A co-operative society is entitled to claim deductions under Section 80P(2)(d) for interest income earned from investments made with co-operative banks, as these banks qualify as co-operative societies under the Income Tax Act.

Feeling aggrieved by order of first-appeal dated 04.11.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 13.09.2022 passed by learned Assessment Unit of Income-tax Department [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2020-21, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

2. The registry has informed that the present appeal is delayed by 181 days and therefore time-barred. The assessee has filed an application/affidavit for condonation of delay; the same is scanned and re-produced for an immediate reference:

3. The averments made by assessee in above affidavit, which are self- explanatory and which do not require repetition, were discussed and the Ld. DR for revenue does not have any objection if the bench condones delay and accordingly left it to the wisdom of bench. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause”for not presenting appeal within prescribed time. It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the facts of case, the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit appeal and proceed with hearing.

4. The assessee is a co-operative society engaged in business of providing credit facilities to its members. For AY 2020-21, the assessee filed return declaring total income of Rs. 40/-. In the return of income so filed, the assessee claimed deduction of Rs. 22,95,983/- u/s 80P(2)(d) pertaining to interest income of Rs. 22,20,130/- from co-operative banks (+) dividend income of Rs. 75,853/- from shares of co-operative banks. The case of assessee was selected for scrutiny-assessment and the AO passed order u/s 143(3). In the assessment so finalised, the AO disallowed deduction claimed by assessee. During first appeal, the CIT(A) approved AO’s order. Aggrieved, the assessee has come in present appeal before us. Issue of deduction u/s 80P(2)(d) on interest earned from co-operative banks:

5. This issue is being decided by this very bench in a separate order of even date in the case of M.P. Matsya Mahasangh Sahakari, ITA No. 358 to 359, 328 to 330/Ind/2024 in favour of assessee. We re-produce below the relevant portion of order for an immediate reference: M.P. Matsya Mahasangh Sahakari, ITA No. 358 to 359, 328 to 330/Ind/2024 “Issue of deduction u/s 80P(2)(d):

4. This issue is involved in all five (5) years. At first, we re-produce below the provision of section 80P(2)(d) and section 80P(4) which shall be referred to in subsequentdiscussions:

“Deduction in respect of income of co-operative societies:

80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee.

(2)