2025 (2) TMI 165

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....f order 06/09/2024, for both the appeals. The impugned order was emanated from the order of the Ld.CPC, Bengaluru, passed under section 154 of the Act, date of order 26/11/2022 for A.Y. 2020-21 and dated 22/11/2022 for A.Y. 2021-22. 2. Both the appeals have same nature of facts and a common issue. Therefore, both the appeals were clubbed together, heard together, and are disposed of by this common order and ITA No.5691/Mum/2024 is taken as the lead case. ITA 5621/Mum/2021 2.1 The assessee has taken the following grounds of appeal: - "1. The learned Commissioner of Income Tax (Appeals) grossly erred in not considering rectification order u/s 154 of the Income Tax Act, 1961 as an appealable order even though the tax liabilit....

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.... 3. The matter brought before the Bench pertains to the deduction claimed under Section 80P of the Act, concerning interest income of Rs. 3,20,990/- received from cooperative banks. The assessee, a Cooperative Housing Society, had invested funds in two cooperative banks, namely Saraswat Cooperative Bank and Maharashtra State Cooperative Bank, and earned interest income accordingly. The assessee duly claimed the deduction under Section 80P(2)(d) of the Act in its Return of Income (ROI) filed under Section 139(1). However, during the processing of the return under section 143(1) of the Act, the claim for deduction under Section 80P(2)(d)was disallowed. Subsequently, the assessee filed a rectification petition under Section 154 of the Act, wh....

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....ever, at the same time, we are unable to subscribe to his view that the aforesaid amendment would jeopardies the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its interest income investments/deposits parked with a cooperative bank. In our considered view, as long as it is proved that the interest income is being derived by a cooperative 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 find that the term cooperative society" had been defined under Sec. 2(19) of the Act, as under:- "(19) "Cooperative society" means a cooperative society registered under the Cooperative Societie....

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....ty Ltd. Vs. ITO, 21(2)(1), Mumbai. We further find that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon'ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), had held, that the interest income earned by the assessee on its investments with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28.12.2006, also makes it clear beyond any scope of doubt that the purpose behind enactment of sub-section (4) of Sec. 80P was that the co-operative banks which were functioning at par with oth....