Section 80P after 2006: which societies s.80P(4) shuts out, interest on deposits, and the unresolved split over deposits with a co-operative bank. 31 entries, strongest first, with what each one decided in a sentence. Read down the list, then open the entry that fits your facts. The Co-operative Societies hub cross-lists everything that touches this area, including entries filed under another subject.
We are a state-level co-operative agricultural and rural development bank. Does 80P(4) block our deduction? No. The appellant is an apex co-operative society providing credit to its member societies, not a 'co-operative bank' within s.80P(4) read with the Banking Regulation Act, 1949, so the deduction under s.80P(2)(a)(i) is available.
Our club's surplus sits in fixed deposits with a bank that is itself a corporate member. Is the interest covered by mutuality? No. The Supreme Court held that the principle of mutuality does not apply to interest earned on fixed deposits made by a club with a bank, whether or not the bank is a corporate member of the club. The interest is ordinary income under s.2(24) and is taxed like any other income. The Court dealt in the same batch with income the clubs earned through their assets and resources from persons who are not members, and held that too is taxable.
My society lends to non-members too. Does that wipe out its 80P(2)(a)(i) deduction? No. The deduction stands: the society need not lend only for agricultural purposes, and lending to non-members does not disentitle it — only the profits from non-member loans fall outside the deduction. Section 80P(4) shuts out only co-operative banks licensed to carry on banking business.
The AO has taxed our society's transfer fees and non-occupancy charges. Is that right? No. The Supreme Court held that transfer charges, non-occupancy charges, common amenity fund charges and similar receipts collected by a co-operative society from its own members are covered by the principle of mutuality and are not income. On transfer charges the Court held that the amount is appropriated only after the transferee has been admitted to membership and is returned if admission is refused, so by the time it is retained the payer is a member.
The AO cites Citizen Co-operative Society to deny my 80P claim. How far does it go? Only as far as mutuality. The society there lost because its 'nominal members' were not members in law, the contributors to the surplus and the participants in it were not the same body, and it was in substance running a finance business outside the statute under which it was registered.
My society invested surplus funds in short-term bank deposits. Is that interest covered by 80P? No. Interest on surplus funds not required for immediate business use is not attributable to providing credit to members or to marketing their produce. It is income from other sources under s.56 and outside s.80P(2)(a)(i).
Our co-operative credit society filed its return late and lost the section 80P deduction under section 80AC. The Chief Commissioner has rejected our section 119(2)(b) condonation application for want of sufficient cause. Is that rejection sustainable? No, not on these facts. The Andhra Pradesh High Court set aside the Chief Commissioner's order refusing to condone the delay and directed that the return be treated as filed within time. The Court held that co-operative societies became liable to file returns only on the Finance Act, 2018 amendment, that a society run with minimal staff and unaware of the provisions is itself in genuine difficulty, and that the authorities must take a liberal approach towards co-operative societies in the teeth of CBDT Circular No. 13/2023. It did not decide the section 80P claim; that was left to be dealt with in assessment.
The Tribunal remanded the nominal member issue to the Assessing Officer but recorded findings on the merits while doing so, leaving the officer nothing to decide. Is there anything I can do about that in the High Court? Yes. The Karnataka High Court declined to interfere with the order of remand itself, but accepted that the Tribunal's observations on the merits might prejudice the assessee and clarified that the remand proceedings are to be considered independently, uninfluenced by any observations or findings recorded by the Tribunal on merits, strictly in accordance with Mavilayi Service Co-operative Bank and having regard to the relevant provisions of the Karnataka Co-operative Societies Act.
The PCIT revised my assessment saying a co-operative bank is not a co-operative society. Is that right? Not on the Gujarat view. A co-operative bank is itself a co-operative society registered under the State Co-operative Societies Act, so it falls within 'any other co-operative society' in s.80P(2)(d); the interest was deductible and the s.263 revision was set aside.
