Case Law Details
Jankalyan Nagari Sahakari Patsanstha Ltd Vs ITO (ITAT Pune)
In a recent judgment that has brought a sigh of relief to cooperative societies across India, the Income Tax Appellate Tribunal (ITAT), Pune, has ruled in favour of the appellant, Jankalyan Nagari Sahakari Patsanstha Ltd., in its dispute against the Income Tax Officer (ITO). The tribunal’s ruling emphasized the eligibility of interest income from Fixed Deposits with Cooperative/Scheduled Banks for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961.
This ruling is particularly significant given the contradictory verdicts delivered by various High Courts across the country on this matter. Many previous judgments, like those by the Punjab & Haryana, Gujarat, Delhi, and Kolkata High Courts, denied the eligibility of such income for deduction under Section 80P(2)(a)(i) of the Act. However, the Karnataka, Telangana, Andhra Pradesh, Calcutta, and Madras High Courts ruled in favour of the eligibility. The ITAT Pune’s recent decision has opted to follow the latter interpretations, creating a more favourable environment for cooperative societies.
The tribunal, based on its review, established that the interest income earned on fixed deposits with cooperative/scheduled banks is an integral part of the business income of a cooperative society. As such, it qualifies for deduction under Section 80P(2)(a)(i) of the Act, bringing this contentious issue to a definitive resolution at the ITAT level.
FULL TEXT OF THE ORDER OF ITAT PUNE
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