Poona Post and Telecom Coop. Credit Society Ltd. Vs ITO (ITAT Pune)
Pune ITAT Allows Section 80P Deduction on Interest and Dividend from Co-operative Bank Investments; Section 80P(4) Held Inapplicable to Credit Co-operative Society
The Pune ITAT held that a credit co-operative society is entitled to deduction under sections 80P(2)(a)(i) and 80P(2)(d) in respect of interest and dividend earned from investments with a co-operative bank, including the Pune District Central Co-operative Bank (PDCC). The Tribunal observed that the issue was no longer res integra and followed a series of co-ordinate bench decisions holding that section 80P(4) excludes only co-operative banks claiming deduction, and does not disentitle a co-operative credit society from claiming deduction on income received from another co-operative society. It reiterated that for the purposes of section 80P(2)(d), the relevant test is whether both the recipient and the payer are co-operative societies registered under the applicable co-operative law, and not whether the payer also functions as a co-operative bank. Rejecting the Revenue’s reliance on section 80P(4), the Tribunal held that the assessee was entitled to deduction on the interest and dividend received from PDCC as well as the eligible interest income earned from investments, relying upon the decisions in Goa PWD Staff Co-operative Credit Society, ACGL BBD Employees Co-operative Credit Society, Mavilayi Service Co-operative Bank Ltd., and Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd. Accordingly, the Tribunal reversed the order of the CIT(A) and allowed the assessee’s claim for deduction under sections 80P(2)(a)(i) and 80P(2)(d).