Our employees' credit society earns interest from the District Co-operative Bank and also from the treasury. The Commissioner (Appeals) refused s.80P(2)(d) on both. Where does the Kerala High Court stand? The Kerala High Court quashed the appellate orders so far as they refused the deduction, holding that the entitlement to deduct interest received by a co-operative society from its investments with other co-operative societies is settled in the assessee's favour by its own Division Bench decision in Pr. CIT v Peroorkada Service Co-operative Bank Ltd. (2022) 442 ITR 141 (Ker). Interest from a District Co-operative Bank was therefore deductible; interest from the treasury was not, and the year in which treasury interest was received was sent back for re-examination.
My co-operative society filed its return late and lost section 80P because of section 80AC. If the delay is condoned under section 119(2)(b), does the deduction come back? On this Karnataka view, yes. The Court held that section 80AC does not say in express terms that the deduction becomes inadmissible if the delay in filing the return is condoned, so an order under section 119(2)(b) condoning the delay clears the way for the claim. It adopted its earlier decision in Sullia Taluk Womens Multi Purpose Co-operative Society and read the Central Board's circular of 26 July 2023, which directs the authorities to admit and decide condonation applications from audited co-operative societies for assessment years 2018-19 to 2022-23 on the merits. The rejection of the society's application was quashed and the delay condoned, and the Court went on to quash the completed assessment as well and remit the claim for fresh consideration.
I have received a s.148A(b) notice and a s.148A(d) order saying my society's s.80P(2)(d) deduction on interest from a co-operative bank has escaped assessment. Can I challenge the notice itself rather than fight through the reassessment? In this case yes. The Madras High Court, in writ petitions against s.148A(b) notices, s.148A(d) orders and s.148 notices, held that a co-operative society registered under the State Co-operative Societies Act remains a co-operative society within s.2(19) whether or not it carries on banking, so interest from a co-operative bank qualifies under s.80P(2)(d); because the impugned orders were passed without considering that, they were set aside and the notices quashed.
We are a primary agricultural credit society drawing cash to lend to farmers. Must the bank still deduct under s.194N? Yes. The Madras High Court held that a primary agricultural credit co-operative society is not within the exceptions to s.194N, so the deduction on cash withdrawals above the threshold stands, and the requirement is non-negotiable except in line with the specific exceptions in the proviso. Relief, if any, has to come from the competent government authority; s.194N is not one of the sections for which a nil or lower deduction certificate can be sought under s.197.
The Assessing Officer taxed our interest on deposits under s.56 by simply citing Totgars, without answering our case that the deposits are a statutory reserve we are obliged to maintain and that the interest we paid on borrowings should be netted against it. Is that order sustainable? No. The Madras High Court set aside the assessments as non-speaking and passed without application of mind, holding it a fatal flaw that the Assessing Officer had brushed aside, in a single line, the society's arguments that the deposits were a statutory reserve and not surplus funds, that Nawanshahar Central Cooperative Bank applied, and that at worst the interest received should be netted against the interest paid. The Court expressed no opinion on the merits and remanded for a speaking order.
We are registered under the Karnataka Souharda Sahakari Act 1997, not the Karnataka Co-operative Societies Act 1959. The Assessing Officer says we are not a 'co-operative society' under s.2(19) and so cannot claim s.80P at all. Is that right? No. The Karnataka High Court declared that entities registered under the Karnataka Souharda Sahakari Act, 1997 fit the definition of 'co-operative society' in s.2(19) of the Income-tax Act, 1961 and are therefore entitled to stake their claim to the benefit of s.80P. The definition covers a society registered under the Co-operative Societies Act 1912 or under any other law for the time being in force in a State for the registration of co-operative societies, and the 1997 Act is such a law.
The Tribunal refused my society's s.80P(2)(a)(i) claim on bank fixed deposit interest saying it had already been given s.80P(2)(d). Can the two clauses be treated as interchangeable, and if the interest really is income from other sources, what happens to my cost of funds? No, they cannot. The Karnataka High Court held that s.80P(2)(a)(i) and s.80P(2)(d) are entirely different and distinct provisions, that a deduction given under (d) does not disentitle a society from claiming under (a)(i), and that the authorities cannot reject an (a)(i) claim by mixing up the two. It further held that even if the interest is assessable under s.56, the Tribunal, as the last fact finding authority, was obliged to examine the proportionate cost of funds and administrative expenses deductible under s.57, and it remanded the matter to the Assessing Officer.
