Bangalore Credit Co-Operative Society Limited Vs Income Tax Officer

BANGALORE CREDIT CO-OPERATIVE SOCIETY LIMITED, (REP. BY S. SOMASHEKAR) No.723/1, NEW No.37/1, 10^TH MAIN, 36^TH CROSS, JAYANAGAR 4^TH BLOCK, BENGALURU 560 011, PAN:AAAAB1598B.

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…APPELLANT

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(BY SRI S.V. RAVISHANKAR, ADVOCATE FOR SMT. LOCHANA S. BABU, ADVOCATE)

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AND:

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INCOME TAX OFFICER, WARD 7(2)(1), ROOM No.319, 3^RD FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. (AY-2020-2021)

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…RESPONDENT

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(BY SRI Y.V. RAVIRAJ, SENIOR STANDING COUNSEL)

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2 -

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NC: 2026:KHC:13953-DB ITA No. 185 of 2025 C/W ITA No. 184 of 2025

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HC-KAR

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THIS ITA/ INCOME TAX APPEAL UNDER SECTION 260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS STATED ABOVE. AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT. TO HOLD THE IMPUGNED TRIBUNAL ORDER TO THAT EXTENT HELD AGAINST THE APPELLANT, AS BAD IN LAW, IN THE ORDER PASSED IN ITA No.2348/BANG/2024 AND CO.,5/BANG/2025 DATED 30.06.2025 FOR THE IMPUGNED ASSESSMENT YEAR 2020-2021 ANNEXURE - A.

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IN ITA No. 184/2025

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BETWEEN:

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BANGALORE CREDIT CO-OPERATIVE SOCIETY LIMITED, (REP. BY S. SOMASHEKAR) No.723/1, NEW No.37/1, 10^TH MAIN, 36^TH CROSS, JAYANAGAR 4^TH BLOCK, BENGALURU 560 011, PAN:AAAAB1598B.

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…APPELLANT

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(BY SRI S.V. RAVISHANKAR, ADVOCATE FOR SMT. LOCHANA S. BABU, ADVOCATE)

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AND:

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INCOME TAX OFFICER, WARD 7(2)(1), ROOM No.319, 3^RD FLOOR, BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BENGALURU 560 095. (AY-2018-2019)

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…RESPONDENT

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(BY SRI Y.V. RAVIRAJ, SENIOR STANDING COUNSEL)

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THIS ITA/ INCOME TAX APPEAL UNDER SECTION 260-A OF INCOME TAX ACT 1961, PRAYING TO HOLD THE IMPUGNED TRIBUNAL ORDER, TO THAT EXTENT HELD AGAINST THE APPELLANT, AS BAD IN LAW, IN THE ORDER PASSED IN ITA

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NC: 2026:KHC:13953-DB ITA No. 185 of 2025 C/W ITA No. 184 of 2025

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3 -

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HC-KAR

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No.2347/BANG/2024 AND CO No.4/BANG/2025 DATED 30.06.2025 FOR THE IMPUGNED AY 2018-19, ANNEXURE - A.

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THESE APPEALS COMING ON FOR ADMISSION THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE S.G.PANDIT

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and

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HON'BLE MR. JUSTICE K. V. ARAVIND

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ORAL JUDGMENT

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(PER: HON'BLE MR. JUSTICE K. V. ARAVIND)

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Heard Sri S.V. Ravishankar, learned counsel appearing for

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Smt. Lochana S. Babu, learned counsel for the appellantAssessee and Sri Y.V. Raviraj, learned Senior Standing Counsel for the respondent-Revenue.

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These appeals arise out of a common order in ITA Nos.2347 & 2348/Bang/2024 dated 30.06.2025, relating to the Assessment Years 2018–19 and 2020–21, raising common substantial questions of law. Both the appeals are heard and disposed of together by this common judgment.

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Both the appeals raise the following substantial questions of law: " (i) Whether the Tribunal was justified in holding that the interest income earned from investments is not attributable to the business

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4 - NC: 2026:KHC:13953-DB ITA No. 185 of 2025 C/W ITA No. 184 of 2025

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HC-KAR

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of the appellant and consequently not eligible for deduction under Section 80P(2)(a(i) of the Act?

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(ii) Whether the Tribunal was justified in holding that the interest earned from deposits made in co-operative banks are not qualified for deduction under Section 80P(2)(d) of the Act? "

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Insofar as the second question of law is concerned,

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Sri Y.V. Raviraj, learned Senior Standing Counsel for the Revenue, submits that the same is no longer res integra in view of the decision in ITA No.93/2024, decided on 16.09.2025

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[M/s. Judicial Employees House Building Cooperative Society Limited vs. Income Tax Officer].

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Learned counsel for the appellant-Assessee is not in a

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position to dispute the above submission.

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6. In ITA No.93/2024, this Court has held as under:

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" 8. …, we note that the assessee has made investment and earned interest income from the Mysore and Chamarajanagar District Co-operative Central Bank Ltd. A Co-operative Bank is a Co-operative Society registered under the Co-operative Societies Act, whether the Co-operative Society assumes the character of the Co-operative Bank depends on the activities carried on by it.

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NC: 2026:KHC:13953-DB ITA No. 185 of 2025 C/W ITA No. 184 of 2025

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HC-KAR

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9. It is undisputed that the Mysore and Chamarajanagar District Co-operative Central Bank Ltd., has banking license issued by the Reserve Bank of India under the Banking Regulation Act and engaged in banking activities. Merely the Co-operative Bank is also a Co-operative Society, the investment in Co-operative Bank cannot be considered for deduction under Section 80P(2)(d) of the Act. In the light of the judgment in second TOTAGARS CO-OPERATIVE SALE SOCIETY (supra), dated 16.06.2017 followed by the Tribunal, we are of the view that in view of the banking license of the Mysore and Chamarajanagar District Co-operative Central Bank Ltd., the same is a Co-operative Bank. Once the investment is made in a Co-operative Bank, Sub-Section (4) of Section 80P steps in and operates as a bar for deduction under Section 80P(2)(d) of the Act.

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10. The Tribunal rightly following the judgment of this Court in the second TOTAGARS CO-OPERATIVE SALE SOCIETY (supra) has held that the assessee is not entitled to claim deduction under Section 80P(2)(d) of the Act. We agree with the finding recorded by the Tribunal based on the judgment of this Court. Further, there are no distinguishable facts or law placed to take a different view. Accordingly, no substantial questions of law would arise. "

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In view of the order in ITA No.93/2024, this question does not arise for consideration before this Court.

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6 - NC: 2026:KHC:13953-DB ITA No. 185 of 2025 C/W ITA No. 184 of 2025

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HC-KAR

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Insofar as question No.1 relating to deduction under Section 80P(2)(a)(i) of the Act is concerned, the Tribunal has remanded the matter to the file of the Assessing Officer for determining the head of income. In view of the order of remand, learned counsel for the appellant has not pointed out any fundamental error in the order of remand. An order of remand would not give rise to a substantial question of law unless perversity is demonstrated. Upon examination of the order of the Tribunal, we find that the remand is justified and no perversity is discernible so as to warrant consideration of this substantial question of law by this Court.

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In light of the above, both the appeals fail and are accordingly dismissed .

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Sd/(S.G.PANDIT) JUDGE

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Sd/(K. V. ARAVIND) JUDGE

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MV

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List No.: 1 Sl No.: 20

Bangalore Credit Co-Operative Society Limited v. Income Tax Officer

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Bangalore Credit Co-Operative Society Limited v. Income Tax Officer

Case brief

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