Section 80P of the Income Tax Act, 1961, provides tax deductions to cooperative societies, allowing them to claim exemptions on their income. This section aims to promote and support the growth of cooperative societies in India.
To be eligible for deductions under Section 80P, a cooperative society must satisfy certain conditions. These include:
1. The society must be a primary agricultural credit society, a primary cooperative bank, or a cooperative society engaged in providing medical relief, education, or other similar activities.
2. The society must be registered under the Cooperative Societies Act, 1912, or any other law for the time being in force.
3. The society must have its income derived from its business or activities.
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The deductions allowed under Section 80P vary depending on the type of cooperative society. For example:
– Primary agricultural credit societies and primary cooperative banks are eligible for a deduction of 100% of their income.
– Cooperative societies engaged in providing medical relief, education, or other similar activities are eligible for a deduction of 50% of their income.
Section 80P provides a significant tax benefit to cooperative societies, enabling them to retain more of their income and invest in their growth and development.
Case Digest on Recent Decisions involving Section 80P are given below….
In a significant ruling related to demand of Income Tax on denial of benefit under section 80 P of the Income Tax Act, 1961, the Kerala High Court set aside recovery on pendency of appeal before Income Tax Appellate Tribunal ( ITAT ).
The single bench of Justice Gopinath P disposed of the writ petition directing that the steps for recovery of any demands finalized against the petitioner for the years 2012-13 and 2013-14 shall stand deferred till appeals filed for the said years are heard and disposed of by the 3rd respondent and till the appeals filed for the years 2016-17, 2017-18 and 2018-19 are heard and disposed of by the 4th respondent-Tribunal. Recovery relating to the demand arising for the year 2014-15 will be deferred till a decision is taken on the application for rectification of mistake by the 4th respondent-Tribunal.
The Visakhapatnam Bench of Income Tax Appellate Tribunal ( ITAT )ruled that a cooperative society is eligible for an income tax deduction under Section 80P(2)(a)(i) for interest income derived from bank deposits.
A single bench of Duvvuru RL Reddy(Judicial Member) found that the facts in the current appeal were distinguishable from prior rulings and supported the assessee’s claim for deduction under Section 80P for the interest earned on deposits.
The Central Board of Direct Taxes ( CBDT ) has granted condonation of delay for co-operative societies claiming deductions under Section 80P of the Income-tax Act, 1961, for the assessment year 2023-24.
The circular No. 14/ 2024 dated 30th October 2024 was issued by the board. The board has extended the applicability of circular no. 13/2023 to the assessment year 2023-24 subject to the conditions mentioned in the previous circular.
In a recent ruling, the Madras High Court dismissed the writ petition filed for claiming deductions under Section 80 P of the Income Tax Act, 1961 and did not condone the delay in filing Income Tax Returns ( ITR ) for claiming deductions under Section 80 P of the Income Tax Act, 1961.
The writ petition was filed by the assessee which is a cooperative society, praying to issue a writ of Certiorarified Mandamus, to call for the records in the file of the respondent and quash the impugned order passed by the respondent under Section 119(2)(b) of the Income Tax Act.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) ruled that interest income earned from deposits with cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act,1961.
The two member bench comprising Sunil Kumar Singh (Judicial Member) and Om Prakash Kant (Accountant Member)rejected the disallowance made by the AO and confirmed by the CIT(A). Consequently, the bench allowed the appeal in favor of the assessee, restoring the deduction for interest income and ordering the deletion of the addition made to the taxable income.
The Income Tax Appellate Tribunal (ITAT) has recently upheld the provisions of Section 80P of the Income Tax Act, affirming its role in promoting the growth of cooperative societies.