My society earns interest on deposits with a co-operative bank. Is it deductible under 80P(2)(d)? On the Karnataka view, no. Interest on idle or surplus funds keeps its character as income from other sources whether the depositee is a scheduled bank or a co-operative bank, and clause (d) speaks only of 'any other co-operative society' — the words 'co-operative banks' are absent from it.
My society deposited part of the income from its members' business in a nationalised bank. The Assessing Officer says the interest is income from other sources and not deductible under s.80P(2)(a), relying on Totgars. Is there an answer? There is one, and it turns on two words. The High Court held that s.80P(2)(a) allows the whole of the profits and gains of business 'attributable to' the listed activities, not merely those 'derived from' them, that 'attributable to' is wider, and that where the original source of the deposits was the income from a listed activity the character of that income is not lost when it is temporarily deposited in a bank. Totgars was distinguished on its facts.
My society earns interest on deposits placed with a co-operative bank. The Assessing Officer says s.80P(2)(d) covers only investments with a co-operative society and a co-operative bank is not one. Is there authority the other way? Yes. The Karnataka High Court, Dharwad Bench, held that 'co-operative society' is a genus and 'co-operative bank' a species of it, so a co-operative bank is necessarily covered by the words 'co-operative society' and interest earned from it qualifies under s.80P(2)(d). It also held that the Supreme Court's decision in Totgars, being on s.80P(2)(a)(i), is inapplicable to a claim under s.80P(2)(d). But the same High Court, at the same Bench, took the opposite view five months later on the same assessee.
We lost on s.80P before the Tribunal. Can we raise the s.57 cost of funds point for the first time in the High Court, and does interest we charge our own employees qualify under s.80P(2)(a)(i)? No on both counts, on this decision. The Punjab and Haryana High Court refused to entertain questions on s.57(iii) and on deduction of costs against interest assessed under s.56 because no such plea had been argued before the Tribunal, holding that they did not arise from the Tribunal's order and raised no substantial question of law. It also upheld the Tribunal's view that s.80P(2)(a)(i) is available only in respect of the society's core activities, so that interest from other banks and interest received from employees who are not members does not qualify.
The AO cites Totgars against my credit society's deposit interest. Can I still claim 80P? Yes, if the deposits arose in the course of the credit business. 'Attributable to' is wider than 'derived from', so interest on short-term deposits of funds not immediately needed for lending remains within s.80P(2)(a)(i).
Our co-operative society has receipts that fall outside the activities named in section 80P(2)(a). Can we fall back on the residual deduction in clause (c), and what do we have to show? It depends, and the test is narrower than the words look. The Kerala High Court held that clause (c) does reach receipts from sources other than the actual conduct of the business, because 'attributable to' is much wider than 'derived from'. But the receipt must be attributable to an activity that the society itself carries on. 'Activity' is wider than 'business' and connotes a specified form of supervised action or field of action. On that test the society failed: rent from letting surplus space in the building it owned and used for its own banking work was held not to arise from such an activity, and the deduction was refused.
My society filed its return only in response to a 148 notice. Can it still claim 80P? No. Section 80AC(ii) makes filing by the s.139(1) due date a condition precedent for deductions under Part C of Chapter VI-A, which includes s.80P, and a return filed pursuant to a s.148 notice does not cure the default.
My co-operative credit society filed Form 10-IF opting into s.115BAD and then claimed deduction under s.80P in the same return. CPC has disallowed the whole s.80P deduction under s.143(1). Is there anything to be said? There is an argument, and the Tribunal let it be run — but it did not decide it. On these facts the Tribunal restored the matter for fresh adjudication on the merits, recording the case that the society did not satisfy the conditions in s.115BAD(2) and had filed Form 10-IF erroneously, and that the adjustment made under s.143(1) was not within the permissible adjustments. The underlying rule is unforgiving and should be understood before any co-operative society files Form 10-IF: s.115BAD(2)(i) requires total income to be computed 'without any deduction ... under any of the provisions of Chapter VI-A other than the provisions of section 80JJAA', and s.80P is in Chapter VI-A.
