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2022 (12) TMI 1162 - AT - Income TaxRevision u/s 263 - allowing of the deduction by the AO(s) u/s 80P is contrary to law - grant of deduction u/s.80P by the AO in respect of interest income earned from other credit cooperative societies or Nationalised banks led to the passing of erroneous assessment orders prejudicial to the interest of the Revenue - HELD THAT - Grant of deduction u/s.80P by the Assessing Officer (AO) in respect of interest income earned from other credit cooperative societies or Nationalised banks led to the passing of erroneous assessment orders prejudicial to the interest of the Revenue - HELD THAT - Pune Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit 2019 (4) TMI 682 - ITAT PUNE has decided the question of availability of deduction u/s 80P on interest income by noticing that the Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit 2015 (8) TMI 1085 - ITAT PUNE has allowed similar deduction. No direct judgment from the Hon ble jurisdictional High Court on the point having been pointed out, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon ble Karnataka High Court in the case of Tumkur Merchants Souharda Cred it Cooperative Ltd 2015 (2) TMI 995 - KARNATAKA HIGH COURT The position continues to remain the same before this Tribunal also. We thus hold that no exception can be taken to the granting of deduction on interest income by the AO u/s 80P(2)(a)(i) of the Act. Coming to the other cases involving deduction u/s.80P(2)(d) of the Act, it is crystal clear from the language of the provision that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessees are also Co-operative society registered under the Act and hence qualify for the grant of the deduction. Similar view has been taken by the Pune Tribunal in several cases including The Sesa Goa Employees Coop. Credit Society Ltd. 2022 (12) TMI 959 - ITAT PUNE . We hold that the impugned orders questioning the deduction u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income, cannot be sustained. Appeal allowed.
Issues:
Challenging order by PCIT u/s.263 for deduction u/s.80P, delay in filing appeals, ex parte proceedings, allowability of deduction u/s.80P(2)(a)(i) and 80P(2)(d). Analysis: 1. The appeals were filed against the orders passed by the Principal Commissioner of Income-tax (PCIT) u/s.263 of the Income-tax Act, 1961, questioning the grant of deduction u/s.80P by the Assessing Officer (AO) in relation to interest income earned from credit cooperative societies or Nationalised banks. The Tribunal consolidated the appeals due to the common issue for convenience. 2. The Tribunal addressed the delay in filing the appeals, ranging from 4 to 237 days. The reasons for delay included the Covid-19 pandemic period, and the Tribunal, satisfied with the explanations provided, condoned the delay based on relevant judgments of the Hon'ble Supreme Court regarding the extension of limitation. 3. In some cases, the assessees did not appear despite notice, leading to ex parte proceedings. The Tribunal proceeded with these appeals ex parte after hearing the ld. DR due to the absence of the assessees. 4. The common facts in all cases involved the assessees claiming deduction u/s.80P for interest income, which was allowed by the AOs. However, the PCITs invoked jurisdiction u/s.263 and disputed the allowability of the deduction under different sub-sections of 80P, deeming the assessment orders as erroneous and prejudicial to the Revenue. The assessees challenged these decisions before the Tribunal. 5. The Tribunal analyzed the allowability of deduction u/s.80P(2)(a)(i) by referring to precedents. It noted that no direct judgment from the jurisdictional High Court was presented, and based on previous decisions, the Tribunal upheld the granting of deduction on interest income by the AO u/s.80P(2)(a)(i). 6. Regarding deduction u/s.80P(2)(d), the Tribunal clarified that co-operative societies are eligible for deduction on interest income from investments/deposits with a co-operative bank, as long as the bank is a registered co-operative society. The Tribunal cited previous cases to support this interpretation and concluded that the assessees, being registered co-operative societies, qualified for the deduction. 7. Consequently, the Tribunal held that the orders challenging the deduction u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income were not sustainable, and all appeals were allowed in favor of the assessees. This comprehensive analysis of the judgment provides a detailed understanding of the issues involved and the Tribunal's decision on each matter.
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