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2022 (12) TMI 943 - AT - Income TaxDeduction u/s.80P(2)(a)(i) - interest received on Fixed Deposits kept with Bank - deduction was claimed with reference to interest income earned from banks which was not eligible for deduction u/s.80P - HELD THAT - The Pune Benches of the Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit 2019 (4) TMI 682 - ITAT PUNE 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. In the said case, the Tribunal discussed the contrary views expressed by Tumkur Merchants Souharda Credit Cooperative Ltd. 2015 (2) TMI 995 - KARNATAKA HIGH COURT allowing deduction u/s. 80P on interest income and that of the Hon ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. 2014 (9) TMI 833 - DELHI HIGH COURT not allowing deduction u/s.80P on interest income earned from banks. Both the Hon ble High Courts took into consideration the ratio laid down in the case of Totgar s Cooperative Sale Society Ltd. 2017 (7) TMI 1049 - KARNATAKA HIGH COURT - 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 2015 (8) TMI 1085 - ITAT PUNE 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 Credit Cooperative Ltd. (supra). The position continues to remain the same before this Tribunal also. When we consider the effect of this decision, it turns out that the same is not germane to case under consideration in view of the position that the primary claim of the extant assessee is directly about the eligibility of deduction u/s.80P(2)(a)(i) of the Act. We, therefore, overturn the impugned order on this score and direct to grant deduction u/s.80P(2)(a)(i) of the Act. Assessee appeal is allowed.
Issues:
Denial of deduction u/s.80P(2)(a)(i) in respect of interest received on Fixed Deposits kept with Bank. Analysis: The appeal was filed against the order passed by the National Faceless Appeal Centre, Delhi regarding the denial of deduction under section 80P(2)(a)(i) for interest received on Fixed Deposits. The Assessing Officer observed that the deduction claimed by the assessee was not eligible under section 80P, leading to the dismissal of the claim. The issue raised in the appeal was the denial of deduction amounting to Rs.3,57,44,782 earned from banks. The Pune Benches of the Tribunal referred to previous cases to determine the availability of deduction under section 80P on interest income. The Tribunal considered conflicting views by different High Courts, including the Karnataka High Court allowing deduction and the Delhi High Court not allowing deduction on interest income earned from banks. As no direct judgment from the jurisdictional High Court was presented, the Tribunal preferred to follow the view favoring the assessee. The Tribunal found the reliance of the ld. PCIT on a different case not relevant to the current scenario. The case cited by the PCIT involved the eligibility of deduction under a different section of the Act based on the activities of a cooperative society. The Tribunal clarified that the primary claim of the assessee in the present case directly pertained to the eligibility of deduction under section 80P(2)(a)(i) of the Act, making the cited case irrelevant. Consequently, the Tribunal overturned the impugned order and directed to grant the deduction under section 80P(2)(a)(i) of the Act. As a result, the appeal was allowed, and the order was pronounced in the Open Court on 20th December 2022.
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