore, it has not employed any full-time accountant and staff who would have knowledge of timelines under the Act. It is further submitted that the claim of deduction under section 80P(2)(d) of the Act in dispute in the present appeal has been allowed in other years and the assessee was under a bona fide belief that the impugned orders are rectifiable and therefore there is no need to file the appeal. It is only upon meeting with the auditors to discuss accounts closing and the status of tax litigation, it was clarified to the assessee that it has to file the appeal against the impugned orders. It is further submitted that the delay in filing the present appeal is not deliberate and is only due to a misunderstanding of the law. On the other hand, the learned Departmental Representative ("learned DR") did not raise any serious objection against the prayer for condonation of delay in filing the present appeals. 3. We find that the reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon'ble Supreme Court in the case of Collector Land Acquisition, Anantnag Vs. MST K....

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....ncome, however, in view of Sec 80P(2)(d) the deduction was claimed. Hence, the application of principle of mutuality is completely erroneous with respect to interest income. 5. The appellant craves leave to add, alter or amend any of the grounds of the appeal, at any time before or at the time of hearing." 5. The brief facts of the case as emanating from the record are: The assessee is a registered Co-operative Housing Society. For the assessment year 2018-19, the assessee filed its return of income on 27/07/2018, declaring a total income of Rs.NIL. During the year, the assessee earned interest income of Rs. 50,39,861, from the investments made in various Co-operative Banks and claimed the same as a deduction under section 80P(2)(d) of the Act. During the assessment proceedings, the assessee submitted that it is entitled to a 100% deduction in respect of interest earned/received from the Co-operative Banks under the provisions of section 80P(2)(d) of the Act. 6. The Assessing Officer ("AO") vide order dated 12/02/2021, passed under section 143(3) read with sections 143(3A) & 143(3B) of the Act did not agree with the submissions of the assessee and held that the deduc....

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....is earned by the Co-operative Society from the investments, and (ii) such investments should be with any other Co-operative Society. Further, the term „co-operative society‟ is defined under section 2(19) of the Act as under: "(19) "co-operative society" means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies ;" 11. In the present case, there is no dispute that the assessee is a Co-Operative Housing Society. Thus, if any income as referred to in sub-section (2) to section 80P of the Act is included in the gross total income of the assessee, the same shall be allowed as a deduction. It is pertinent to note that since the assessee is registered under the Maharashtra Co-operative Societies Act, 1960, it is required to invest or deposit its funds in one of the modes provided in section 70 of the aforesaid Act, which includes investment or deposit of funds in the District Central Co-operative Bank or the State Co-operative Bank. Accordingly, the assessee kept the deposits in Co-operative Banks registered under the ....

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....deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other cooperative society. We though are in agreement with the observations of the lower authorities that with the insertion of Sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank, but however, are unable to subscribe to their view that the same shall also jeopardise the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of the interest income on their investments parked with a co-operative bank. We have given a thoughtful consideration to the issue before us and are of the considered view that as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We may herei....