2023 (6) TMI 1277 - AT - Income Tax

Deduction u/s. 80P - income derived from business activities including interest income earned from fixed deposits with other cooperative banks - HELD THAT - As relying on assessee own case 2020 (12) TMI 341 - ITAT CHENNAI we are of the considered view that the assessee is entitled for deduction u/s. 80P(2)(a)(i) in respect of income derived from its business activity including interest income earned from fixed deposits with other cooperative banks/societies. CIT(A), after considering relevant facts has rightly directed the AO to delete additions made towards disallowance of deduction claimed u/s. 80P(2)(a)(i) and thus, we are inclined to uphold the findings of the ld. CIT(A) and dismiss appeals filed by the revenue.

Summary

Issues involved:
The judgment involves condonation of delay in filing appeals, disallowance of deduction claimed u/s 80P(2)(a)(i) of the Income-tax Act, 1961, and entitlement to deduction u/s 80P in respect of interest income earned from fixed deposits with other cooperative banks.

Condonation of Delay:
The Appellate Tribunal considered a delay of 56 days in filing appeals by the revenue for assessment years 2014-15 & 2017-18. The Department attributed the delay to the inability to locate assessment records in time. Both parties agreed to condone the delay in the interest of justice. The Tribunal found the reasons for delay acceptable under the Act and thus condoned the delay, admitting the appeals for adjudication.

Disallowance of Deduction u/s 80P(2)(a)(i):
The assessee, a cooperative society providing credit facility to members, had not filed returns for certain assessment years u/s 139 of the Act. The Assessing Officer disallowed the deduction claimed u/s 80P(2)(a)(i) on the basis that the assessee did not meet the conditions of filing returns on time. Additionally, interest earned on fixed deposits with other cooperative banks was also disallowed. The CIT(A), however, directed the AO to delete the additions made towards disallowance of the deduction, citing a decision by the ITAT in favor of the assessee.

Entitlement to Deduction u/s 80P for Interest Income:
The issue revolved around whether the assessee was entitled to deduction u/s 80P for interest income earned from fixed deposits with other cooperative banks. The revenue contended that the interest income was not eligible for deduction under the Act. However, the Tribunal, after considering relevant case laws and the facts of the case, upheld the CIT(A)'s decision to allow the deduction. The Tribunal found that the interest income was part of the assessee's business activity and thus eligible for deduction u/s 80P(2)(a)(i) of the Act.

Separate Judgment:
The judgment was delivered by Shri Manjunatha. G, Hon'ble Accountant Member, and Shri V. Durga Rao, Hon'ble Judicial Member. The appeals filed by the revenue for assessment years 2012-13, 2014-15 & 2017-18 and cross objections filed by the assessee for the same years were dismissed.