However, on the contrary it was held against the assessee that, “Therefore, in light of these facts discussed above, the PCIT set-aside the assessment order is being erroneous and prejudicial to the interest of the Revenue. On going through the contents of the assessment order, the assessee’s activities during the impugned year under consideration, and the assessee’s alternate claim for claim of deduction under Section 80P(2)(e) of the Act, we are of the considered view that there is no infirmity in the order of the Ld. PCIT, so as to call for any interference”. The tribunal bench noted the necessity for re-verification of claims to ensure compliance with statutory provisions
The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench has upheld a revision order reaffirming the right of the assessee, a Ginning Pressing Cotton Sale Co-operative Society Ltd. to make an alternate claim for deductions under Section 80P(2)(e) of the Income Tax Act.
The ruling reiterates that the mere technicalities in the operation or equipment used should not overshadow the underlying purpose of cooperative societies, which is to support the agricultural community.
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) ruled that interest income earned from deposits with cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act,1961.
Charkop Lands End Co-operative Housing Society Ltd.,the appellant-assessee,had filed its return of income for AY 2020-21, declaring a total income of ₹2,80,303. The return was processed under Section 143(1), after which the Assessing Officer (AO) disallowed the assessee’s claim of ₹3,94,856 under Section 80P(2)(d) in relation to interest income earned from deposits with cooperative banks. The disallowance led to an increase in the total taxable income to ₹6,75,160.
The Income Tax Appellate Tribunal (ITAT) has recently upheld the provisions of Section 80P of the Income Tax Act, affirming its role in promoting the growth of cooperative societies.
The ruling was made in the appeal concerning the assessment year 2015-16, where the Principal Commissioner of Income Tax (PCIT) had revised an earlier assessment order under Section 263.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) ruled in favour of the assessee allowing full deductions under Section 80P of the Income Tax Act,1961 for income earned from cooperative banks.It emphasized that this income fosters cooperative financial activity and should qualify for tax relief, contradicting the Assessing Officer ( AO )’s decision to exclude cooperative banks from the definition of “co-operative society.”
The two member bench comprising T.R Senthil Kumar ( Judicial Member ) and Makarand V.Mahadeokar ( Accountant Member ) regarding Section 80P(2)(c), noted that the assessee qualified for a standard deduction of ₹50,000, as its activities did not fall under the explicit categories listed in Section 80P(2)(a) or (b). The CIT(A) had denied this deduction without sufficient reasoning. Consequently, the tribunal set aside the disallowance of the ₹50,000 deduction under Section 80P(2)(c)(ii) and allowed it in full. In conclusion,the ITAT set aside the orders of the lower authorities and granted the appeal of the assessee in full.
The Mumbai Bench of Income Tax Appellate Tribunal(ITAT)condoned the delay in filing an appeal by the assessee due to ongoing rectification efforts and the death of its Chartered Accountant(CA) and restored the matter to Commissioner of Income Tax(Appeals)[CIT(A)] for fresh hearing.
Shree Sejal Tower Co-operative Housing Society Limited,the appellant-assessee, filed its return of income on March 22, 2016, for the assessment year 2015-16, reporting a total income of Rs. Nil after claiming a deduction of Rs. 940,943 under Section 80P(2)(d).
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that government grants received for specific purposes, such as the ₹50,00,000 grant under the Rashtriya Krishi Vikas Yojana (RKVY), are not recognized as income until utilized.
Gandhinagar District Coop.Milk Producers Union Ltd.,the appellant assessee,was a co-operative society registered under the Gujarat Co-operative Societies Act, 1961, and engaged in collecting raw milk. For the Assessment Year (AY) 2020-21, it filed a return of income declaring ₹3,12,33,210, claiming deductions under Section 80P amounting to ₹1,44,48,096.
The Income Tax Appellate Tribunal ( ITAT ) has ruled that the interest income from bank deposits is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961.
The ITAT set aside the order of the CIT(A) and ruled in favour of the appellant, allowing the claim for deduction under Section 80P.
The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that interest earned from savings accounts in a Co-operative bank cannot be treated as income or dividends from investments.
The two-member bench comprising Viswanethra Ravi (Judicial Member) and Jagadish (Accountant Member) noted that the deduction under section 80P(2)(d) applies to income from interest or dividends received by a co-operative society from its investments in other co-operative societies.
