ITAT Surat Grants Section 80P(2)(d) Deduction on Co-operative Bank Interest for AY 2018-19

The Surat bench of the Income Tax Appellate Tribunal condoned a procedural delay of 146 days in filing and proceeded to allow the deduction under Section 80P(2)(d) of the Income Tax Act regarding interest income earned from co-operative banks for assessment year 2018-19. The tribunal reviewed the substantive grounds of the appeal and overturned the lower tax authorities' decision to deny the tax exemption on inter-co-operative investments.

This ruling addresses the long-standing tax treatment of interest derived by co-operative societies from deposits held with co-operative banks, offering relief against departmental disallowances. Section 80P permits certain deductions for co-operative societies, and this decision clarifies its application to interest income from co-operative banking institutions.

Co-operative societies facing similar disallowances on interest earned from co-operative bank deposits should evaluate their assessment records and cite this ruling in defense of their deduction claims. Tax practitioners must ensure that appeal filings and computations correctly distinguish co-operative bank investments to support parity with this precedent.