TMI Blog2019 (1) TMI 1708X X X X Extracts X X X X X X X X Extracts X X X X ..... sment under Sec. 143(3), dated 23.12.2017, had arrived at a plausible as regards the assesses entitlement under Sec. 80P(2)(d) on the interest income earned on its investments held with the co-operative banks, which view we find at the point of framing of the assessment was in conformity with that arrived at by the jurisdictional Tribunal in a host of judicial pronouncements, therefore, the said fact in itself would suffice to divest the Pr.CIT of his revisional jurisdiction under Sec. 263 in respect of the aforesaid issue. A.O had erroneously worked out the tax liability of the assessee under the normal provisions as against the alternate minimum tax (ALT) - As specifically provided in clause (i) of sub-section (2) to Sec. 115JC, the total income of the assessee is not to be increased by the deduction claimed under Sec. 80P. On a perusal of the calculation of the adjusted total income as per ITNS, we find, that the A.O had worked out the same by increasing the total income of the assessee by the amount of deduction that was claimed by the assessee under Sec.80P of the Act. As such, on the basis of his aforesaid working, the A.O had erroneously calculated the adjusted tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quashed. 1. The Learned Commissioner of Income-tax failed to appreciate that, the order passed by the Assessing Officer u/s. 143(3) is neither erroneous nor prejudicial to the interest of the revenue, hence the order passed u/s. 263 by the Commissioner of Income Tax is bad in law and liable to be quashed 2. Without prejudice to the above, during the assessment proceeding, the Assessing officer vide notice u/s. 142(1) dt. 30/10/2017 called details for deduction claimed under chapter VI-A and in regards to the same, the assessee vide letter dt. 15/11/2017 submitted detailed breakup of deduction claimed u/s 80P along with copies of interest certificates and the order passed by the Assessing officer u/s 143(3) was after considering the details and applying his mind, and hence the order of Assessing officer cannot be said to be erroneous or prejudicial to the interest of revenue and hence the order passed u/s 263 may be quashed. II. Disallowance of deduction claimed u/s. 80(P)(2)(d) of ₹ 56,16,242/- 3. Without prejudice to the above, the learned Commissioner of Income-tax erred in directing the Assessing officer to disallow the claim of deduction u/s. 80P(2)(D) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - as against the alternate minimum tax (ALT) of ₹ 23,80,257/-. On the basis of his aforesaid observations the Pr.CIT called upon the assessee to explain as to why the assessment framed in its case may not be revised under Sec. 263 of the Act. In reply, the assessee assailed the validity of the jurisdiction assumed by the Pr. CIT under Sec. 263 of the Act. It was claimed by the assessee that as the A.O after necessary deliberations had framed the assessment, therefore, the exercise of the revisional jurisdiction under Sec. 263 by the Pr. CIT was clearly ousted. Also, the assessee tried to impress upon the Pr.CIT that no error did emerge from the assessment framed by the A.O vide his order passed under Sec. 143(3), dated 23.12.2017. It was averred by the assessee that its claim for deduction under Sec. 80P(2)(d) in respect of the interest income on its investments with co-operative banks was well in order. Apart from that, the assessee submitted before the revisional authority that the calculation of the AMT by the A.O suffered from a clerical mistake and the calculation of its tax liability under the normal provisions was rightly done by the A.O. However, the submissions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .O, vide his order under Sec. 143(3), dated 23.12.2017. As such, it was submitted by the Ld. A.R that now when the A.O while allowing the assesses claim deduction under Sec. 80P(2)(d) had taken a plausible view, which was in conformity with the aforesaid orders of the jurisdictional Tribunal, therefore, the Pr.CIT was clearly divested of his jurisdiction to hold the aforesaid view arrived at by the A.O as erroneous. As regards the observation of the Pr.CIT that the A.O had erred in not computing the tax liability of the assessee as per the AMT, it was submitted by the Ld. A.R that the aforesaid observation of the revisional authority was in itself based on incorrect working of the A.O in the ITNS. On the basis of his aforesaid contentions, it was averred by the Ld. A.R that as the Pr.CIT had erroneously assumed jurisdiction under Sec. 263 of the Act, therefore, the order passed by him was liable to be set aside. 