TaxTMI 
TaxTMI 
2024 (8) TMI 275
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....als), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'Ld. CIT(A), NFAC') has grossly erred on facts and in law in confirming the addition Rs. 7,60,197/- by not allowing deduction u/s. 80P(2)(a)(i) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'}, despite the fact that the appellant is a Co-operative Thrift & Credit Society and the income of Rs. 7,60, 197/- is attributable to the activities mentioned in section 80P(2)(a)(i) of the Act. 2. That on the facts and in the circumstances of the case the Ld. CIT(A), NFAC has grossly erred on facts and in law in confirming the addition Rs. 7,60,197/- by not allowing deduction u/s. 80P(2)(a)(i) of the Act by not following the 'principle of judicial precedence' as the jurisdictional judicial pronouncements are in favour of the appellant. 3. That on the facts and in the circumstances of the case the Ld. CIT(A), NFAC has grossly erred on facts and in law in confirming the addition Rs. 7,60,197/- by not allowing deduction u/s. 80P(2)(a) (i) of the Act by not appreciating and accepting various judicial pronouncements in favour of the appellant relied upon. 4. ....
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....under E-assessment Scheme, 2019 on the following issues:- [i]. Deductions from income from other sources; [ii]. Investments/Advances/Loans; and [iii]. Deduction from total income under Chapter VI-A. 3.1. The assessee is a Co-operative Credit Society Ltd. and filed its return of income under the status of "AOP" for the year under consideration on 31.08.2018, declaring total income at Rs. NIL. The return of income was processed by Centralized Processing Centre ("CPC") u/s 143(1) of the Income Tax Act, 1961 ("the Act"). Therefore, statutory notices were issued to the assessee. In response to the notices, the assessee submitted its reply alongwith details as called for. It was noticed by the Assessing Authority that the assessee had claimed deduction of INR 43,29,747/- u/s 80P of the Act. The Assessing Officer ("AO") further noticed that the amount of INR 7,60,197/- is interest income derived from deposits in banks/Co-operative banks. The Assessing Authority was of the view that such deduction is not allowable as the income is not from the business activities of the assessee. But in this case, the assessee had deposited its surplus fund with banks and earn....
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....ternatively, deduction of Rs. 7,60,197/- u/s 80P(2)(d), being interest and dividend income derived by "co-operative society" from its investments with any other "co-operative society" (The Delhi State Co-operative Bank Ltd, Delhi). Ground No. 9 & 10 pertains to interest u/s 234B & 234C 4. Allowing Ground No. 10 pertaining to charging of Interest Rs. 85,766/- u/s 234B of the Act without any direction. 5. Allowing Ground No. 11 pertaining to charging of Interest Rs. 67,408/- u/s 234C of the Act without any direction." 7. Ld. Counsel for the assessee re-iterated the submissions as made in the synopsis. He further submitted that under the identical facts, the Tribunal has allowed the deduction claimed similarly situated the assessee. In support of this contention, the assessee has placed reliance on the decision of the Tribunal in ITA No.4078 & 2036/Del/2019 and ITA No.6935/Del/2018 in the case of The Mantola Cooperative Thrift & Credit Society Ltd. vs ITO vide order dated 27.07.2020. Further, reliance is placed on the decision of Hon'ble Delhi High Court in the case of Mantola Co-operative Thrift & Credit Society Ltd. vs CIT in ITA No.569/2013 vide order ....
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.... section 80P(4) specifically prohibits application of section 80P(4) qua the Co-operative Banks. 12. On the other hand, Ld. Counsel for the assessee heavily relied upon the decision of the Co-ordinate Bench of the Tribunal in the case of The Mantola Cooperative Thrift & Credit Society Ltd. vs ITO (supra). For the sake of clarity, the relevant contents of the decision of Division Bench of the Tribunal are reproduced as under:- 16. "We have given a thought to consider whether the cooperative bank wherein the assessee made deposits out of this surplus fund be considered as a co-operative society, for if a co-operative bank is considered to be a co-operative society than only the interest earned by the assessee on the deposits would be eligible for deduction u/s 80P(2)(d). We find that cooperative society is a broad and larger umbrella under which the co-operative banks do perform. All cooperative societies may not be banks but all co-operative banks are deemed to be co-operative societies. According to banking Regulations Act, a co-operative society bank as the same meaning of the cooperative society. 17. Further, we have also given a thought as to the interest ea....
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....case of [dividends, 94[other than dividends referred to in section 115-O ,]] [or interest on securities], any reasonable sum paid by way o f commission o r remuneration to a banker o r any other person for the purpose of realising such dividend [or interest] on behalf of the assessee; [(ia) in the case of income of the nature referred to in sub-clause (x) o f clause (24) o f section 2 which is chargeable to income-tax under the head "Income from other sources", deductions , so far as may be, in accordance with the provisions o f clause (va) o f sub-section (1) of section 36 ;] (ii) in the case o f income o f the nature referred to in clauses (ii) and (iii) o f sub-section (2) o f section 56, deduction s, so far as may be, in accordance with the provisions o f sub-clause (ii) of clause (a) and clause (c) o f section 30, section 31 and [subsections (1) [***] and (2)] o f section 32 and subject to the provisions o f [section 38]; [(iia) in the case of income in the nature o f family pension , a deduction of a sum equal to thirty-three and one-third per cent of such income or [ fifteen] thou sand rupees, whichever is less. Explanation .-For the purposes of this clause, " famil....
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....horities below mis-directed itself in applying the ratio of the Hon'ble Supreme Court in the case of Totgar's Co-operative Sale Society Ltd. vs ITO (supra). I therefore, hold that the assessee would be eligible for deduction u/s 80P(2)(d) of the Act. The grounds raised are allowed in terms indicated herein above. 14. Now, coming to Ground Nos. 8 & 9 raised by the assessee which relate to levy of interest u/s 234B & 234C of the Act. The levy of interest is consequential in nature hence, I hold accordingly. 15. Ground No.10 raised by the assessee is general in nature, needs no separate adjudication hence, dismissed. 16. In the result, the appeal of the assessee is partly allowed. ITA No.3693/Del/2023 [Assessment Year : 2020-21] 17. Now, I take up the appeal of the assessee in the Assessment Year 2020- 21 i.e. ITA No.3693/Del/2023. The assessee has raised following grounds of appeal:- 1. "That on the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'Ld. CIT(A), NFAC'} has grossly erred on facts and in law in confirming the addition Rs. 5,42,880....
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....39;s Co-operative Sales Society (2017). 7. That, without prejudice to ground No. 1 to 3, on the facts the case the Ld. CIT(A), NFAC has grossly erred on facts and in law in confirming the addition Rs. 5,42,880/- by not allowing deduction u/s. 80P(2)(d) of the Act by not following the 'principle of judicial precedence' as the jurisdictional judicial pronouncements are in favour of the appellant. 8. That, without prejudice to ground No. 1 to 3, on the facts, the case the Ld. CIT(A), NFAC has grossly erred in law in not disposing of following Ground No. 7: "That on the facts and in the circumstances of the case the AU has grossly erred in determining Rs. 25,28,856/- the sum payable u/s 156 of the Act in consequence of the impugned assessment, in as much as the tax has been computed on Rs. 57,76,910/- whereas the total income has been assessed at Rs. 5,42,880/-. Without prejudice, prayed that the demands deserves to be modified and cancelled." 9. That, without prejudice to ground No. 1 to 3, on the facts, the case the Ld. CIT(A), NFAC has grossly erred on facts and in law in confirming the addition Rs. 5,42,880/- by not allowing deduction u/s....