TaxTMI 
TaxTMI 
2025 (5) TMI 18
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....us dividend received from co-operative bank Rs. 61/- totaling in all to Rs. 15,22,825/- without appreciating that Co-operative Banks are also registered under Maharashtra Co-operative Societies Act, 1960 and as such Interest Income derived by the Appellant is eligible for deduction U/s 80P(2)(d) of the Act and therefore disallowance ought to be deleted. 2. The Id C.I.T. (A) erred in not granting the relief U/s 80P(2)(d) despite the fact that the Society is eligible for Deduction under Chapter VIA r.w.s. 80AC of the Act insofar as the Return of Income was filed within the due date prescribed U/s 139(1) of the Act. 3. The Id CIT(A) has reproduced the observations of the AO in para 16 on page 5 of the order u/s 143(3) dated 04.11.2019 in Para 4.3 point no 16 of Page 3 of the order u/s 250 dated 12.12.2024 that the income claimed as a deduction was earned mainly from investments with co-operative banks 4. The Appellant craves leave to add, amend, alter, vary and/or rescind or withdraw any or all the above grounds of Appeal." 3. The brief facts of the case is that the assessee is a co-operative housing society and filed the return by declaring gross total income NIL after claimin....
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....nt to 80P(4) would jeopardise the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its interest income on investments/deposits parked with a co-operative bank. In our considered view, 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 find that the term "cooperative society" had been defined under Sec. 2(19) of the Act, as under:- "(19) "Co-operative society" means a cooperative 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;" We are of the considered view, that though the co-operative banks pursuant to the insertion of subsection (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a co-operative bank continues to be 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 for....
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.... of section u/s 80 P(2)(d) of the Act. The assessee in the present scenario claiming the amount of Rs. 15,22.825/- as a deduction by arguing that the interest eamed by it is from investments in a co-operative bank... ............11. This argument of the assessee is not acceptable, especially in view of the provisions of 80P(4) inserted by the Finance Act 2006 w.e.f. 01/04/2007, which specifically excludes co-operative banks from the definition of co operative societies. What Section 80P (2)(d) of the Act, envisages is that such interest or dividend earned by an assessee co-operative society should be out of the investments with any other co-operative society. The words Co-operative Banks' are missing in clause (d) of subsection (2) of Section 80P of the Act. Even though a co-operative bank may have the corporate body or skeleton of a co-operative society but its business is entirely different and that is banking business, which is governed and regulated by the provisions of the Banking Regulation Act, 1949 Only the Primary Agricultural Credit Societies with their limited work of providing credit facility to its members continued to be governed by the ambit and scope of deduct....
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....made by the A.O. is confirmed." 6. We heard the rival submissions and considered the documents available on the record. It is argued that the issue is well settled by the Hon'ble Apex Court and by the ITAT, Mumbai Benches that a co-operative bank is in the nature of co-operative society. So the interest and dividend earned by the assessee from the co-operative bank is eligible for deduction under section 80P(2)(d) of the Act. The same issue was dealt by the co-ordinate bench of ITAT-Mumbai, F-Bench in the case of Jaimuni Sahkari Patpedhi Maryadit in ITA Nos 332 to 334/Mum/2025 order dated 06/03/2025, wherein it has been held as follows:- "6. We heard the rival submissions and considered the documents available on record. The only issue as agitated by the assessee society related to interest and dividend from co-operative banks which is claimed as deduction under section 80P(2)(d) of the Act. The Ld. CIT(A) in his order had referred the judgement of Hon'ble High Court of Gujarat in the matter of Katlary Kariyana Merchant Sahkari Sarafi Mandali Ltd v. ACIT [2022] 140 taxmann.com 602 (Gujarat) wherein the deduction of 80P(2)(d) were not allowed to the appellant. The Ld. AR distingu....
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....eing a cooperative society, earning interest on investment made with a cooperative bank and claiming deduction under section 80P(2)(d), deduction was to be allowed under section 80P(2)(d). 8. Further the Ld. AR respectfully relied on the order of the Hon'ble Supreme Court in PCIT Vs Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited, Civil Appeal No. 8719/2022 dated 20/04/2023 it is held that, "............Even otherwise, on merits also and taking into consideration the CBDT Circulars and even the definition of Bank under the Banking Regulation Act, the respondent/Assessee cannot be said to be Co-operative Bank/Bank and, therefore, Section 80(P)(4) shall not be applicable and that the respondent/Assessee shall be entitled to exemption/benefit under Section 80(P)(2) of the Income Tax Act." The reliance was placed in the order of the Hon'ble Supreme Court in Kerala State Co-Operative Agricultural And Rural Development Bank Ltd. KSCARDB vs. Assessing Officer, [2023] 458 ITR 384 (SC), it has been held that, "15.14............... Conclusion: In the instant case, although the appellant society is an apex cooperative society within the meaning of the State Act, 198....