2023 (7) TMI 1382 - AT - Income Tax

Deduction u/sec. 80P(2)(d) - interest income - HELD THAT - As decided in LOKMANGAL NAGRI SAHAKARI PATH SANSTHA MARYADIT VERSUS PCIT-4, PUNE. 2022 (12) TMI 355 - ITAT PUNE interest income earned on the investment of surplus money with banks is also eligible for exemption u/s. 80P(2)(a)(i). Decided in favour of assessee.

Summary

Issues involved:
1. Deduction u/s 80P(2)(d) regarding interest income.
2. Deduction u/s 80P(2)(c).
3. Deduction u/s 80P(2)(a)(i).
4. Delay in filing appeals.

Summary:

1. Deduction u/s 80P(2)(d) regarding interest income:
In ITA No. 204/PAN/2019 for A.Y. 2015-16, the primary issue pertains to the deduction u/s 80P(2)(d) of the Act regarding interest income. The Tribunal noted that this matter is covered by the earlier decision of the Pune Tribunal in the case of Lokmangal Nagri Sahakari Path Sanstha Maryadit v. PCIT, where it was held that interest income earned by a cooperative society from cooperative banks qualifies for deduction u/s 80P(2)(d). The Tribunal observed that the facts in the present case are identical and similar to those in the Pune Tribunal's decision, and thus, the grounds of appeal on this issue stand allowed.

2. Deduction u/s 80P(2)(c):
Ground No. 5 in ITA No. 204/PAN/2019 related to the deduction u/s 80P(2)(c). However, the Tribunal noted that this ground did not arise from the assessment order, and the assessee could not demonstrate its relevance. Consequently, this ground was dismissed.

3. Deduction u/s 80P(2)(a)(i):
In ITA No. 295/PAN/2019 for A.Y. 2015-16, the issue was regarding the deduction u/s 80P(2)(a)(i). The Tribunal upheld the CIT(A)'s decision to remand the matter to the AO for verification, noting that the assessee conceded to this direction. Therefore, the ground of appeal on this issue was dismissed.

4. Delay in filing appeals:
In ITA Nos. 267 & 268/PAN/2019, there was a delay of 150 days in filing the appeals. The Tribunal condoned the delay, noting that it was due to circumstances beyond the control of the assessee and was not deliberate or intentional. The appeals were then heard on merits.

Conclusion:
The Tribunal allowed ITA Nos. 204 & 295/PAN/2019 partly and ITA Nos. 80/PAN/2020, 248, 267 & 268/PAN/2019 fully, based on the judicial precedents favoring the assessee's claims for deductions u/s 80P(2)(a)(i) and 80P(2)(d). The orders passed by the PCIT/CIT(A) were not sustained.

Order pronounced in open Court on 05th July, 2023.