ITO Vs Reserve Bank Officers Co-Op. Credit Society Ltd. (ITAT Mumbai)
ITAT Mumbai: Interest from Co-Operative Banks Eligible u/s 80P(2)(d)-Consistency Principle Applied
The Mumbai ITAT held that a co-operative credit society is entitled to deduction under Section 80P(2)(d) on interest income earned from deposits with co-operative banks, as such banks qualify as co-operative societies under the Act.
The Tribunal rejected the Revenue’s reliance on Section 80P(4), clarifying that the restriction applies only to co-operative banks claiming deduction, and not to co-operative societies earning interest from them.
It was further noted that the issue was already decided in favour of the assessee in its own case for earlier years, and in absence of any change in facts or law, the principle of consistency must be followed.
However, the ITAT directed the Assessing Officer to verify the quantum of deduction claimed, ensuring that only eligible income is allowed.
Accordingly, the Revenue’s appeal was dismissed, reaffirming that interest from co-operative banks qualifies for deduction u/s 80P(2)(d) subject to verification.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal has been preferred by the Revenue against the order dated 18.09.2025, impugned herein, passed by Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2018-19.
