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2020 (10) TMI 878 - AT - Income TaxRevision u/s 263 - Deduction u/s. 80P(2)(a)(i) - HELD THAT:- Though there is justification for invoking powers u/s. 263 of the Act to make verification as to whether the principle of mutuality is satisfied in the case of assessee in Citizen Co-operative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT] the other directions contained in our view, is uncalled for. When the assessment is set aside for examination of the claim of assessee u/s. 80P(2)(a)(i) of the Act in the light of the decision of Hon’ble Supreme Court in Citizen Co-operative Society Ltd. (supra), the exercise to be done would be restricted to verification of nature of membership of the society as per the bye laws and as to whether the income derived by the assessee on which deduction u/s. 80P(2)(a)(i) has been claimed, is attributable to the business of providing credit facilities to its members. Assessment vis-à-vis section 80P(2)(a)(i) would be a de novo assessment and the AO would be free to adopt his line of enquiry while deciding the issue in the set aside proceedings, limited to the ratio laid down by the Hon’ble Supreme Court in Citizen Co-operative Society Ltd. (supra) uninfluenced by the directions of the Pr.CIT as contained in the impugned order in paragraph 3.3. Accordingly, we modify the directions of the Pr. CIT in the impugned order as indicated above. Appeal of the assessee is partly allowed.
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