TaxTMI 
TaxTMI 
2026 (2) TMI 209
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....lows: - 3. The Appellant is a Co-operative Housing Society thus a non-profit / non-commercial entity. The Appellant Society does not have any staff/employee whatsoever and is being managed by the Honorary Office Bearers. Further the Appellant Society being a small Housing Society, does not have regular professional who can advise them for such tax matters. All the Office Bearers of the Appellant Society are senior citizens and retired persons and thus were unable up to keep-up and cope-up with the knowledge and efforts required for appealing against the subject Order. The details of Office Bearers who are looking after the affairs of the Appellant Society is given here below: Name of Member Position held Date of Birth Age Mukesh C. Shah Chairman 04.11.1950 75 Chandrakant D. Shah Hon. Secretary 18.01.1945 80 Jayesh H. Shah Hon. Treasurer 14.05.1955 70 4. I say that the Office Bearers of the Appellant Society were not aware of the provision of appeal available under the Income-tax Act, 1961 against the Order of CIT (Appeals) Order and also of the relevant procedures of such Appeal. 5. Further in the earlier A.....
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....- "1. General Ground: On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals) erred in upholding the action of the Centralized Processing Centre (CPC), Bengaluru in disallowing deduction of Rs. 1,79,222/- being Interest income received as follows, claimed u/s. 80P(2)(d) of the Income Tax Act, 1961. Sr. No Particular Amount (Rs.) 1 Mumbai District Central Cooperative Bank Limited (MDCC) - Interest on Sinking Fund FD 1,19,195/- 2 Saraswat Co-operative Bank Ltd. - FD Interest 56,571/- 3 Mumbai District Central Cooperative Bank Limited (MDCC) - Saving Bank Interest 3,456/- Total 1,79,222/- 2. Improper Disallowance under Section 143(1): The Learned CIT(A) erred in not appreciating that the CPC has no jurisdiction to make any such adjustment u/s 143(1)(a), as the disallowance of deduction u/s 80P(2)(d) does not fall within the scope of prima-facie adjustments contemplated under the said provision and before passing Order u/s. 143(1) the proposed adjustments were not intimated to the Appellant as envisaged by the Proviso of Section 143(1)(a). ....
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....ecognised as income of the society. Thus, during the assessment year 2020-21, the assessee earned interest income of INR 1,79,222 from its deposits maintained with the Co-operative Banks, viz. Mumbai District Central Cooperative Bank Ltd and Saraswat Cooperative Bank Ltd, and the same was claimed as a deduction under section 80P(2)(d) of the Act, which was denied by the lower authorities. 9. We find that while deciding a similar issue, the Coordinate Bench of the Tribunal in Pathare Prabhu Co-operative Housing Society v/s ITO, reported in (2023) 202 ITD 464 (Mum-Trib), held that interest income earned from investment with Co-operative Bank is eligible for deduction under section 80P(2)(d) of the Act. The relevant findings of the coordinate bench, in the aforesaid decision, are reproduced as follows: - "8. We have considered the submissions of both sides and perused the material available on record. The only dispute raised by the assessee is against the disallowance of deduction under section 80P(2)(d) of the Act in respect of interest income received from the Co-operative Banks. The assessee is a registered Co-operative Housing Society and during the assessment year 201....
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....n 80P(2)(d) of the Act. The AO denied the deduction under section 80P(2)(d) of the Act on the basis that the Co-operative Bank is covered under the provisions of section 80P(4) of the Act. We find that the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 123 taxmann.com 161/279 Taxman 75/431 ITR 1 while analysing the provisions of section 80P(4) of the Act held that section 80P(4) is a proviso to the main provision contained in section 80P(1) and (2) and excludes only Co-operative Banks, which are Co-operative Societies and also possesses a licence from RBI to do banking business. The Hon'ble Supreme Court further held that the limited object of section 80P(4) is to exclude Co-operative Banks that function at par with other commercial banks i.e. which lend money to members 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 u....
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....een 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 bank pursuant to the insertion of Sub-section (4) of sec. 80P would no more be entitled for claim of deduction under sec. 80P of the Act, but however, 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 enforced in any state for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held 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 inter....