Our credit society takes deposits and repays loans in cash to members. Can the department levy 271D and 271E on the whole amount? Not where the transactions are genuine dealings with members in the ordinary course. The Tribunal upheld the deletion of penalties under s.271D and s.271E on cash deposits and repayments of roughly Rs 28 crore and Rs 27 crore, treating a co-operative credit society's dealings with its own limited membership as attracting the reasonable cause protection in s.273B, particularly where no addition was made in the assessment and the genuineness of the transactions was not in dispute.
My society has nominal and associate members. Does that alone destroy the 80P deduction? No. Where the State Co-operative Societies Act permits those classes of membership, their presence is not by itself a ground to disallow s.80P. The outcome was mixed, though: rental, commission and miscellaneous receipts were held ineligible.
CPC denied my society's 80P in a 143(1) intimation because the return was late. Can it? Not by a blanket adjustment. Adjustments under s.143(1) are confined to patent mistakes and arithmetical errors, so the CPC could not summarily disallow the s.80P claim; a return filed under s.139(4) is not automatically outside Chapter VI-A, and a bona fide, properly documented claim should be decided on merits.
The Assessing Officer has taxed our society's bank FD interest as income from other sources and refused to allow the maintenance expenditure against it. Is there an answer? On these facts, yes - but read what the Tribunal actually did before relying on it. The Ahmedabad Bench held that a co-operative housing service society's fixed deposit interest was directly linked to the activity of maintaining the society, so the receipts had to be set against the maintenance expenditure they funded rather than taxed gross. The addition of Rs 24,31,919 on the fixed deposit interest was deleted, and the rent and other small receipts were treated the same way, leaving the net surplus of Rs 4,64,486 that the society had itself shown. The Tribunal then directed the Assessing Officer to allow the deduction of Rs 50,000 claimed under section 80P(2)(c)(ii). The reasoning ran through the principle of mutuality as stated by the Supreme Court in Venkatesh Premises Co-operative Society, and it did not deal with the Secunderabad Club decision on which the Commissioner (Appeals) had relied.
My society's chartered accountant told the penalty officer it was a co-operative bank. Can the department use that admission to deny section 80P? No. The Mumbai Bench held that no addition and no denial of a deduction can be made merely on the admission of a person, still less the assessee's authorised representative, without going into the actual charter documents, and that there is no estoppel against the statute. The society's chartered accountant had argued before the Commissioner (Appeals) in a section 271D penalty matter that it was a co-operative bank, and the penalty was deleted on that basis; he later filed an affidavit saying it had been a genuine misinterpretation. On the bye-laws and objects the society took deposits only from members and lent only to members, and it held no licence from the Reserve Bank of India, so it was a co-operative credit society and not a co-operative bank. Section 80P(4) did not shut it out and the deduction under section 80P(2)(a)(i) was allowed for each of the years in appeal.
A new manufacturing co-operative society wants the 15 per cent rate. What does s.115BAE require, and is there any decided case on it? Section 115BAE, inserted by the Finance Act 2023 with effect from 1 April 2024, taxes a resident co-operative society at 15 per cent from AY 2024-25 if it was set up and registered on or after 1 April 2023 and commenced manufacturing or production of an article or thing on or before 31 March 2024, and if the other conditions in sub-section (2) are met. I located no judicial decision on the section — no High Court, Tribunal or Supreme Court authority on s.115BAE was found, and this entry states the statute, not case law.
The Assessing Officer says my society is a co-operative bank and so s.80P(4) denies the whole deduction. What does he have to establish before he can say that? Section 80P(4) provides that the provisions of s.80P shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank, and its Explanation borrows the meanings of 'co-operative bank' and 'primary agricultural credit society' from Part V of the Banking Regulation Act, 1949. Under Part V a co-operative bank is only one of three things — a State co-operative bank, a central co-operative bank or a primary co-operative bank — so unless the society answers one of those three descriptions it is not hit by sub-section (4), whatever its name or its bye-laws call it.
Nothing here is written from memory. Every entry was found through a search, and the page for it links to where it was found, so you can check it rather than take our word for it. What has not happened yet is the part that matters most: nobody has read the certified copy of each judgment and signed off the summary against it. Until that is done, each page says Not yet CA-verified, and it means exactly what it says. Read the source before you rely on an entry in a reply to an Assessing Officer or in an appeal.