2026 (5) TMI 1709

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....at the assessee is a credit cooperative society registered under the Maharashtra Co-operative Societies Act, 1960 and is engaged in the business of providing credit facilities to its members and accepting deposits from them. The return of income was filed on 05.01.2022 by declaring Nil income after claiming deduction of Rs. 26,65,65,814/- u/s 80P(2)(a)(i) of the IT Act. Vide intimation order dated 01.12.2022, the return was processed u/s 143(1)(a) of the IT Act and deduction u/s 80P(2)(a)(i) of the IT Act of Rs. 26,65,65,814/- was disallowed. Being aggrieved the assessee preferred an application for rectification u/s 154 of the IT Act before CPC. However, vide order dated 24.02.2023, CPC issued rectified intimation with no change. 3. Bei....

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....3(1) of the IT Act. 4. On the facts and in law the CIT (A) incorrectly allowed the illegal disallowance of legitimate deduction of section 80 P(2)(d) made u/s 143(1) when there is no such express provision in the Income tax Act. 5. The appellant craves, leave to add to alter, modify, revise, or delete any ground (s) in the interest of justice." 6. With regard to ground no.1 & 2, we find that the assessee has challenged the action of Ld. CIT(A) wherein he disallowed the deduction of Rs. 1,95,17,026/- u/s 80P(2)(d) of the IT Act being interest income earned from FDR made with Pune District Central Co-op. Bank Ltd. It is the contention of the assessee that with regard to interest income earned from FDR made with Pune Distr....

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....so qualifies for exemption u/s. 80P(2)(a)(i) as held by the Co-ordinate Bench of Pune Tribunal in the case of Nashik Road Nagari Sahkari Patsanstha Limited Vs. ITO in ITA No.1700/PUN/2017 wherein the Tribunal held as under :- "9. We heard the rival submissions and perused the material on record. Admittedly, the appellant is a Cooperative society formed under the provisions of Maharashtra Cooperative Societies Act,1960 with the objective of accepting deposits and lending money to its members. The money which is not immediately required for the purpose of lending to the members is deposited with Bank of Baroda in the form of Fixed Deposit. The question is whether the interest so earned qualifies for exemption u/s. 80P(2)(a)(i) of the....

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....averu Cooperative Rural Bank Ltd. v CIT [(2017) 396 ITR took a view that such interest income is attributable to the activities of the society and, therefore, eligible for exemption u/s. 80P(2)(a)(i) of the Act. The Coordinate Bench of Pune Benches in the case of M/s. Ratnatray Gramin Bigar Sheti Sah. Pat Sanstha Maryadit Vs. ITO (ITA Nos.559/560/PUN/2018, dated 11-12- 2018) has taken view in favour of the assessee following the judgment of Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). Respectfully following the decision of the Coordinate Bench, we hold that the interest income earned on the investment of surplus money with banks is also eligible for exemption u/s. 80P(2)(a)(i) of the....

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....and in law, the Ld. Addl. CIT(A) has erred ruling that the deduction u/s. 80P(2) (a) (i) was allowable without discussing/examining how the order sought to be rectified was erroneous within the strict and limited scope of section 154 of the Act. 2. On the facts and in the circumstances of the case and in law, the Ld. Addl. CIT(A) has erred in making decision on the limited legal issue of whether mistake made by the assessee while filing return of income can be rectified u/s. 154 of the Act. 3. The appellant craves leave to add to, amend, alter any of the above grounds of appeal." 11. With regard to above ground no.1, we find that time and again it has been held by various coordinate benches of this Tribunal that the ass....