2024 (7) TMI 336 - AT - Income Tax

Deduction u/s 80P(2)(d) - intimation u/s 143 (1) denying deduction on interest income earned by the assessee from the cooperative banks - HELD THAT -Neither the claim of the assessee under section 80P was inconsistent with another entry, the deduction also did not exceed the specified statutory limit. Therefore, it is apparent that even was not an incorrect claim. Thus it is clear that disallowance of deduction under section 80P(2)(d) is not permitted u/s 143 (1) of the act. Even otherwise on the merits, the amount of interest is earned from cooperative banks. According to section 2 (19) of the act cooperative societies means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies. Under the Maharashtra cooperative societies act section 2 (10) defines Co-operative bank means a Co-operative society which is doing the business of banking as defined in clause (b) of sub-sections (1) of section 5 of the Banking Companies Act, 1949 and includes any society which is functioning or is to function as an Agricultural and Rural Development Bank under Chapter XI - Therefore, it is apparent that cooperative banks are cooperative societies who are doing the banking business. Thus, it cannot be said that all these four entities are not cooperative societies. It is not the case of the AO that the amount of deposit either in fixed deposit scheme or in savings bank account scheme of these cooperative banks is not an investment. Thus, the assessee satisfies all the conditions provided u/s 80P(2)(d) of the act. Thus, according to us the assessee is entitled to the deduction under section 80P(2)(d) of the act with respect to the amount of interest income earned from cooperative banks - Decided in favour of assessee.

Summary

Issues Involved:
1. Delay in filing appeal condonation.
2. Denial of deduction under section 80P(2)(d) of the Income Tax Act.

Issue 1: Delay in Filing Appeal Condonation:
The appeal was filed by a cooperative housing society against the order passed by the Joint Commissioner of Income Tax (Appeals) for assessment year 2012-13. The main issue was the delay of 3609 days in filing the appeal, which the CIT - A did not condone. The appellant argued that the delay was due to a change in the management committee, leading to the appeal being filed late. The representative emphasized that the delay should have been condoned, as the application for rectification was pending and unattended. However, the Tribunal upheld the decision of the CIT - A, stating that the reasons provided for the delay were insufficient. The Tribunal found no error in the decision not to condone the delay, dismissing grounds 1 and 2 of the appeal.

Issue 2: Denial of Deduction under Section 80P(2)(d):
The appellant claimed deduction under section 80P(2)(d) for interest income earned from cooperative banks. The Central Processing Centre denied this deduction in the order under section 143(1) of the Income Tax Act. The Tribunal noted discrepancies in the computation of income, where the deduction was granted as per the taxpayer's return but not considered under Chapter VIA deductions. The Tribunal analyzed whether under section 143(1), the assessee could be denied the deduction, concluding that such denial is only permissible if the return is not filed on time. As the claim was not incorrect and did not exceed statutory limits, the deduction should not have been disallowed. Moreover, the Tribunal clarified that cooperative banks are considered cooperative societies under the law, making the appellant eligible for the deduction. Consequently, the Tribunal allowed ground number 3 of the appeal, partially allowing the appellant's case.

In conclusion, the Tribunal upheld the decision on the delay in filing the appeal while partially allowing the appeal concerning the denial of deduction under section 80P(2)(d) of the Income Tax Act for the cooperative housing society.