TaxTMI 
TaxTMI 
2025 (3) TMI 1859
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....affidavit of on record and oral submissions made by the ld.AR, it is pleaded that the delay was mainly on account of the fact that wife of the Chairman who is also one of the directors is suffering from lung cancer which requires regular follow up, treatment and therapy and the Chairman who looks after all legal matters could not take immediate decision and resultant delay in appointment of consultant. After his appointment, the CA was also suffering from various illnesses because of which he also could not look after the regular work. All these reasons resulted in delay. There is no malafide intention not any advantage available to the assessee by causing such delay which may be condoned. 3. We have duly considered the issue and find some merit in the contentions. We have also gone through medical documents filed in support of the above submissions. However, it is equally true that there is substantial delay in both the years which also indicates some element of carelessness on part of the assessee who must have other persons in responsible position to look after income tax issues. It is the fundamental duty of the assessee to diligently pursue the appeal and comply with the no....
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....on cannot be sustained u/s 143[1] in case of deduction u/s 80P(2)(d). 4. In the facts and circumstances of the case and in law, the learned A.O. erred in wrong charging interest u/s 234A, B & C and levying penalty u/s 270A. 5. Facts of the case in brief are that the assessee is a Cooperative Credit Society registered under the Maharashtra Co-Operative Societies Act 1960, carrying on banking business and providing banking facilities to its members. It accepts deposits from its members and gives loan to its members. The assessee filed return of income for the AY 2018-19 disclosing gross total income of Rs. 2,11,86,994/- and have claimed deduction under chapter VIA of Rs. 2,11,08,184/-comprising of deductions u/s 80P(2)(a)(i) of Rs. 1,67,43,337/- and 80P(2)(d) of Rs. 43,14,847/-respectively. The Ld. AO disallowed the deductions. 6. In so far as the claim of deduction u/s 80P(2)(a)(i), the AO held that in view of the provisions of section 80P(4),the assessee being engaged in banking activity was not eligible for deduction although it was observed that there is no dispute about the fact that the assessee is carrying on the business of accepting deposits and advancing loan....
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....t of our society is to accept the deposits from Members, to advance Loans to members from the deposits gathered and/or invest as per the provision of Maharashtra Co-op Societies Act 1961. Being a credit society, all activities may be similar to any Cooperative bank, but not exactly as a bank. Section 5(b) of the Banking Regulation Act, 1949, which defines banking business' as under:- "(b) "banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft order or otherwise." As per above definition banking business means accepting for the purpose of lending or investment of deposits of money from the public repayable on demand or otherwise which is withdrawable by cheque, draft, order or otherwise. 7.1 It was further stated that it being the credit society, accepted money from Member only and as per our bye laws we are not allowed to deal with the non-members. This fact is also required to be confirmed by the Statutory Auditor appointed under Maharashtra Co-op Societies Act to Registrar of Societies. The copy of Statutory Audit Report was filed. As per the assessme....
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....ct would not apply to it. Further, for ready reference we are also submitting the recent few case laws of Tribunal, Hon'ble High courts & Supreme Court where it has been held that for augmenting the co-operative sector the deduction under section 80P has been prescribed by the Govt. The restriction provided for deductions under section 80P(4) applies to Co-operative banks & not co-operative societies. The Co-operative credit society can claim deduction u/s 80P(2)(a)(i) as well as 80P(2)(d) of the Act. Copies of all such decisions is enclosed herewith for your record their all the decisions are came after amendment of Section 80P & section 2(24)(viia) w.e.f. 2007. 7.4 As regards deduction u/s 80P(2)(d) from Interest earned from other Co-operative banks, it was stated that Co-operative banks are also first register themselves under Cooperative Act may be central or State Act and thereafter obtain license from Reserve bank of India. Hence Co-Op banks are also primarily Co-op Societies. During the year the assessee earned interest from Thane District Central Co-op. bank Ltd., Bassein Catholic Co-op bank Ltd, Municipal Co-op bank Ltd. Hence Interest earned from the Co-op bank is ....
