2024 (9) TMI 84 - AT - Income Tax

Disallowance of deduction claimed u/s 80P - interest earned on deposits with sponsor Bank - assessee society, being a cooperative society, make deposits in its regular course of business and accordingly the deposits were made in the sponsor bank viz., Andhra Bank in compliance with the statutory regulation of AP Cooperative Societies Act. - HELD THAT - Referring to Tribunal s order 2024 (3) TMI 203 - ITAT VISAKHAPATNAM relied on by the Ld. AR in the assessee s own case for the AY 2020-21 Tribunal has elaborately discussed the identical issue under the similar set of facts and circumstances of the case and concluded that, the assessee is eligible for deduction u/s 80P of the Act. Therefore, respectfully following the decision of this Bench in the assessee s own case for the AY 2020-21 (supra) as well as based on the principle of consistency, no hesitation to come to a conclusion that the orders passed by the Ld. Revenue Authorities are unsustainable in law - Decided in favour of assessee.

Summary

Issues Involved:
1. Delay in filing the appeal.
2. Disallowance of deduction under section 80P(2)(a)(i) of the Income Tax Act.
3. Calculation mistake in the business income in the computation sheet.

Issue-wise Detailed Analysis:

1. Delay in Filing the Appeal:
The appeal was filed with a delay of 122 days. The assessee provided an affidavit explaining the delay, citing the belief that the appeal should be filed after receiving the order from the Income Tax Officer (ITO). The Tribunal found the explanation reasonable and sufficient, thus condoning the delay and proceeding to adjudicate the appeal on merits.

2. Disallowance of Deduction under Section 80P(2)(a)(i):
The assessee, a primary agricultural Credit Cooperative Society, claimed a deduction under section 80P for interest income earned from deposits with Andhra Bank. The Assessing Officer (AO) disallowed this claim, relying on the decision in M/s. Totgars Cooperative Sale Society Ltd. The Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (CIT(A)-NFAC) upheld the AO's decision, stating that the assessee was not eligible for the deduction under section 80P(2)(a)(i) or 80P(2)(d).

The Tribunal reviewed the case, noting that the facts were distinguishable from the Totgars case. The Tribunal referred to its own decision in the assessee's case for AY 2020-21, where it had allowed the deduction under similar circumstances. The Tribunal also cited the Andhra Pradesh High Court's decision in Vavveru Cooperative Rural Bank Ltd., which supported the assessee's eligibility for the deduction. The Tribunal concluded that the assessee was eligible for the deduction under section 80P(2)(a)(i), quashing the CIT(A)-NFAC's order.

3. Calculation Mistake in Business Income:
The assessee pointed out a calculation mistake in the business income in the computation sheet, which was not addressed by the CIT(A)-NFAC. The Tribunal did not provide a separate analysis for this issue but implicitly resolved it by allowing the appeal in favor of the assessee, thereby addressing all grounds raised.

Conclusion:
The Tribunal allowed the appeal, condoning the delay in filing and granting the deduction under section 80P(2)(a)(i) for the interest income earned from deposits with Andhra Bank. The Tribunal followed its previous decision in the assessee's case and the Andhra Pradesh High Court's ruling, emphasizing the principle of consistency. The calculation mistake issue was also implicitly resolved in favor of the assessee.