TaxTMI 
TaxTMI 
2025 (6) TMI 213
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....ome-tax Act, 1961, for Assessment Year 2018-19. 2. The Assessee has taken the following grounds of appeal:- 1. The CIT(A) erred in law and on facts in dismissing the appeal on technical ground-in the return of income, claim of deduction was made by selecting section 80P(2) (f) instead of 80P(2)(d) of the I.T. Act, without considering facts of the case. 2. The CIT(A) erred in law and on facts in confirming disallowance of deductions amounting to Rs. 2,10,583/-, interest received from Co-Op. Bank which is exempt U/s 80P(2)(d) of the IT Act. 3. The CIT(A) erred in law and on facts in confirming not allowing exemption amounting to Rs. 1,50,000/-, transfer fees received from members which is claimed as exempt on Mut....
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....be treated as co-operative societies for the purpose of allowing deduction u/s.80P(2)(d) of the Act. We find that this issue stands settled by the order of the Hon'ble Jurisdictional High Court in the case of PCIT Vs. Ashwinkumar Arban Co-Operative Society Ltd, [2024] 168 taxmann.com 314 (Gujarat). For the sake of ready reference, snippets of the said order is reproduced below:- "Section 80P, read with section 263 of the Income-tax Act, 1961 Deductions Income of co-operative societies (Interest from co- operative bank) Assessment year 2018-19- Principal Commissioner invoked revisional powers under section 263 on ground that Assessing Officer had allowed deduction on interest earned by assessee, a cooperative society, from investmen....
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....ld that the deduction under section 80P(2)(d) is available to the cooperative societies on the income earned as interest on the investment made with the cooperative bank which in turn, is a cooperative society itself. [Para 28] * Reliance placed by the revenue on decisions of the Karnataka High Court in Totgars' Cooperative Sale Society (2017) 395 ITR 611 and Supreme Court in case of Totgars Cooperative Sale Society Ltd v. Income Tax Officer 322 ITR 283 (S.C), the Karnataka High Court appears to have taken into consideration the amendment in section 194A(3)(v) wherein the cooperative bank is excluded from the applicability of tax to be deducted at source. However, it appears that the interpretation made by the Karnataka High Court ....
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....is also a cooperative society from the total income. [Para 30] * The Apex Court in case of Kerala State Co-operative Agricultural & Rural Development Bank Ltd. v. Assessing Officer in 458 ITR 184 while considering various provisions of the Banking Regulation Act read with provisions of the Income Tax Act has held that the provision of section 80P(4) would not be applicable to a cooperative bank which is not a bank as per the provisions of the Banking Regulation Act, 1949.[Para 31] * In view of the above the provisions of section 80P(2)(d) would be applicable in the facts of the case and the Principal Commissioner was not justified in invoking revisional powers under section 263 which is rightly reversed by the Tribunal hol....