2022 (12) TMI 505 - AT - Income Tax

Deduction u/s 80P(2)(a)(i) - interest income received from other Co-operative societies - HELD THAT - As similar issue has been considered in Sant Motiram Maharaj Sahakari Pat Sanstha Ltd. 2020 (9) TMI 964 - ITAT PUNE claim of the instant assessee is directly about the eligibility of deduction u/s.80P(2)(a)(i) of the Act and not u/s.80P(2)(d). Moreover, so many decisions relied on by the ld. AR amply go to prove that the view taken by the AO, cannot by any standard, be construed as not a possible view. We, therefore, hold that the ld. Pr. CIT was not justified in exercising the revisional power anent to interest income earned on investments made with co-operative banks. Thus overturn the impugned order to the extent of denial of deduction u/s 80P in respect of interest income. - Decided in favour of assessee.

Summary

Issues:
Denial of deduction u/s 80P(2)(a)(i) of the Income-tax Act, 1961 in respect of interest income received from other Co-operative societies.

Analysis:
The appeal before the Appellate Tribunal ITAT Pune was directed against the order passed by the National Faceless Appeal Centre (NFAC), Delhi concerning the assessment year 2017-18. The primary issue raised in the appeal was the denial of deduction u/s 80P(2)(a)(i) of the Income-tax Act, 1961 in relation to interest income received from other Co-operative societies. The assessee, a Co-operative society, had filed a return of income declaring total income as Nil after claiming a deduction u/s 80P amounting to Rs.30,76,502. However, the Assessing Officer (AO) denied the deduction on interest income of Rs.17,72,010 by invoking the provisions of section 80P(2)(d) of the Act. The ld. CIT(A) upheld the AO's decision, leading the assessee to appeal before the Tribunal.

Upon hearing both sides and examining the relevant material on record, the Tribunal focused on the denial of deduction u/s 80P(2) specifically regarding interest income. The assessee contended that the deduction was claimed u/s 80P(2)(a)(i) and should have been allowed. The Tribunal referred to a similar issue addressed by the Pune Tribunal in a previous case. The Tribunal highlighted that the case law cited by the Department in a different matter was not directly applicable to the current scenario. Consequently, the Tribunal overturned the impugned order that denied the deduction u/s 80P in respect of interest income, aligning its decision with the precedent set by the Pune Bench.

In conclusion, the Tribunal allowed the appeal to the extent that the denial of deduction u/s 80P in respect of interest income was overturned. The order was pronounced in the Open Court on 9th December 2022 by Shri R.S. Syal, Vice President of the Appellate Tribunal ITAT Pune.