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2022 (1) TMI 349 - AT - Income TaxRevision u/s 263 by CIT - Admissibility of deduction under section 80P(2)(a)(i) - application of principle of doctrine of merger - HELD THAT:- When the original assessment order under section 143(3) was challenged before the first appellate authority, and first appellate authority has decided the issue and passed order in favour of the assessee, consequently, the assessment order gets merged with the appellate order. Further, even the Revenue has not preferred any appeal against the appellate order, and therefore, issue in dispute attained finality. We also find that clause (c) of Explanation 1 to Section 263(1) has clarified that when the subject matter of revision is in appeal before the CIT(A), the CIT has no power to revise the same. CIT is competent to revise an order of assessment passed by the AO in all the matters except those which have been considered and decided in appeal. CIT can exercise revisional powers only on issue which are not before the ld.CIT(A). This is because powers of the CIT(A) are co-terminus to that of the CIT. The case on hand is clearly in violation of the Explanation 1 to section 263(1), therefore, applying principle of doctrine of merger, exercise of power under section 263 in the present case is bad in law and liable to be quashed. Also on merit, the dispute is covered in favour of the assessee by the decision of Jafari Momin Vikas Co-op. Credit Society Ltd. [2014 (2) TMI 28 - GUJARAT HIGH COURT] wherein, the Hon’ble High Court examined applicability of section 80P(2)(a)(i) read with section 80P(4) of the Act and the CBDT Circular No.133 of 2007 dated 9.5.2007 clarifying scope of section 80P(2) in respect of cooperative credit society. The circular clarified that Delhi Co-op Urban Thrift and Credit Society Ltd. is not a cooperative bank, but a credit cooperative society, and section 80P(4) of the Act would not be applicable to it. Thus we quash order of the ld.Pr.CIT passed under section 263 of the Act, and thus allow the main ground of appeal of the assessee.
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