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TMI Blog2019 (7) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... o the validity of order passed by Pr.CIT u/s 263 of the Income Tax Act, 1961 (in short 'Act'). In the instant case, the assessee filed the return of income declaring Nil income on 19.02.2014 and claimed the deduction u/s 80P for a sum of Rs. 10,58,078/-. The case was selected for scrutiny and the assessment was completed u/s 143(3) on total income of Rs.Nil vide order dated 25.01.2016. Subsequently, the Pr.CIT found from the 26AS statement that the assessee had received a sum of Rs. 14 lakhs as interest on deposits made in Varahalakshmi Narasimha Swami Educational Trust (in short 'Trust') which is not a cooperative society. As per the provisions of section 80P(2)(a)(i) of the Act, in case the cooperative society is engaged in carrying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an agreement and loan ledger etc. were furnished before the Ld.Pr.CIT. However, the Ld.Pr.CIT viewed, even after establishing all the evidences that the issue require to be examined since he was under the impression that the AO has allowed exemption without calling for any documentary evidence in support of the assessee's claim that the Trust is a member of the society. Ld.AR argued that since, the Trust is a member of the society and the amount given to the Trust is a loan and the bye laws of the society permits the Trust to become a member, there is no under assessment which caused prejudice to the revenue. The Ld.AR further submitted that during the assessment proceedings, the assessee has produced the books of accounts which were exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rust became member of the society and the society is permitted to give loan to its members. The society had advanced the amounts to the Trust and collected the interest. Since the interest received was from the member of the society, the interest collected by the society is entitled for deduction u/s 80P of the Act. As seen from the assessment order, the assessment was completed u/s 143(3) and during the assessment proceedings, the AO called for the books of accounts, and the other details, in response to which the Ld.AR furnished the details. After examining the books of accounts and the other details, vouchers for expenses, the assessment was completed by the AO allowing deduction u/s 80P. Therefore, it is incorrect to say that the AO a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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