Alaknanda Sahakari Gruharachana Sanstha Maryadit Vs ITO (ITAT Pune)
The assessee, a co-operative housing society registered under the Maharashtra State Co-operative Societies Act, appealed against the order of the Addl./Jt. Commissioner of Income Tax (Appeals), Delhi, arising from an intimation under Section 143(1) of the Income-tax Act for AY 2021-22. The assessee had earned interest income of ₹1,47,640 from fixed/term deposits and ₹3,979 from savings account balances maintained with Pune District Central Co-operative Bank (PDCC) and claimed deduction of ₹1,51,620 under Section 80P(2)(d). The return declaring nil income was processed under Section 143(1), and the deduction was denied on the ground that the interest was received from a co-operative bank, making the claim ineligible under Section 80P(4). The first appellate authority upheld the denial.
The Tribunal observed that there was no dispute regarding the assessee’s status as a co-operative society or the nature of the interest income. It held that Section 80P(2)(d) requires only that both the recipient claiming the deduction and the payer of the interest or dividend be co-operative societies registered under the applicable co-operative societies law. It found that PDCC was registered under the Maharashtra State Co-operative Societies Act and therefore satisfied the statutory requirement.
The Tribunal further held that Section 80P(4) applies only where the claimant itself is a co-operative bank within the meaning of Part V of the Banking Regulation Act, 1949. Since the assessee was a housing co-operative society and neither a co-operative bank nor a credit co-operative society, Section 80P(4) did not affect its claim. It also observed that the Revenue had not established that PDCC was a co-operative bank within the meaning of Explanation (a) to Section 80P(4). Following the judicial precedents cited in the order, the Tribunal held that Section 80P(4) does not jeopardise the claim of deduction under Section 80P(2)(d) on interest or dividend received from another co-operative society irrespective of the payer’s classification. The orders of the lower authorities were vacated, the denial of deduction was reversed, and the assessee’s appeal was allowed.
