Umayanallor Service Co-op. Bank Ltd. vs. The Income Tax Officer

Parties Involved

Facts Summary

The assessee, Umayanallor Service Co-op. Bank Ltd., has filed twin appeals against the orders of the National Faceless Appeal Centre, Delhi, which disallowed the deduction claim under section 80P(2)(a)(i) of the Income Tax Act, 1961 for the assessment years 2016-17 and 2018-19. The assessee argues that the interest income from deposits made in cooperative banks should be eligible for deduction. The Tribunal has reviewed the case files and heard both parties. The Tribunal has adopted the reasoning from a recent decision of the High Court of Kerala in PCIT v. Peroorkada Service Co-op. Bank Ltd. [2022] 442 ITR 141 (Ker), which held that interest income from District Cooperative Bank/State Cooperative Bank does not come within the ambit of Section 80P(2)(a)(i) and is only eligible for deduction under Section 80P(2)(d).…

Legal Issues

• 1. Whether the interest income from deposits made in cooperative banks is eligible for deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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