The tribunal noted that the interest earned from the FDs was considered an investment, it emphasized that interest earned from a savings bank account maintained in a co-operative bank cannot be treated as income or dividend from investment.
In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ) allowed the appeal filed by the co-operative society and held that it was entitled to deductions under Section 80P(2)(d) of the Income Tax Act, 1961, for deposits in co-operative banks In this case, the assessee, Sumel 6 Commercial Co-op. Service Society Limited, had filed its Income Tax Returns for the Assessment Year 2020-21 and declared the income at ‘Nil’.
The ITAT bench observed that the assessee has given the details of cooperative societies, which are listed under cooperative banks issued by the Ministry of Corporation, Government of India, and thus, the disallowance made by the AO under Section 80P(2)(d) of the Act is not justified. The ITAT bench, composed of Narendra Prasad Sinha and Suchitra Kamble, allowed the appeal in favor of the assessee.
The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that interest earned from savings accounts in a Co-operative bank cannot be treated as income or dividends from investments.
Karumandurmedu MPCS Ltd., the assessee claimed a deduction under section 80P(2)(d) of the Income Tax Act, 1961, for the assessment years 2020-21 and 2021-22. The deduction was related to interest income of Rs. 1,72,880 received from a Co-operative Bank.
The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that interest income earned from deposits with co-operative banks qualifies for a deduction under Section 80P(2)(d) of the Income Tax Act,1961.
A single member bench Ramit Kochar (Accountant Member) partly allowed the appeal.
In the recent ruling, the Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that co-operative societies offering credit facilities to their members can claim deductions under section 80P(2)(a)(i) of the Income Tax Act,1961.
The two member bench comprising Keshav Dubey (Judicial Member) and Waseem Ahmed (Accountant Member) restored the issue of the assessee’s claim for deduction under section 80P(2)(a)(i) to the AO for fresh consideration, instructed the AO to verify if interest or dividends came from investments in cooperative societies qualifying for deduction under section 80P(2)(d), and noted that if interest from banks was treated as “Income from Other Sources,” the AO should grant relief under section 57, resulting in a partly allowed appeal.
The Bangalore Bench of Income Tax Appellate Authority ( ITAT ) remanded the matter back to the Commissioner of Income Tax (Appeals) for fresh adjudication due to incorrect facts and findings recorded in the CIT(A)’s order.
Raythara Sahakari Sangha Ltd., the assessee filed its income tax return for the assessment years 2018-19 and 2020-21. The assessing officer ( AO ) disallowed deductions of Rs.68,16,732 claimed under Section 80P of the Income Tax Act and added Rs. 93,01,770 as unexplained investments to the assessee’s total income.
Recently, the Income Tax Appellate Tribunal ( ITAT ) of Mumbai held that Section 80P(4) of the Income Tax Act 1961 (ITA) only excludes Co-operative banks functioning as commercial banks. The case, concerning the assessment year 2020-21, involved the appellant/assessee,
Laburnum Mahindra Gardens Co. Op. Housing Limited, a cooperative housing society who claimed a deduction of Rs. 28.73 lakh on interest earned from Fixed Deposit Receipts (FDRs) and savings accounts maintained with co-operative banks.
The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that co-operative societies providing credit to their members are eligible for deductions under Section 80P(2)(a)(i) of the Income Tax Act,1961.
The two-member bench comprising Yogesh Kumar U. S (Judicial Member) and Waseem Ahmed (Accountant Member) partly allowed the appeal and remitted the issues to the CIT(A)/NFAC for a fresh review, ensuring that the assessee had a full opportunity to present their case.
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) ruled that the deduction under section 80P cannot be claimed in Income Tax Return (ITR) filing beyond the due date specified under section 139(1) of the Income Tax Act. The tribunal highlighted that the amendment of section 80AC which mandates deduction under section 80P could be claimed only if the income tax return was filed within the due date under section 139(1) from 1st April 2018.
The tribunal referenced similar rulings, such as the Nileshwar Rangekallu Chethu Vyavasaya Thozhilali Sahakarana Sangham case, supporting the revenue’s stance on the amended Section 80AC. Thus, the tribunal dismissed the appeal of the assessee.
