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2021 (7) TMI 453 - AT - Income TaxDeduction u/s 80P(2) - income earned by the assessee from investment in SBI mutual fund - HELD THAT:- AO in the assessment order itself, the assessee-society was carrying on business of banking and providing credit facilities to its members and also taking deposits from its farmer members. Therefore, accepting deposits on interest is one of the activities of the assessee-society. In the business of banking or credit facilities, not only accepting deposits but also investment of the deposits is also the part of the business activity of such an entity. To invest the deposits accepted from the members or the surplus funds available with it, is part of the banking/credit business of the assessee-society. Therefore, the investment of the surplus amount in the mutual funds by the assessee-society cannot be said to be not related to the business activity of the assessee-society. Therefore, the interest/dividend income earned by the assessee for such investment, in my view, will be eligible for deduction u/s 80P(2) - AO is directed to allow the deduction on the income earned by the assessee from investment in SBI mutual fund. Not allowing TDS - assessee has submitted that he mistakenly registered itself as ‘local authority’ with the Income Tax department (PAN) and not as ‘association of persons’, therefore, the TDS amount claimed in the return of income has been denied to the assessee - HELD THAT:- We are not convinced with the above observation of the CIT(A). If the assessee by mistake has wrongly registered itself under a wrong category that does not mean that the said mistake is not curable or that the assessee is to be punished for its bona fide mistakes. Therefore we restore this issue to the file of the Assessing Officer with a direction that an opportunity may be given to the assessee to cure the defects, if any, in its registration and thereafter, to allow to the assessee the eligible claims/TDS refund etc. if otherwise so admissible to the assessee under the provisions of the Income Tax Act.
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