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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 ..... ia, Accountant Member For the Assessee : Shri G.S. Agrawal, CA For the Revenue : Dr. Priyanka Patel, Sr. DR ORDER PER RAVISH SOOD, JM: The captioned appeals filed by the assessee society are directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 25.09.2024, which in turn arises from the order passed by the A.O under Sec.143(3) r.w.s.144B of the Income-tax Act, 1961 (in short the Act ) dated 30.08.2022 for the assessment year 2020-21. We shall first take up the appeal filed by assessee society in ITA No.498/RPR/2024 for A.Y.2020-21. ITA No.498/RPR/2024 A.Y.2020-21 2. Shri G.S. Agrawal, Ld. Authorized Representative (for short AR ) for the assessee, at the threshold of hearing, submitted that inadvertently the assessee society had assailed the assessment order passed by the A.O u/s. 143(3) r.w.s. 144B 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,20,364/- paid towards Income Tax as the entire income of the Appellant is exempt, therefore, above deduction of Rs. 9,20,364/- is uncalled-for and be deleted. 3. That under the facts and the law, the Ld. Commissioner of Income Tax (Appeals) erred in not merging /consolidating Appeal No. NFAC/2019-20/10172434 with the present Appeal i.e., Appeal No. NFAC/2019-20/10172937 as erroneously for the same year against the same Assessment Order above two Appeals were filed. Prayed that learned CIT (A) be directed to merge/consolidated Appeal NO. 10172434 with the present Appeal before the Ld. CIT (Appeals) vide Appeal No.10172937. 6. Shri G.S. Agrawal, Ld. AR submitted that the A.O had grossly erred in declining the claim of the assessee society for deduction u/s. 80P(2)(d) of the Act of the interest of Rs. 24,29,559/- received from Raipur Central Cooperative Bank. The 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 develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven a thoughtful consideration to the aforesaid issue in hand, we are unable to concur with the view taken by the lower authorities. In our considered view, as a Co-operative bank falls within the realm of the definition of Co-operative Society as contemplated in Section 2(19) of the Act, therefore, the view taken by the lower authorities that dividend income received by the assessee from Jila Sahakari Kendriya Bank, Raipur, i.e a Cooperative Bank, would not eligible for deduction u/s. 80P(2)(d) of the Act cannot be sustained. Our aforesaid view is fortified by the order of the ITAT, Mumbai in the case of M/s Solitaire CHS Ltd Vs. Principal Commissioner of Income Tax-26, ITA No.3155/Mum/2019, dated 29.11.2019 (wherein one of us, i.e, the JM was a party), had after exhaustive deliberations held as under: 6. We have heard the authorised representatives 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be gathered that interest income derived by an assessee co-operative society from its investments held with any other cooperative society shall be deducted in computing its total income. We may herein observe, that what is relevant for claim of deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other co-operative society. We are in agreement with the view taken by the Pr. CIT, that with the insertion of sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. However, at the same time, 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 fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Circular No. 14, dated 28.12.2006, also makes it clear beyond any scope of doubt that the purpose behind enactment of sub-section (4) of Sec. 80P was that the cooperative banks which were functioning at par with other banks would no more be entitled for claim of deduction under Sec. 80P(4) of the Act. Insofar the reliance placed by the Pr. CIT on the judgment of the Hon ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd. vs. ITO (2010) 322 ITR 283 (SC) is concerned, we are of the considered view that the same being distinguishable on facts had wrongly been relied upon by him. The adjudication by the Hon ble Apex Court in the aforesaid case was in context of Sec. 80P(2)(a)(i), and not on the entitlement of a co-operative society towards deduction under Sec. 80P(2)(d) on the 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the A.O under Sec. 143(3), date 14.09.2016. 10. Resultantly, the appeal filed by the assessee is allowed. Backed by our aforesaid observations, we not being able to persuade ourselves to subscribe to the view taken by the lower authorities, therein vacate the disallowance of the assessee s claim for deduction of Rs. 1,16,224/- u/s. 80P(2)(d) of the Act. The Ground of appeal No.4 is allowed in terms of the aforesaid observations. As the facts and issue involved in the present appeal remain the same as were there before the Tribunal in the aforementioned case, therefore, we follow the same. Accordingly, the A.O is directed to allow the assessee s claim for deduction u/s. 80P(2)(d) of the Act of Rs. 24,29,559/- i.e. interest received by the assessee society from Raipur 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 pai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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