TaxTMI 
TaxTMI 
2024 (9) TMI 577
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act"] for the Assessment year [A.Y.] 2018-19, wherein learned CIT(A) has dismissed assessee's appeal with the direction to AO for adjustment of proportionate cost, administrative and other expenses incurred in earning interest income. 2. The brief facts state that the appellant Blue Rose Industrial Premises Co-operative Society Limited is an industrial premises co-operative society whose main object is to manage, maintain and administer the property of the society and to raise funds for the management, maintenance and administration of activities from the members of the society. The appellant society filed its return of income for A.Y. 2018-19 on 30.10.2018 declaring income of Rs. 2,43,620/- after claiming a deduction of Rs. 37,45,701/- u/s. 80P of the Act. Subsequently, the assessee filed revised return on 31.10.2018 declaring the same income and claiming the similar deduction as stated above. The case was selected for limited scrutiny under CASS and statutory notices u/s. 143(2) and u/s. 142(1) of the Act were issued and served upon the assessee for furnishing details of claim of deduction u/s. 80P(2)(d) of the Act. It was noticed from the submissions of the assessee that it was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hus, submits that the assessee is entitled to the benefit of section 80P(2)(d) of the Act and prayed to set aside the impugned order and allow the appeal. 9. Per contra, learned DR has opposed the assessee's prayer for the condonation of said delay of 201 days in filing the appeal and vehemently supported impugned order on merits. 10. We notice that appellant has filed an application for the condonation of delay on the ground that though the impugned order was received by the assessee on 14.08.2023 but the appeal could not be filed within limitation period, stating that the society's manager, failed to inform the managing committee/chartered accountant of the appellant society. Mr. Yogesh Kantilal Doshi, Honorary secretary of the appellant society has also filed an affidavit in support there of. In the interest of justice and fair play, we condone the said delay of 201 days. 11. Coming on to the merits of the case, the definitions of the "co-operative society" under the Income Tax Act 1961 read as under: "section 2(19) of the Income Tax Act 1961 " 'Co-Operative Society' means a co-operative society registered under the Co-operative societies Act 1912 ( 2 of 1912), or under a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... For the issue that was before the Income-tax Appellate Tribunal, was a limited one, namely whether for the purpose of section 80P(2)(d) of the Act, a co-operative bank should be considered as a co-operative society or not? For, if a co-operative bank is considered to be a co-operative society, then any interest earned by the co-operative society from a co-operative bank would necessarily be deductible under section 80P(1) of the Act. 8. The issue whether a co-operative bank is considered to be a co-operative society is no longer res integra. For the said issue has been decided by the Income-tax Appellate Tribunal itself in different cases. Moreover the word "co-operative society" are the words of a large extent, and denotes a genus, whereas the word "co-operative bank" is a word of limited extent, which merely demarcates and identifies a particular species of the genus co-operative societies. Co-operative society can be of different nature, and can be involved in different activities; the co-operative bank is merely a variety of the co-operative societies. Thus the co-operative bank which is a species of the genus would necessarily be covered by the word "co-operative society". ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ided on 27.07.2023 (2023) 153 taxmann.com 714 (Mum. Trib.) dealt with identical issue "as to whether the interest/dividend income earned from Co-operative Bank is allowable as deduction under section 80P(2)(d) of the Act or not" and ultimately allowed the deduction claimed as interest/dividend income earned from Co-operative Bank u/s 80P(2)(d) of the Act . For clarity and ready reference, conclusion drawn by the Hon'ble Co-ordinate Bench of the Tribunal in the case of Pathare Prabhu Co-operative Housing Society Ltd. (supra) is reproduced herein below: "9. Before proceeding further, it is relevant to note the provisions of section 80P of the Act under which the assessee has claimed the deduction in the present case. As per the provisions of section 80P(1) of the Act, the income referred to in sub-section (2) to section 80P shall be allowed as a deduction to an assessee being a Co-operative Society. Further, section 80P(2)(d) of the Act, reads as under: "80P. Deduction in respect of income of co-operative societies. (1) ** ** (2) The sums referred to in sub-section (1) shall be the following, namely:- (a) to (c)** ** ** (d) in respect of any income by way of interest or d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mbers of the public. Thus, we are of the considered view that section 80P(4) of the Act is of relevance only in a case where the assessee, who is a Co-operative Bank, claims a deduction under section 80P of the Act which is not the facts of the present case. Therefore, we find no merits in the aforesaid reasoning adopted by the AO and upheld by the learned CIT(A) in denying deduction under section 80P(2)(d) of the Act to the assessee. 12. As regards the claim of deduction under section 80P(2)(d) of the Act, it is also pertinent to note that all Co-operative Banks are Co-operative Societies but vice versa is not true. We find that the coordinate benches of the Tribunal have consistently taken a view in favour of the assessee and held that even the interest earned from the Co-operative Banks is allowable as a deduction under section 80P(2)(d) of the Act. In Kaliandas Udyag Bhavan Premises Co-op Society Ltd. v. ITO [2018] 94 taxmann.com 15 (Mum.)/[ITA No. 6547/Mum./2017, dated 25-4-2018], while dealing with the provisions of section 80P(2)(d) vis-à-vis section 80P(4) of the Act, the coordinate bench of the Tribunal observed as under: 7....... Thus, from a perusal of the afo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d with a co- operative bank, would be entitled for claim of deduction under sec.80P(2)(d) of the Act." 13. We find that the learned CIT(A) has placed reliance upon the decision of the Hon'ble Karnataka High Court in Pr. CIT v. Totagars Co-operative Sales Society [2017] 83 taxmann.com 140/395 ITR 611, wherein it was held that interest earned by the assessee, a Co-operative Society. from surplus deposits kept with a Co-operative Bank, was not eligible for deduction under section 80P(210) of the Act. We find that in an earlier decision the Hon'ble Karnataka High Court in Pr. CT v. Totagars Co-operative Sale Society (2017) 78 taxmann.com 169/392 ITR 74 held that according to section 80P(2)(d) of the Act, the amount of interest earned from a Co-operative Society Bank would be deductable from the gross income of the Co-operative Society in order to assess its total income. Thus, there are divergent views of the same Hon'ble High Court on the issue of eligibility of deduction under section 80P(2)(d) of the Act in respect of interest earned from Co-operative Bank. No decision of the Hon'ble jurisdictional High Court was brought to our notice on this aspect. We have to, wi....