5. Per contra, the Learned Departmental Representative (for short D.R) relied on the order passed by the Pr. CIT under Sec. 263 of the Act. It was submitted by the Ld. D.R that as the assessment framed by the A.O was found to be erroneous insofar it was prejudicial to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Interest 56,16,242/- The controversy involved in the present case revolves around the aspect that as to whether the interest income earned by a co-operative society from its investments with the co-operative banks is eligible for deduction under Sec. 80P(2)(d) of the Act, or not. In our considered view, the answer to the aforesaid issue hinges around the adjudication of the scope and gamut of subsection (4) of Sec. 80P as had been made available on the statute by the legislature, vide the Finance Act 2006, with effect from 01.04.2007. We find that the Pr.CIT held a conviction that pursuant to insertion of sub-section (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2)(d) on its interest income earned on the amounts parked as investments with cooperative banks, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. As per the Pr. CIT, as the co-operative banks with which the surplus funds of the assessee were parked as investments were neither Primary Agricultural Credit Society nor a Primary Co-ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of a co-operative society under Sec. 80P(2)(d) in respect of the interest income earned on its investments parked with a co-operative bank. We have given a thoughtful consideration to the issue before us and are of the considered view that as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We may herein observe that the term co-operative society had been defined under Sec. 2(19) of the Act, as under:- (19) Co-operative society means a cooperative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of co-operative societies; 9. We are of the considered view that though the co-operative bank pursuant to the insertion of sub-section (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, however, as a co-operative bank continues to be a co-operative society registered under the Cooperative Societies Act, 1912 (2 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. Be that as it may, in our considered view as the A.O while framing the assessment under Sec. 143(3), dated 23.12.2017, had arrived at a plausible as regards the assesses entitlement under Sec. 80P(2)(d) on the interest income earned on its investments held with the co-operative banks, which view we find at the point of framing of the assessment was in conformity with that arrived at by the jurisdictional Tribunal in a host of judicial pronouncements, therefore, the said fact in itself would suffice to divest the Pr.CIT of his revisional jurisdiction under Sec. 263 in respect of the aforesaid issue. 10. We shall now advert to the observations of the Pr.CIT that although as per ITNS the AMT in the case of the assessee worked out at ₹ 23,80,257/- [₹ 1,13,55.916/- (adjusted total income) x 18.5% (rate of tax under Sec. 115JC)], however, the A.O had wrongly calculated the tax liability of the assessee on its normal income at ₹ 19,47,515/- (including surcharge e.cess) [₹ 57,39, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction under Sec. 35AD was allowed in respect of the assets on which the deduction under that section is claimed. Accordingly, for the purpose of computing the adjusted total income under Sec. 115JC, the total income of the assessee has to be inter alia raised by the deduction envisaged in Chapter-VIA. However, as specifically provided in clause (i) of sub-section (2) to Sec. 115JC, the total income of the assessee is not to be increased by the deduction claimed under Sec. 80P. On a perusal of the calculation of the adjusted total income as per ITNS, we find, that the A.O had worked out the same by increasing the total income of the assessee by the amount of deduction of ₹ 56,16,242/- that was claimed by the assessee under Sec.80P of the Act. As such, on the basis of his aforesaid working, the A.O had erroneously calculated the adjusted total income at ₹ 1,13,55,916/- as against the correct amount of ₹ 57,39,674/-. In the backdrop of the aforesaid facts, we find substantial force in the claim of the Ld. A.R that the observation of the Pr.CIT that the tax liability of the assessee as per AMT was higher than that worked out on its normal income , is bas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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