TaxTMI 
TaxTMI 
2025 (8) TMI 1885
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....d ['Ld. CIT(A)'] u/s 250 of which in turn arose out of order of assessment passed u/s 143(3) of the Act by the Income Tax Officer, Ward-1(5), Panaji, Goa ['Ld. AO'] for the assessment year 2017-18 ['AY']. 2. The long and short of the case is that; the assessee is an employee's Co-Operative Credit Society and filed its return ['ITR' hereafter] declaring total income of Rs.NIL/- on 31/03/2019 after claiming therein Rs.3,94,466/- as deduction u/s 80P(2)(d) u/s VI-A of the Act. The said return vide notice u/s 143(2) of the Act dt. 20/09/2019 was selected for scrutiny wherein following deductions claimed in the return were denied and the consequential assessment u/s 143(3) of the Act was framed determining income at Rs.3,94,466/- owni....
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.... [2025, 74 CCH 105 (Pan)], wherein the Ld. Co-Ordinate bench after elaborate analysis of provisions of section 80P(4) qua 80P2(d), allowed the appeals of the assessee holding that the provisions of section 80P(4) shall apply to claimant assessee bank and said provisions shall have no application to the assessee co operative society which was in receipt of income from the co operative bank which per-se is a registered society. The relevant adjudication dilated at para 5 to 6 is reproduced hereinafter as; 5. From the facts solidified by the rival party's submission we note that, there is no dispute that the assessee is a co-operative society and is entitled to claim deduction u/s 80P(2)(a)(i)/(d) of the Act. Further there is much les....
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....f all, we are mindful to state that, the allowability of deduction u/s 80P(2)(d) of the Act against the interest on deposits & dividend from shares held by one co-operative society with another co-operative society is no-more res-integra. Secondly the provisions of s/s (4) of section 80P of the Act applies to claimant assessee which is co-operative bank as defined in Part V of the Banking Regulation Act, 1949 ['BRA' hereafter]. 7. Now coming to allowability of deduction u/s 80P(2)(d) of the Act is concerned, a bare perusal said provision of the Act clearly hint sites that an interest & dividend income derived by one co-operative society from its investment (irrespective of nature) held with other co-operative society is eligible fo....
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....the class within which they fall or registered. 8. Conversely, where an assessee is a co-operative society & is not a co-operative bank within the meaning of explanation (a) to section 80P(4) of the Act and a payer of interest/dividend is also a co-operative society then in our considered view irrespective of status of a payer falling within the meaning assigned to it in Part V of BRA as to co-operative bank or not, a recipient assessee society's right to deduction u/s 80P(2)(d) of the Act cannot infringed by application of s/s (4) thereof. Going a step further it is also mindful to note here that, the language of s/s (4) of section 80P of the Act unambiguously capable of suggesting that it only comes into play when a claimant asse....
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....tion of s/s (4) of section 80P of the Act and in denying the 80P(2)(d) deduction to the appellant. 10. A similar view can also be traced in the adjudication of Ld. Co-ordinate bench in 'Alaknanda Sahakari Gruharachana Sanstha Maryadit Vs ITO' [2024, TaxPub(DT) 4845 (Pune-Trib)] wherein the claim for deduction u/s 80P(2)(d) of the Act was denied to the assessee by implication of s/s (4) of section 80P of the Act against interest received by the assessee on its investment from Pune District Central Co-operative Bank. 11. In our considered view, once the claimant assessee falls outside the ambit of explanation (a) to section 80P(4) of the Act then denial of 80P(2) deduction would be contra-legem. This find fortified in case o....
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....) and 80P(2) and excluded only cooperative banks which are cooperative society and also possesses a licence from RBI to do banking business. Their Hon'ble Lordships have further held that, the limited object of section 80P(4) is to exclude Co-operative Banks that function at par with other commercial banks, therefore Section 80P(4) is relevant only where the claimant assessee is a cooperative bank and which claims a deduction u/s 80P(2) of the Act which is not the facts of the present case. The decision of the Hon'ble Karnataka High Court 'PCIT Vs Totagars Co-operative Sale Society' (supra) is distinguishable and in any case, the later decision of Hon'ble Supreme Court in case of 'Mavilayi Service Co-operative Bank Ltd'. (Supra) whe....