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2022 (6) TMI 1349 - AT - Income TaxRevision u/s 263 - Deduction u/s 80P(2)(a)(i) - assessee had earned an amount as interest income on deposits with Banks - HELD THAT:- As per section 80P(2)(a)(i) reproduced above, the sums referred in sub-section (1) would be in case of a co-operative society engaged in carrying on the business of banking or providing credit facilities to its members, the whole of the amount of profits and gains of business attributable to any one or more of such activities. As per section 80P(4), the provisions of section 80P would not apply in relation to any co-operative bank other than Primary Agricultural Credit Society or Primary Co-operative Agricultural and Rural Development Bank. As per the explanation, the terms “co-operative bank” and “primary agricultural credit society” shall have the meanings respectively assigned in Part V of the Banking Regulation Act, 1949. We note that by virtue of section 80P(4), the co-operative banks other than those mentioned therein were meant to be excluded for the purpose of deduction u/s 80P. In this context, in the case of M/s. Jafri Momin Vikash Co-operative Society Ltd. [2014 (2) TMI 28 - GUJARAT HIGH COURT] has held that exclusion clause of section 80P(4) will not apply to cases where the assessee is a primary agricultural co-operative credit society. PCIT while arriving at a conclusion to set aside the impugned assessment order for fresh consideration by the AO has relied on the decision of Totagars Co-operative Societies Ltd. [2010 (2) TMI 3 - SUPREME COURT] to which ld. counsel placed on record that the said decision is not applicable to the facts of the assessee duly supported by the financial details submitted before us which are reproduced above. The order of the AO may be or may not be wrong. CIT cannot direct reconsideration on this ground but only when the order is erroneous. An order of remit cannot be passed by the CIT to ask the AO to decide whether the order was erroneous. This is not permissible. An order is erroneous, unless the CIT holds and records reason why it is erroneous. CIT must after recording reasons, hold that order is erroneous. The jurisdictional pre-condition stipulated is that CIT must come to the conclusion that the order is erroneous and is unsustainable in law. It was further observed by the Hon’ble High Court that the material, which the CIT can rely up on includes not only the records as it stands at the time when the order in question was passed by the AO but also records as it stands at the time of the examination by the CIT. Nothing prohibits CIT from collecting and relying new/additional material which evidence to show and state that the order of the AO is erroneous. We find that Ld. PCIT in the present case has not carried out any enquiry of his own and has merely set aside the assessment to the file of the AO to pass a fresh assessment order on the issue of claim of deduction u/s 80P(2)(a)(i) - Therefore, it is contrary to the guidelines as mandated in the case of ITO v. DG Housing Projects Ltd. [2012 (3) TMI 227 - DELHI HIGH COURT] - Therefore, the consideration arrived at by the PCIT invoking provisions of section 263 of the Act on the issue recorded by him is not justified and cannot be sustained under the facts and circumstances of the present case. Appeal of the assessee is allowed.
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