The court confirms eligibility for section 80P deductions on interest income earned from cooperative banks.

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘B’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.5764/Del/2024 Assessment Year: 2020-21

Assessee by Sh. J.N. Shukla, Adv.

Department by Sh. Rajesh Kumar Dhanesta, Sr. DR Date of hearing 05.06.2025 Date of pronouncement 05.06.2025 ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2020-21, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1065623980(1), dated 13.06.2024 involving proceedings under section 144 of the Income-

tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

2. It emerges during the course of hearing that both the learned lower authorities have disallowed the assessee’s section 80P deduction claim under Chapter VI-A of Rs.5,12,10,487/- representing interest income from savings and other deposit accounts etc. thereby treating the same as income from other sources in light of Totgars Co-operative Sale Society Ltd. Vs. ITO , Karnataka [2010] 188 Taxman 282 (SC) followed by yet another disallowance on business expenses amounting to Rs. 98,44,129/- respectively in the assessment order dated 22.09.2022 and upheld in the lower appellate discussion.

3. Learned departmental representative first of all submits that the CIT(A)/NFAC has refused to condone the assessee’s delay of 280 days in filing of the lower appeal instituted on 03.08.2023 which deserves to be upheld. We find no merit in the Revenue’s first and foremost technical objection as the assessee has explained all the circumstances beyond its control before the lower appellate proceedings. We thus decide the instant delay in assessee’s favour and against the department in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC). The above delay in filing the assessee’s lower appeal stand condoned.

4. The Revenue’s second vehement contention is that both the learned lower authorities have rightly disallowed the assessee’s section 80P deduction claim representing interest income from savings account maintained with nationalized/cooperative banks (supra), as the case may be. We are of the considered view that the Revenue’s instant first and foremost substantive argument hardly deserves to be accepted in light of ITO Vs. Shri Bhairavnath Multistate Cooperative Credit Society Ltd. (2024) 164 taxmann.com

382 (Pune Trib.), as under:

“5. We heard the rival submissions and perused the material on record. We find this issue is no more res integra by virtue of catena of decisions passed by the Coordinate Benches of this Tribunal. In the present case, we find that admittedly the interest income was earned from the investments out of surplus funds made with cooperative banks/societies, the cooperative bank is also a specie of cooperative society, therefore, the interest income earned by the cooperative society from the cooperative banks qualifies for deduction u/s.80(P)(2)(d) of the Act. Such interest also qualifies for exemption u/s.80P(2)(a)(i) as held by the Co-ordinate Bench of Pune Tribunal in the case of Nashik Road Nagari Sahkari Patsanstha Limited Vs. ITO in ITA No.1700/PUN/2017 wherein the Tribunal held as under :-

"9. We heard the rival submissions and perused the material on record. Admittedly, the appellant is a Cooperative society formed un