The Bangalore Bench of Income Tax Appellate Tribunal ( ITAT ) ruled that the addition under section 69A of Income Tax Act,1961 cannot be made solely on the claim that the assessee was not a specified person to accept demonetized currency.
Vikas Co-operative Credit Society,the appellant-assessee,was asked to explain cash deposits of Rs.15,58,500 for the Assessment Year ( AY ) 2017-18. The assessee explained that the deposits came from loan recoveries, pigmy collections, and member contributions and also claimed entitlement to a deduction under section 80P of the Act.
The Income Tax Appellate Tribunal (ITAT) of Ahmedabad in a recent case allowed a deduction claim made by a Co-operative Society under Section 80P(2)(d) of the Income Tax Act, 1961 (ITA) related to interest income earned from a Co-operative Bank. Consequently the tribunal set aside a revision order passed by the Principal Commissioner of Income Tax (PCIT).
The Assessee, Posun Credit Co-op Society, a co-operative credit society registered under the Gujarat Co-operative Act, filed its return of income on August 3, 2018, declaring “Nil” income.
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has ruled that a taxpayer registered as a co-operative society under the Karnataka Souharda Sahakari Act is eligible for deduction under Section 80P of the Income Tax Act, 1961.
The Tribunal, comprising Judicial Member Keshav Dubey and Accountant Member Laxmi Prasad Sahu, noted that the assessee had filed a return declaring nil income and claimed a deduction under Section 80P on the entire income. The AO had disallowed this deduction, despite a favorable jurisdictional High Court judgment in a similar case, Sri Matha Vividoddesha Pathina Souharda Sahakari Niyamitha vs. UOI . The CIT (Appeals) had decided the case ex parte due to the assessee’s non-prosecution.
The Tribunal remitted the issue to the CIT (Appeals) for fresh consideration, directing the assessee to update their contact details and submit the necessary documents. The Tribunal emphasized that the assessee must cooperate with the proceedings, warning that failure to do so would result in no further leniency. Consequently, the appeal was allowed for statistical purposes.
The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) has directed the Assessing Officer (AO) to reassess the fixed deposit interest claims of Tungabhadra Credit Co-operative Society, emphasizing that the exclusion under Section 80P(2)(d) must be considered alongside Section 57 of the Income Tax Act, 1961.
The two-member bench, comprising Beena Pillai ( Judicial Member ) and Waseem Ahmed ( Accountant Member ), upheld the grounds in all three appeals.
Recently, the Bangalore bench of Income Tax Appellate Tribunal (ITAT) ordered the reevaluation of a Co-Operative Society’s income tax deduction eligibility under section 80P of the Income Tax Act 1961 (ITA), observing that the assessee society’s income from interest was not verified completely.
In light of the observations made, the Tribunal remitted the case back to the AO to reassess the eligibility of the interest income for deductions under Sections 80P(2)(a)(i) and 80P(2)(d) based on the findings and guidelines provided in the judgment. The appeal of the assessee was allowed for statistical purposes, providing the AO with clear instructions on how to proceed with the reassessment.
The assessee in this case is Shivoham Sagar Co-Op Credit Society Ltd, a cooperative society registered under the Gujarat Co-operative Societies Act. The primary purpose of the society is to provide credit facilities to its members. The society filed its income tax return on July 15, 2017, declaring a total income of Rs. NIL, having claimed a deduction of Rs. 9,57,108 under Section 80P of the Income Tax Legislature.
The return was selected for scrutiny, and notices under Sections 143(2) and 142(1) of ITA were issued and served. During the scrutiny, the Assessing Officer (AO) noted that the society had claimed a deduction under Section 80P of ITA for interest earned from nationalized banks. The AO disallowed a portion of this deduction, amounting to Rs. 4,79,001. Additionally, the AO observed that the society had made substantial cash deposits in its bank accounts during the demonetization period, specifically in old currency notes of Rs. 500 and Rs. 1000 on November 10, 11, and 12, 2016, totaling Rs. 77,20,000.
