ITAT Panaji Allows Section 80P(2)(d) Deduction on Interest From Co-operative Society

ACGL BBD Employees Co-op. Credit Society Ltd. Vs ITO (ITAT Panaji)

The assessee, an employee co-operative credit society registered under the State Co-operative Societies Act, appealed against the order of the National Faceless Appeal Centre arising from an assessment under Section 143(3) of the Income-tax Act for AY 2017-18. The Tribunal first condoned a one-day delay in filing the appeal after finding the explanation in the supporting affidavit sufficient.

The assessee had earned interest income of ₹21,18,607 from fixed/term deposits maintained with Goa State Co-operative Bank Ltd. (GSCBL) and claimed deduction under Section 80P(2)(d), resulting in a nil income return. The Assessing Officer denied the deduction on the ground that the interest was received from a co-operative bank and, therefore, the claim was barred by Section 80P(4). The first appellate authority upheld the assessment.

The Tribunal noted that there was no dispute that the assessee was a co-operative society entitled to claim deduction under Section 80P(2)(d). It held that the provision requires only that both the recipient and the payer of the interest or dividend be co-operative societies registered under the relevant co-operative societies law. The Tribunal found that GSCBL was also registered as a co-operative society under the Goa State Co-operative Societies Act and, therefore, the statutory conditions under Section 80P(2)(d) stood satisfied.