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TMI Blog2024 (3) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... istry of Finance vs., Karnataka State Souharda Federal Cooperative Ltd., [ 2022 (1) TMI 540 - KARNATAKA HIGH COURT] thereby holding that such cooperative societies registered under the Karnataka Souhadra Sahakari Act, 1997 very well come under the purview of a cooperative society defined u/s. 2(19) of the Act. That being the case, we reject the Revenue s sole substantive ground. - Shri Satbeer Singh Godara, Judicial Member And Shri Inturi Rama Rao, Accountant Member For the Revenue : Shri N. Shrikanth For the Assessee : None ORDER PER SATBEER SINGH GODARA, J.M. : This Revenue s appeal I.T.A.No.185/PAN./2023, for assessment year 2021-2022, arises against the National Faceless Appeal Centre [in short the NFAC ] Delhi s Din and Order No. ITBA/NFAC/S/250/2023-24/1056413200(1), dated 22.09.2023, involving proceedings u/s. 143(3) of the Income Tax Act, 1961 (in short the Act ). Case called twice. None appears at assessee s behest. It is accordingly proceeded ex-parte. 2. The Revenue pleads the following substantive grounds in the instant appeal : 1. The decision of CIT(A)/NFAC is opposed to facts of the case in allowing entire deduction u/s 80P(2)(a)(i) of the Act. 2. The CIT(A)/NFAC h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now the only issue remains for adjudication in all these appeals is with regard to claim of deduction u/sec. 80P(2)(d) regarding interest income. At the outset, learned counsel for the assessees submitted that these matters are covered by the earlier decision on the same identical issue of the Pune Tribunal in the case of Lokmangal Nagri Sahakari Path Sanstha Maryadit v. PCIT in ITA No.231/PUN/2022 for A.Y. 2017-18, order dated 29.11.2022, wherein also it was the order passed u/sec. 263 read with issue of deduction u/s 80P(2)(a)(i) or 80P(2)(d) of the Income-tax Act, 1961 (hereinafter referred to as the Act ). 6. The learned DR(s) conceded that the facts are absolutely identical and similar. 7. We observe that the Pune Tribunal in ITA No.231/PUN/2022 (supra) on examination of the facts held as follows: 3 .The appellant is a cooperative society formed under the Maharashtra Co-operative Societies Act, 1960. It is engaged in the business of accepting deposits from members and providing credit facilities to its members. The original Return of Income for the assessment year 2017-18 was filed on 18.10.2017 disclosing total income of Rs. 3,11,740/-. Subsequently, the assessee revised the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,712/- u/s 80P(2)(d) after affording reasonable opportunity of being heard to the appellant. 6. Being aggrieved, the appellant is in appeal before us in the present appeal. 7. The ld. AR submits that the issue of eligibility of income earned on the investment made with the cooperative bank was examined by the Co-ordinate Bench of this Tribunal in the case of M/s. Jan Kalyan Nagri Sahakari Pat. Limited Sanstha in ITA No.825/PUN/2019 for A.Y. 2014-15 order dated 26.08.2022. The ld. AR submits that the issue is covered in favour of the appellant. In support of this proposition, ld. AR relied on the following judicial precedents :- (i) Nashik Road Nagari Sahkari Patsanstha Limited vs. ITO (ITA No.1700/PUN/2017 dated 27.12.2021). (ii) Rena Sahakari Sakhar Karkhana Ltd. vs. Pr.CIT (ITA No.1249/PUN/2018 dated 07.01.2022). (iii) Shri Chandraprabhu Urban Co-operative Credit Society Ltd. vs. ITO (ITA No.61 62/PAN/2018 dated 10.05.2022). 8. Thus, it was contended that when the issue was stands covered and decided in favour of the assessee, then it cannot be said that the assessment order is erroneous as well as prejudicial to the interests of the revenue. 9. On the other hand, ld. CIT-DR pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the interest earned from third parties or non-members does not quality for exemption u/s. 80P. It is an admitted position that the interest so earned should be taxed as income from other sources There is a cleavage of judicial opinion among several High Courts on the issue of eligibility of this kind of income for exemption u/s. 80P(2)(a)(i) of the Act. The Hon ble Punjab Haryana High Court in the case of CIT vs. Punjab State Cooperative Federation of Housing Building Societies Ltd. 11 taxmann.com 448, the Hon ble Gujarat High Court in the case of State Bank of India Vs. CIT 389 ITR 578 (Guj.), the Hon ble Delhi High Court in the case of Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT 50 taxmann.com 278, the Hon ble Punjab Haryana High Court in the case of CIT Vs. Punjab State Cooperative Agricultural Development Bank Ltd. 389 ITR 68 and the Hon ble Kolkata High Court in the case of CIT Vs. Southern Eastern Employees Cooperative Credit Society Ltd. 390 ITR 524 took a view that the income arising on the surplus invested in short term deposits and securities cannot be attributed to the activities of the society and, therefore, not eligible for exemption u/s. 80P(2)(a)(i) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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