Police Karmachari Sahakari Pat Sanstha Gondia v. ITO

Case snapshot

Sections / provisions: 80P

Questions before the Court / Tribunal

• Section 80P deduction for member-credit cooperative society: The reported order concerns a cooperative credit society providing facilities to members and allows section 80P relief on the reported income profile. The official order should resolve treatment of any bank-interest component.

Material facts and background

The appeal by the assessee is emanating from the impugned order dated 30/01/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2017–18. 2.

3. On the facts and in law, Ld. A.O erred in disallowing the deduction claimed by the appellant only on the basis of whims and surmises, without following the settled principle of consistency. 4. The appellant craves leave to add, alter, vary, omit, amend or delete one or more of the grounds of appeal before, or at the time of hearing of the appeal so as to enable your honour to decide this appeal according to law.”

appeal before the Tribunal, the learned Counsel for the assessee furnished an affidavit, the contents of which are reproduced below:– “I, Subhash Shyamrao Raut, Authorized Signatory of Police Karmachari Sahakari Pat Sanstha Gondia, aged 38, resident of, behind Datta mandir, Chhota Gondia, Gondia-441601, state on solemn affirmation as under: That the cause for delay in filing the Appeal against the Order of learned CIT(A), NFAC ('the learned CIT(A)') dated 30/01/2024 is as follows: A. That the order passed by the learned CIT(A) is dated 30/01/2024 which was uploaded on the IT portal. That the due date for filing Appeal was within 60 days from receipt of the aforesaid order i.e 30/03/2024. B. That the Assessee has filed appeal on 29/04/2024. Thus, there has been a delay of 30 days in filing the Appeal by the Assessee. Sufficient explaining Cause the delay in filing the Appeal C. That, the Assessee case could not represent his case before learned CIT(A). The notices and the order passed by the CIT(A) were sent to email IDs that belonged to erstwhile consultant and certain staff members of the appellant society. Unfortunately, these individuals failed to inform the management of the...

The assessee is a co-operative society engaged in the business of banking with its members. Assessee is eligible for deduction u/s. 80P of IT Act. Assessee filed its return of Income u/s. 139(1) of the Act on 25.03.2018 declaring total income of Rs. NIL after claiming deduction of Rs. 72,09,175/u/s. 80P of the Act. That without acknowledged the facts that and circumstances of the case the Ld. AO disallowed claim of deduction of Rs. 72,09,175/-made u/s. 80P of the Act which is unjustified, arbitrary and deserves to be deleted." 5.3 DECISION 5.3.1. The appellant's claim is of eligibility for deduction u/s 80P(2)(a)(i). Even in the assessment proceedings, apart from filing the financial statements, no other material is noted on record. To claim the said exemption, the appellant must fulfill the following: (a) be a registered cooperative society under the relevant state Act (b) be doing the specified activity of providing credit to its members. Business with non-members even if it is the specified activity is not eligible for deduction as held by the Apex Court in case of Mavilayi Service Co-operative Bank, Calicut (2021) 431 ITR 1 (SC). (c) entire income should be from the specified...

05. Considering the above facts on record, the total income of the assessee is computed as under:– Income from Business & Profession

Appellant / assessee submissions

appeal before the Tribunal, the learned Counsel for the assessee furnished an affidavit, the contents of which are reproduced below:– “I, Subhash Shyamrao Raut, Authorized Signatory of Police Karmachari Sahakari Pat Sanstha Gondia, aged 38, resident of, behind Datta mandir, Chhota Gondia, Gondia-441601, state on solemn affirmation as under: That the cause for delay in filing the Appeal against the Order of learned CIT(A), NFAC ('the learned CIT(A)') dated 30/01/2024 is as follows: A. That the order passed by the learned CIT(A) is dated 30/01/2024 which was uploaded on the IT portal. That the due date for filing Appeal was within 60 days from receipt of the aforesaid order i.e 30/03/2024. B. That the Assessee has filed appeal on 29/04/2024. Thus, there has been a delay of 30 days in filing the Appeal by the Assessee. Sufficient explaining Cause the delay in filing the Appeal C. That, the Assessee case could not represent his case before learned CIT(A). The notices and the order passed by the CIT(A) were sent to email IDs that belonged to erstwhile consultant and certain staff members of the appellant society. Unfortunately, these individuals failed to inform the management of the...

Revenue / respondent submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Court / Tribunal analysis and reasoning

delay was neither intentional nor due to negligence but arose due to unavoidable circumstances beyond the control of the Assessee. F. Subsequently, the assessee society became aware of the notices and the resultant demand only upon receiving physical copies of demand notices from the Income Tax Department. At this point, the management promptly took necessary steps to obtain the order, review it, and prepare for filing an appeal. G. Accordingly, the Assessee society engaged a new consultant for handling tax- related matters. It was only then, the new consultant informed the Assessee about passing of adverse order by learned CIT(A) dated 30/01/2024. During the transition period, the communication gap caused by the change in consultants led to further delay in discovering the order and initiating action to file an appeal. H. Considering all the factors, there was an inadvertent delay of 30 days in filing the appeal. There was no malafide intention and the Assessee always wanted to contest the addition made in the assessment order. Therefore, the Assessee prays that the delay of 30 days be kindly condoned. I. In view of above it is submitted that there was a bonafide lapse in delay...

Operative decision and relief

05. Considering the above facts on record, the total income of the assessee is computed as under:– Income from Business & Profession

nature of activity of the assessee is never shrouded with doubt, it is a natural corollary that concomitant deduction under section 80P(2)(a)(i) of the Act has to be extended. The learned CIT(A) has trudged on a wrong path by discussing about certain issues which were never in the realm of assessment. Consequently, we overturn the impugned order passed by the learned CIT(A) by allowing the grounds raised by the assessee. 8.

In the result, appeal by the assessee stands allowed. Order pronounced in the open Court on 05/02/2025

Authorities and precedents appearing in the judgment

• Totgars Co-operative Sale Society Ltd. vs. Income-tax Officer (SC)
• Hubballi v. Totagars Co-operative Sale Society

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on Section 80P deduction for member-credit cooperative society. The operative result is classified as Allowed. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Section 80P deduction for member-credit cooperative society. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Use the judgment as a fact-specific precedent: match the statutory version, assessment period, procedural stage and evidentiary record before relying on the result.
• Check whether a later High Court/Supreme Court order has affirmed, reversed, distinguished or rendered the decision academic.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

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