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TMI Blog2025 (1) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, dated 30.08.2022 by filing two appeals as mentioned by the CIT(Appeals)/NFAC, Delhi, viz. (i) Appeal No. NFAC/2019- 20/10172434; and (ii) Appeal No. NFAC/2019-20/10172937. The Ld. AR submitted that the assessee society vide its letter dated 10.09.2024, Page 43 of APB had brought the said fact to the notice of the CIT(Appeals) and had sought for merger of the said appeals into one appeal, i.e. impliedly sought withdrawal of one appeal, but the said request was not considered by him. The Ld. AR submitted that the CIT(Appeals) had disposed off both the aforementioned appeals vide his respective orders dated 25.09.2024. The Ld. AR submitted that as the impugned order of the CIT(Appeals) dated 25,09.2024 arises from the same order of assessment, and thus, had resulted to two appeals, therefore, one of the captioned appeals is rendered as infructuous. 3. We have thoughtfully considered the aforesaid facts and after verifying the factual position, find that the assessee had assailed the order of assessment passed by the A.O vide two appeals as mentioned by the CIT(Appeals), viz. (i) Appeal No. NFAC/2019-20/10172434; and (ii) Appeal No. NFAC/2019-20/10172937. Although the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AR submitted that the A.O had wrongly observed that pursuant to insertion of Section 80P(4) of the Act w.e.f. 01.04.2007, the provisions of Section 80P of the Act shall not apply in relation to any co- operative bank other than a primary agricultural credit society or a primary co-operative agricultural or rural development bank, therefore, the claim of the assessee society for deduction u/s. 80P(2)(d) of the Act is not allowable. The Ld.AR submitted that the issue involved in the present appeal is squarely covered by the order of ITAT, Raipur in the case of Gramin Sewa Sahkari Samiti Maryadit & Ors. Vs. The ITO, Ward-1(3), Raipur, ITA Nos. 114/RPR/2016 & Ors, dated 23.02.2022, wherein after exhaustive deliberations, the Tribunal had held that interest earned by the assessee society from a Co-operative bank was eligible for deduction u/s. 80P(2)(d) of the Act. The Ld.AR had placed on record the copy of the order of the Tribunal. 7. Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. 8. We have thoughtfully considered the contentions advanced by the Ld. Authorized Representatives of both the parties in the bac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Our indulgence in the present appeal has been sought, for adjudicating, as to whether the claim of the assessee for deduction under section 80P(2)(d) in respect of interest income earned from the investments/deposits made with the co-operative banks is in order, or not. In our considered view, the issue involved in the present appeal revolves around the adjudication of the scope and gamut of sub-section (4) of Sec. 80P as had been made available on the statute, vide the Finance Act 2006, with effect from 01.04.2007. On a perusal of the order passed by the Pr. CIT under Sec. 263 of the Act, we find, that he was of the view that pursuant to insertion of sub-section (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2)(d) in respect of the interest income that was earned on the amounts which were parked as investments/deposits with co-operative banks, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. Obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, we are unable to subscribe to his view that the aforesaid amendment would jeopardise the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its interest income on investments/deposits parked with a co-operative bank. In our considered view, as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We find that the term „cooperative society‟ had been defined under Sec. 2(19) of the Act, as under:- "(19) "Co-operative society" means a cooperative 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;" We are of the considered view, that though the co-operative banks pursuant to the insertion of subsection (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a co-operative bank continues to be a co-operative society registered under the Co-operative Societies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest income on the investments/deposits parked with a co-operative bank. Although, in all fairness, we may herein observe that the Hon'ble High Court of Karnataka in the case of Pr. CIT Vs. Totagars co-operative Sale Society (2017) 395 ITR 611 (Karn), had concluded that a co-operative society would not be entitled to claim of deduction under Sec. 80P(2)(d). At the same time, we find, that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon'ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), had observed, that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. We find that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. Vs. Siemens India Ltd. and Anr (1985) 156 ITR 11 (Bom), where there is a conflict between the decisions of non-jurisdictional High Court's, then a view which is in favour of the assessee is to be preferred as against that taken against him. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur Central Co-operative Bank. Thus, the Ground of appeal No.1 raised by the assessee society is allowed in terms of our aforesaid observations. 9. Apropos the observation of the A.O that the assessee was disentitled from claiming deduction of income tax of Rs. 9,20,364/-, we find no infirmity in the same. As observed by the A.O, and rightly so, as per the mandate of Section 40(a)(ii) of the Act, any sum paid on account of any rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of or otherwise on the basis of any such profits or gains is not deductible while computing the business income, therefore, we find no infirmity in the view taken by the lower authorities, and thus, approve the same. Thus, the Ground of appeal No.2 raised by the assessee society is dismissed in terms of our aforesaid observations. 10. Ground of appeal No.3 wherein the assessee had sought for rendering the second appeal i.e. ITA No.498/RPR/2024 (arising out of appeal No. NFAC/2019-20/10172434), dated 29.09.2022 which is allowed in terms of our aforesaid observations. 11. In the result, appeal of the assessee society in ITA No.497/RPR/2024 is partly allowed, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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