2025 (2) TMI 1477

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....the outset, it is noted that there is a delay of 86 days in filing of this appeal. The assessee has filed an affidavit explaining the cause for the delay. After going through the contents of the affidavit and the reason for condonation of delay, we find that there was sufficient cause for the delay and therefore, we condone the delay and proceed to hear the appeal on merits. 3. The main grievance of the assessee is against the action of the Ld.CIT(A) confirming the action of the AO denying the deduction of interest income from investments made in Salem District Central Cooperative Bank amounting to Rs. 41,92,145/-. 4. The brief facts are that the assessee society filed its return of income for the assessment year 2020-21 declaring 'ni....

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....t the Ld.CIT(A) erred in observing that assessee received interest income from investments made in nationalized banks. Having said so, we note that the Ld.CIT(A) confirmed the disallowance of Rs. 41,93,070/- u/s.80P(2) of the Act, by citing few decisions, which are not applicable to the facts of the assessee's case. Therefore, we, do not agree to the impugned action of the Ld.CIT(A). As noted the assessee had received interest of Rs. 41,93,070/- from Salem District Cooperative Bank and has disallowed the claim of the assessee, which action we don't countenance. Relevant provisions of Sec.80P(2)(d) of the Act reads as under: Deduction in respect of income of co-operative societies. 80P.(1) Where, in the case of an assessee ....

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....th Salem District Co-operative Bank / Society is exempt under sub-clause (d) of sub-section 2 of section 80P of the Act. Hence, we are of the considered view that interest earned by assessee from another Co-operative Society, which in this case a Co-operative Society/Bank is eligible u/s.80P(2)(d) of the Act; unless the Ld.CIT(A)/AO could show that the Co-operative Bank (from which assessee earned interest on its deposits) possess a license from the RBI to do banking business with the public, the deduction cannot be denied; and for such a proposition, we rely on the decision of the Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. & Others. V. CIT reported in [2021] 431 ITR 1 (SC). Therefore, we hold that unless t....