Recently, the Bangalore bench of Income Tax Appellate Tribunal (ITAT) ordered the reevaluation of a Co-Operative Society’s income tax deduction eligibility under section 80P of the Income Tax Act 1961 (ITA), observing that the assessee society’s income from interest was not verified completely.
The assessee society, Vividhoddesha Prathamika Grameena Krashi Sahakara Sangha Niyamita, registered on April 27, 1979, under the Karnataka Co-operative Societies Act, 1959, had declared a Nil income in its return and claimed a deduction of Rs. 27,28,085 under Section 80P of ITA for assessment year (AY) 2018-19.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled in favour of BSNL Employees’ Co-operative Society, granting it the benefit of deduction under Section 80P(2) of the Income Tax Act, 1961.
The bench of Keshav Dubey ( Accountant Member ) and Laxmi Prasad Sahu ( Judicial Member ), after considering the rival submissions, acknowledged that the revenue authorities had previously denied the deduction based on a detailed analysis under Section 80P(4) read with Section 2(24) of the Income tax law. However, the ITAT found that the society, formed under the Karnataka Co-operative Society Act, 1959, solely for the benefit of BSNL employees, did not operate as a bank and was therefore eligible for the Section 80P(2) deduction.
In a recent ruling, the Banglore bench of the Income Tax Appellate Tribunal ( ITAT ) set aside orders passed by lower authorities noting that while passing the said orders, the lower authorities overlooked relevant principles laid out in Supreme Court precedents.
The AO was instructed to consider relevant decisions of the Tribunal, particularly those related to the allowance of interest on fixed deposits under Income tax Section 80P(2)(d), ensuring that such claims are considered under the appropriate legal provisions, including Section 57 of the income tax legislature for expenditure. In result, the Tribunal allowed the assessee’s appeal for statistical purposes, remitting the case back to the AO for fresh consideration in accordance with the Supreme Court’s rulings and the Tribunal’s directions.
The PCIT observed that the assessee had claimed a total deduction under Section 80P(2)(d) of the Income Tax Act, amounting to Rs. 36,18,006/-.
The counsel on behalf of the assessee contended that the AO considered the deduction under Section 80P(2)(d) of the Income Tax Act during the assessment proceedings and disallowed interest income from nationalized banks. It was further submitted that the invocation of explanation 2 of Section 263 of the Income Tax Act is unjustifiable, as the verification of the proper enquiry was made by the AO at the assessment stage.
The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) recently held in a case that interest income from fixed deposits can be set off against property maintenance expenses.
The assessee was also granted the standard deduction of ₹50,000 under Section 80P(2)(c)(ii) of the ITA, noting that since the assessee being a housing co-operative society showed net surplus of Rs.4,64,486/- in its Profit and Loss account after netting out all the maintenance expenses, it is eligible for the said deduction.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the appeal in favor of the assessee CIDCO and allowed income tax deduction under Section 80P(2)(a)(i) and 80P(2)(d) of the Income Tax Act.
The tribunal bench, comprising Gagan Goyal ( Accountant Member ) and Sunil Kumar Singh ( Judicial Member ) held that the AO should not have denied the benefit of Section 80P of the Act to the assessee society. The bench allowed the appeal in favor of the assessee and directed the AO to allow the benefit of deduction to the assessee under Section 80P(2)(a)(i) and 80P(2)(d) of the Income Tax Statute.
The assessee appealed the penalty order to the CIT(A), arguing that the deduction under Section 80P(2)(i) should have been allowed in the quantum appeal, citing the State Bank of India case and the Reliance Petroproducts Ltd. case.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has allowed a deduction under Section 80P(2)(d) of the Income Tax Act, 1961, to Khedbrahma Taluka Primary Teachers Co-operative Credit Society Ltd. for interest earned on deposits with The Sabarkantha District Central Co-operative Bank, Khedbrahma.
