TaxTMI 
TaxTMI 
2025 (7) TMI 946
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....in the first instance cooperative societies 2. The learned CIT(A) erred in relying on the Supreme Court's decision in Totgar's Co-operative Sales Society Ltd. which judgment is delivered in the context of sec. 80P(2)(a)(i) and wherein it was held that interest on surplus funds deposited with banks bears the character of income from other sources and not business income, whereas the appellant has claimed deduction under sec. 80P(2)(d) which does not confine the deduction to business income. 3. The learned CIT(A) failed to appreciate that the mandate of sec. 80P(4) is to deny the benefit of sec. 80P to co-operative banks and not to other co-operative societies investing their funds in co-operative banks. 4. The learned CIT(A) erred in applying the principle of mutuality to the interest income without appreciating that the appellant never claimed that interest is exempt on the principle of mutuality. This interest was offered as income, however, in view of Sec 80P(2)(d) the deduction was claimed. Hence, the application of principle of mutuality is completely erroneous with respect to interest income.". 3. There is a delay of 668 days noted by the ....
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....tention to jeopardize the interest of Revenue, by delaying the filing of the present appeal and hence prayed for condoning the same. 3.1. We have considered the petition for condonation of the said delay along with an affidavit. Upon perusal of the same and hearing both sides, we deem it fit to condone the delay on the ground that there was sufficient cause for the said delay. Accordingly, we condone the delay to take up the matter for adjudication. 4. Brief facts of the case as culled out from records are that the assessee is a co-operative housing society and filed its return of income on 07.09.2012 reporting a total Income of Rs. 2,67,471/-. Assessee claimed a deduction under chapter VI-A of the Act, of the Interest income earned on deposits made with various co-operative banks. The return was processed u/s 143(1) of the Act by Central Processing Centre (CPC), Bengaluru. CPC rejected the claim of Rs. 29,58,400/- u/s 80P vide intimation dated 26.02.2013 and raised a demand of Rs. 9,36,610/- including interest u/s 234A, 234B and 234C of The Act. Aggrieved, assessee went in appeal before the ld. CIT(A). 5. In the present appeal, order passed by ld. CIT(A) is an ex-parte or....
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.... be involved in different activities; the Cooperative Society Bank is merely a variety of the Co-operative Societies. Thus the Cooperative Bank which is a species of the genus would necessarily be covered by the word "Co-operative Society". 9. Furthermore, even according to Section 56(i)(ccv) of the Banking Regulations Act, 1949, defines a primary Co-operative Society bank as the meaning of Co-Operative Society. Therefore, a Co-operative Society Ban. would be included in the words 'Co-operative Society'. 10. Admittedly, the interest which the assessee respondent had earned was from a Co-operative Society Bank Therefore, according to Sec. 80P(2)(d) of the IT. Act, the said amount of interest earned from a Co-operative Society Bank would be deductable from the gross income of the Co-operative Society inorder to assess it: total income. Therefore, the Assessing Officer was not justified in denying the said deduction to the assessee respondent. 11. The learned counsel has relied on the case of Totgars Co-operative Sale Society Ltd. v. IITO (2010) 322 ITR 283/188 Taxman 282 (SC). However, the said case dealt with the interpretation, and the deduction, ....
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.... would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. 10. We also find that the issue before us of whether a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) for the interest income derived from its investments held with a cooperative bank or not is covered in favour of the assessee not only by the decision of Hon'ble High Court of Karnataka referred above but also in plethora of cases including few of the following cases: (i) Land and Cooperative Housing Society Ltd. v. ITO (2017) 46 CCH 52 (Mum) (ii) C. Green Cooperative Housing and Society Ltd. v. ITO 21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31.03.2017 (iii) Marvwanjee Cama Park Cooperative Housing Society Ltd. v. ITO Range-20(2)(2), Mumbai (ITA No. 6139/Mum/2014, dated 27.09.2017. 10.1. In a recent decision by the coordinate bench of ITAT Mumbai in the case of Ashok Tower "D" Co. Op. Housing Society Ltd. vs. ITO [2024] 161 taxmann.com 518 (Mumbai - Trib.), this has been dealt with extensively. Relevant extracts are as under: "We further find that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income ....
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....ed 15.01.2016, would also not be of any assistance, for the reason that in the said matter the Tribunal had set aside the issue to the file of the assessing officer for fresh examination. That as regards the reliance placed by the ld. D.R on the judgment of the Hon'ble High Court of Karnataka in the case of Pr. CIT v. Totagars co-operative Sale Society [2017] 83 taxmann.com 140/297 CTR 158/395 ITR 611 (Karnataka), the High Court had concluded that a cooperative society would not be entitled to claim of deduction under Sec. 80P(2)(d). We however find that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. v. Siemens India Ltd. and Anr [1983] 36 CTR 197/[1985] 156 ITR 11/[1983] 15 Taxman 594 (Bombay), where there is a conflict between the decisions of non-jurisdictional High Court's, then a view which is in favour of the assessee is to be preferred as against that taken against him. Thus, taking support from the aforesaid judicial pronouncement of the Hon'ble High Court of jurisdiction, we respectfully follow the view taken by the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. v. Totagars Coop....