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....P(1) of the Act, the income referred to in sub-section (2) to section 80P shall be allowed as a deduction to an assessee being a Co-operative Society. Further, section 80P(2)(d) of the Act, reads as under. "80P. Deduction in respect of income of co-operative societies. (1) ** ** ** (2) The sums referred to in sub-section (1) shall be the following, namely: (a) to (c) ** ** ** (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income;" 10. Thus, for the purpose of provisions of section 80P(2)(d) of the Act, two conditions are required to be cumulatively satisfied (i) income by way of interest or dividend is earned by the Co-operative Society from the investments, and (ii) such investments should be with any other Co-operative Society. Further, the term "co-operative society" is defined under section 2(19) of the Act as under. "(19) co-operative society means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in a....
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....y taken a view in favour of the assessee and held that even the interest earned from the Co-operative Banks is allowable as a deduction under section 80P(2)(d) of the Act. In Kaliandas Udyag Bhavan Premises Co-op Society Ltd. v. ΠΟ (2018) 94 taxmann.com 15 (Mum.)/(ITA No. 6547/Mum./2017, dated 25-4-2018), while dealing with the provisions of section 80P(2)(d) vis-a-vis section 80P(4) of the Act, the coordinate bench of the Tribunal observed as under: 7....... Thus, from a perusal of the aforesaid sec. 80P(2)(d) it can safely be gathered that income by way of interest income derived by an assessee co-operative society from its investments held with any other cooperative society, shall be deducted in computing the total income of the assessee. We may herein observe, that what is relevant for claim of deduction under sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other cooperative society. We though are in agreement with the observations of the lower authorities that with the insertion of sub-section (4) of sec. 80P, vide the Finance Act, 2006, with effect from 1-4-2007, th....
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....74 held that according to section 80P(2)(d) of the Act, the amount of interest earned from a Co-operative Society Bank would be deductable from the gross income of the Co-operative Society in order to assess its total income. Thus, there are divergent views of the same Hon'ble High Court on the issue of eligibility of deduction under section 80P(2)(d) of the Act in respect of interest earned from Co-operative Bank. No decision of the Hon'ble jurisdictional High Court was brought to our notice on this aspect. We have to, with our highest respect to both the views of the Hon'ble High Court, adopt an objective criterion for deciding as to which decision of the Hon'ble High Court should be followed by us. We find guidance from the judgment of the Hon'ble Supreme Court in CIT v. Vegetable Products Ltd. [1973] 88 ITR 192. In the aforesaid decision, the Hon'ble Supreme Court has laid down a principle that "if two reasonable constructions of a taxing provisions are possible, that construction which favours the assessee must be adopted". 14. Therefore, in view of the above, we uphold the plea of the assessee and direct the AO to grant the deduction under sec....
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.... the whole of such income is required to be granted as deduction. 11. Moreover, law is now well settled that any co- operative credit society is not holding banking license is eligible for deduction u/s. 80P(2)(d) in view of the Hon'ble Supreme Court Judgment in the case of Citizen Co- operative Society Ltd. vs ACIT in Appeal No.10245 of 2017 dated 08/08/2017; and The Mavilayi Service Cooperative vs. Commissioner of Income Tax in Civil Appeal No.8315 of 2019 dated 12/01/2021. 12. Considering the detailed discussion in the preceding para, legal position emerging from the cited decisions of various courts of law, the decision of co-ordinate bench in assessee's own case for AY 2017-18(supra),we are of the considered view that the assessee is eligible for claim of deduction u/s.80P(2)(a)(i) and also u/s 80P(2)(d).Accordingly, we set aside the appellate order and direct the ld.AO to allow the deductions claimed by the assessee. Thus, ground no.1 to 3 are allowed. Ground no.4 is academic in view of our decision in the above para deleting the disallowance of deductions claimed u/s 80P. ITA No. 106/MUM/2025 (A.Y. 2020-21) 1. In the facts and circumstances of the case ....