The Tribunal also condoned a nine-day delay in filing the appeal. The ITAT bench of Ramit Kochar (Accountant Member) and T R Senthil Kumar (Judicial Member), following the Gujarat High Court decisions, allowed the appeal. However, it directed the AO to verify that the Sabarkantha District Central Co-operative Bank, Khedbrahma, is a co-operative society duly registered under the Co-operative Societies Act or the State Act before granting relief to the assessee.
In a recent judgment, the Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the adjustment on the Section 80P deduction as the taxpayer filed their Income Tax Return ( ITR ) within the due date under Section 139(1).
The bench noted that the assessee, a Cooperative Housing Society registered under the Maharashtra Society Act 1960, had filed its returns of income within the due dates under Section 139(1) for the assessment years 2012-13 and 2014-15. Under the amended provisions, no prima facie adjustment on account of deduction under Section 80P could have been made.
Consequently, the two-member bench of the tribunal, comprising Ratheesh Nandan Sahay (Accountant Member) and Amit Shukla (Judicial Member), held that the disallowance made by the CPC under Section 143(1)(a) on the claim of deduction under Section 80P was beyond the scope of adjustment under Section 143(1). Accordingly, the adjustment was deleted.
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled that under Section 80P (2)(d), taxpayers are eligible for a deduction on interest and dividend income earned from investments with cooperative societies.
The issue to be decided was whether the assessee was eligible to claim deduction under Section 80P (2)(a)(i) and/or 80P(2)(d) on the interest income earned on its investment amount made with District co-operative banks.
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT ) has allowed the deduction under Section 80P(2)(d) of the Income Tax Act, 1961 to the Grand Paradi Co-op Housing Society and held that cooperative banks are cooperative societies that are doing banking business.
The single member bench of Prashant Maharishi (Accountant Member) has observed that, as per Section 2(10) of the Maharashtra Cooperative Societies Act, “co-operative bank” means a cooperative society that is doing the business of banking as defined in Section 5(1)(b) of the Banking Companies Act, 1949, and includes any society that is functioning or is to function as an agricultural and rural development bank. While allowing the appeal, the Tribunal held that the assessee is entitled to the deduction under Section 80P(2)(d) of the Income Tax Act with respect to the amount of interest income earned from cooperative banks.
In a matter related to Income Tax deduction, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the deduction under Section 80P(2)(d) of the Income Tax Act, is allowable to the co-operative society on interest earned from co-operative banks.
The two member bench of Kul Bharat ( Judicial Member ) has held that Co-operative Bank is primarily a Co-operative Society. Therefore, for section 80P(2)(d) of the Income Tax Act, the assessee would be entitled for deduction under section 80P(2)(d) of the Income Tax legislation. While allowing the appeal, the tribunal held that the assessee would be eligible for income tax deduction under Section 80P(2)(d).
The Kerala High Court condoned the delay of 11 days as the delay in filing an Income Tax appeal occurred due to the non-availability of a legal consultant. The court observed that filing an appeal in tax matters may require legal and technical assistance.
The Meenachil Taluk Cooperative Employees Cooperative Society Limited, the petitioner/assessee is a cooperative society, filed its return of income for the assessment year 2017-18 and claimed deduction under Section 80P of the Income Tax Act, 1961. The Income Tax assessing officer completed the assessment and passed the order under Section 143(3). The Assessing Officer disallowed the deduction claimed by the petitioner under Section 80P of the income tax legislation.
In a matter related to Income Tax deduction, the Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the deduction under Section 80P(2)(d) of the Income Tax Act, is allowable to the co-operative society on interest earned from co-operative banks.
The Janta Adarsh Co-operative Thrift & Credit Society Ltd, the appellant/assessee is a Co-operative Credit Society Ltd. and filed its return of income under the status of “AOP” for the year under consideration on 31.08.2018, declaring total income at Rs. NIL. The Centralized Processing Centre ( CPC ) processed the income return.
The assessee has earned interest and dividend income by making deposits with the Delhi State Co-operative Bank Ltd. which is registered under Co-operative Societies Act. As per Section 80P of the Income Tax Act, 1961 all co-operative societies other than those coming under the control of RBI are eligible for a deduction.
