2024 (6) TMI 1366 - AT - Income Tax

Disallowance of deduction claimed u/s 80P - interest income on by assessee from other cooperative banks - HELD THAT - Cooperative banks are also a co-operative society. Only difference is that those cooperative societies are doing the business of banking as per the banking companies act 1949. Therefore, merely because these cooperative societies cooperative bank they do not lose their status as a co-operative society. The assessee s investment of earning interest income from such cooperative banks which are also cooperative societies whole of such income is deductible under this section. It is not in dispute that assessee is not a cooperative bank and therefore provisions of section 80P(4) of the act does not apply to it. Thus the assessee is eligible for deduction under section 80P(2)(D) of the act on its income received from all the above cooperative banks. Hence assessee is eligible for that deduction - Appeal of assessee allowed.

Summary

Issues:
1. Disallowance of deduction claimed under section 80P of the Income Tax Act, 1961.
2. Delay in filing the appeal and condonation of the delay.
3. Eligibility of the assessee for deduction under section 80P(2)(D) on interest income from cooperative banks.

Analysis:

1. The issue of disallowance of deduction claimed under section 80P of the Income Tax Act, 1961 was raised by the assessee in the appeal. The Assessing Officer disallowed the deduction claimed under section 80P(2)(D) amounting to Rs. 6,04,396/- in the return of income filed by the assessee. The CIT - A confirmed this disallowance, leading to the appeal before the Tribunal. The Tribunal found that the assessee, a cooperative housing society, had filed its return of income within the due date and was eligible for the deduction under section 80P(2)(D) on interest income from cooperative banks. The Tribunal allowed the appeal on this ground, stating that the disallowance was not sustainable under section 143(1) of the Act.

2. The next issue involved the delay in filing the appeal and the condonation of this delay. The CIT - A dismissed the appeal filed by the assessee as it was beyond the statutory time limit for filing appeals. The assessee had filed a rectification application under section 154 of the Act, which was rejected, leading to the delayed filing of the appeal. The Tribunal noted that the delay of three months occurred due to the rejection of the rectification application. The Tribunal found that there was a sufficient cause for the delay in filing the appeal and criticized the CIT - A for not condoning the delay, stating that the delay should have been condoned.

3. The final issue revolved around the eligibility of the assessee for deduction under section 80P(2)(D) on interest income from cooperative banks. The Tribunal analyzed the definitions of cooperative societies and cooperative banks under relevant Acts and found that cooperative banks are also considered cooperative societies. The Tribunal determined that the assessee, a cooperative housing society, was eligible for the deduction under section 80P(2)(D) on its income received from cooperative banks, as the income derived from such investments with cooperative banks was deductible under this section. The Tribunal concluded that the assessee was eligible for the deduction amounting to Rs. 6,04,396/-.

In conclusion, the Tribunal allowed the appeal, stating that the assessee was eligible for the deduction under section 80P(2)(D) on interest income from cooperative banks, and criticized the CIT - A for not condoning the delay in filing the appeal.