ITAT Mumbai Allows Section 80P(2)(d) Deduction to Housing Society, Condoning Long Delay

The “H (SMC)” Bench of the Income Tax Appellate Tribunal, Mumbai, has granted relief to Hira Manek Co-operative Housing Society Ltd. by condoning substantial delays of 679 days and 650 days and allowing deduction under Section 80P(2)(d) of the Income-tax Act for Assessment Years 2020–21 and 2021–22.

The Tribunal accepted the society’s explanation that it is a small, non-profit housing society managed by senior citizen office-bearers without professional assistance, and that the delay was neither deliberate nor mala fide. Relying on the Supreme Court’s ruling in Collector, Land Acquisition v. MST Katiji, the Bench held that procedural rules should advance substantial justice.

On merits, the Tribunal ruled that interest income earned from deposits with co-operative banks, including Mumbai District Central Co-operative Bank and Saraswat Co-operative Bank, qualifies for deduction under Section 80P(2)(d). Following consistent coordinate bench decisions, it clarified that co-operative banks remain “co-operative societies” for this purpose and Section 80P(4) does not bar such deduction. Consequently, both appeals were allowed and the disallowance was set aside.