9911796707
TMI Blog2024 (1) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, who will accordingly grant the deduction qua interest earned from Co-operative Banks only. Appeal filed by the Assessee stands allowed in the aforesaid terms. - SHRI N. K. CHOUDHRY, JM For the Appellant : Shri Shekhar Patwardhan, Ld. CA For the Respondent : Ms. Smitha V. Nair, Ld. DR ORDER Per N. K. Choudhry, JM: The Assessee has preferred these appeals against the orders dated 05.06.2023 for AY 2017-18 2020-21 and 02.06.2023 for AY 2018-19 impugned herein, passed by National Faceless Appeal Centre (NFAC), Delhi {in short NFAC }/Ld. Commissioner of Income Tax (in short Ld. Commissioner ) u/s 250 of the Income Tax Act 1961 (in short the Act ). 2. As the facts and issues involved in these appeals are identical, hence, for the sake of brevity the same were heard together and are disposed of by this composite order. 3. For brevity, I am deciding ITA No. 2223/Mum/2023 as a lead case and result of the same shall be applicable mutatis mutandis to the connected appeals. Brief facts relevant for adjudication of this appeal are that the Assessee claimed to has been established in 2004 and claiming the deduction under section 80P(2)(a) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendments to these provisions w.e.f. AY 2007-08. 1. There to be uniformity in the activities of the assessee with that of a bank in as much as for collecting deposits the depositor has to enroll as a member and deposit the money then and there and an identical process is followed for claiming back the amounts. In the banking business also, the depositors are to take deposit receipts and become account holders for taking loans as well. Effectively, the transactions are comparable and similar. Moreover, as already pointed out, the activities are not restrictive. 8.6 Therefore, the assessee has satisfied all the conditions required to come under the purview of the definition of primary co-operative bank. Under the above facts and circumstances, the assessee is clearly not eligible for deduction u/s 80P(2)(a)(i) in view of the specific provisions of section 2(24)(viia) read with Explanation to 80P(4) of the Income Tax Act, 1961 inserted w.e.f. 01.04.2007. 4. The Assessee being aggrieved challenged the said disallowance of Rs. 35,10,345/- before the Ld. Commissioner. The Ld. Commissioner observed that during the year under consideration, the Assessee earned income to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumer Co-operative Association Ltd. Vs. ITO in ITA No. 102/PAN/2018 decided on 06.04.2022, Nawbharat Darpan Co-operative Credit Society Ltd. Vs. CIT in ITA No. 5288 and 5289/Mum/2018 decided on 25.11.2021, Borivali Jan Kalyan Sahkari Patpedhi Ltd. Vs. ITO in ITA No. 5230/Mum/2019 decided on 30.03.2021 and in the case of Pathare Prabhu Co-operative Housing Society Ltd. Vs. ITO in ITA No. 1346 1347/(MUM) of 2023 decided on 27.07.2023 (2023) 153 taxmann.com 714 (Mum. Trib.) dealt with identical issue as to whether the interest/dividend income earned from Co-operative Bank is allowable as deduction under section 80P(2)(d) of the Act or not and ultimately allowed the deduction claimed as interest/dividend income earned from Co-operative Bank u/s 80P(2)(d) of the Act . For clarity and ready reference, conclusion drawn by the Hon ble Co-ordinate Bench of the Tribunal in the case of Pathare Prabhu Co-operative Housing Society Ltd. (supra) is reproduced herein below: 9. Before proceeding further, it is relevant to note the provisions of section 80P of the Act under which the assessee has claimed the deduction in the present case. As per the provisions of section 80P(1) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k Ltd. v. CIT [2021] 123 taxmann.com 161/279 Taxman 75/431 ITR 1 while analysing the provisions of section 80P(4) of the Act held that section 80P(4) is a proviso to the main provision contained in section 80P(1) and (2) and excludes only Co- operative Banks, which are Co-operative Societies and also possesses a licence from RBI to do banking business. The Hon'ble Supreme Court further held that the limited object of section 80P(4) is to exclude Co- operative Banks that function at par with other commercial banks i.e. which lend money to members of the public. Thus, we are of the considered view that section 80P(4) of the Act is of relevance only in a case where the assessee, who is a Co-operative Bank, claims a deduction under section 80P of the Act which is not the facts of the present case. Therefore, we find no merits in the aforesaid reasoning adopted by the AO and upheld by the learned CIT(A) in denying deduction under section 80P(2)(d) of the Act to the assessee. 12. As regards the claim of deduction under section 80P(2)(d) of the Act, it is also pertinent to note that all Co-operative Banks are Co- operative Societies but vice versa is not true. We find that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive societies; We are of the considered view, that though the co-operative bank pursuant to the insertion of Sub-section (4) of sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but however, as a co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being enforced in any state for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co- operative bank, would be entitled for claim of deduction under Sec. 80P(2)(d) of the Act. 13. We find that the learned CIT(A) has placed reliance upon the decision of the Hon'ble Karnataka High Court in Pr. CIT v. Totagars Co-operative Sales Society [2017] 83 taxmann.com 140/395 ITR 611, wherein it was held that interest earned by the assessee, a Co-operative Society. from surplus deposits kept with a Co-operative Bank, was not eligible for deduction under section 80P(210) of the Act. We find that in an earlier decision the Hon'ble Karnataka High Court in Pr. CT v. Totagars Co-operative Sale Society (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