A co-operative society conducting banking activities is not a co-operative bank licensed by the Reserve Bank of India. It can, therefore, claim Income Tax deductions under Section 80P.
The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that interest income to a cooperative society from investments with any other cooperative society is deemed allowable under Section 80P, providing relief to Indian Oil employees’ welfare.
The two member bench of the tribunal comprising Amit Shukla ( Judicial member ) and Prashanth Maharishi ( Accountant member ) directed the lower authorities to allow the deduction to the assessee on interest income earned from various cooperative banks under Section 80P(2)(d) of the Income Tax Act. Accordingly, the appeals of the assessee were allowed.
The Kolkata Bench of the Income Tax Appellate Tribunal ( ITAT ) has ruled that the Centralized Processing Centre (CPC) lacked authority for preliminary deduction under Section 80P of the Income Tax Act, 1961, prior to April 2021.
Therefore, the two member bench consisting Rajpal Yadav ( Vice President ) and Girish Agarwal ( Accountant member) set aside the order of the CIT(A) and allowed the grounds of appeal raised by the assessee for the claim of deduction under Section 80P of the Income Tax Act at Rs.19,42,264/-. Accordingly, appeal of the assessee was allowed.
The Chennai bench of the Income Tax Appellate Tribunal ( ITAT ) has allowed Union Bank of India to claim deduction under Section 80P (2) (a) (i) for dividends received from cooperative bank shares. A single member bench of the tribunal comprising Mahavir Singh observed that the assessee is a multi-state cooperative society, registered under the multi-state cooperative Societies Act, 2012 at Chennai.
The members of the assessee’s society are all employees of Union Bank of India. Assessee extended credit facilities like surety loans, festival loans, calamity loans etc. to its members. Assessee received Rs.3, 77,800/- as dividend from shares held in Chennai Central Co-operative Bank.
The Pune Bench of the Income Tax Appellate Tribunal ( ITAT ) observed that the interest and dividend derived by one cooperative society from investment with another one is eligible for deduction under Section 80p(2)(d) of the Income Tax Act, 1961.
A Two-Member Bench comprising Partha Sarathi Choudhury, Judicial Member and GD Padmashali, Accountant Member observed that “The interest and dividend earned by the appellant society from its investment held with co-operative banks namely RDCC, being a registered co-operative society under respective state laws, qualifies for deductions under Section 80P(2)(d) of the Income Tax Act.
Consequently the views adopted by the tax authorities below are not in conformity with legal position and binding judicial precedents, hence deserves to be vacated. Resultantly, we set-aside the impugned order and reverse the denial of deduction.”
The Income Tax Appellate Tribunal ( ITAT ), Bangalore bench directed to rectify the assessment order passed under Section 143(3) of the Income Tax Act, 1961 regarding the 80P deduction . Therefore the bench further observed that AO while issuing show cause notice for rectification had not mentioned that the assessee had violated the principles of mutuality by dealing with nonmembers.
After analyzing the submission of both parties the bench comprising George George K (Vice President) and Chandra Poojari, (Accountant Member) allowed rectification of the assessment order passed under Section 143(3) of the Income Tax Act, 1961 regarding the 80P deduction.
The Income Tax Appellate Tribunal ( ITAT ) has granted relief to ISRO Employees Society by condoning the delay and directing National Faceless Assessment Centre ( NFAC ) to consider Section 80P(2)(d) deduction claims under Income Tax Act, 1961, taking into account the submitted affidavit.
A two member bench of the tribunal comprising Chandra Poojari ( Accountant member) and Beena Pillai ( Judicial member) deemed it appropriate to condone the delay as the reasons for the delay mentioned in the affidavits are sufficient to explain the delay caused in filing the present appeals before this Tribunal. ITAT therefore condoned the delay caused in filing the present appeals before this Tribunal in all the appeals under consideration. Accordingly, the application for condonation of delay dated 08.12.2023 stands allowed.
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