TMI Blog2021 (12) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in the present case no case has been made out by the Revenue or learned PCIT that the Cooperative bank referred in the impugned issues are licensed by RBI the provision of section 80P(4) cannot be imported. Hence, from the above it is evident that issue on merits is in favour of the assessee. When the issue on merits is in favour of the assessee, there is no point of PCIT exercising jurisdiction under section 263 of the Act on that issue. Hence the order of learned PCIT is not sustainable. Hence, we set aside the same and decide the issue in favour of the assessee. - I.T.A. No. 515/Mum/2021 - - - Dated:- 15-11-2021 - Shri Shamim Yahya (AM) And Shri Shaktijit Dey (JM) Assessee by : Shri Pulindra Department by : Smt. Leena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operative Society. The appellant has also submitted the evidence of registration of the cooperative bank with Registrar. 3. The Assessing officer has raised the question for deduction under section 80(P)(2)(d) of The Income Tax Act, 1961 with respect to interest received by the appellant from Co-operative Bank and after due submission made at the time of assessment and after applying mind the same has been allowed and the assessment order was passed. Therefore the order passed under section 263 of The Commissioner of Income Tax. 4. The Commissioner of Income Tax has not considered the fact that the appellant is a registered housing society and the bank where the deposits are kept is a Co-operative bank which is also registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank is a commercial bank and does not fall under the purview of co-operative society and thus interest income is not eligible for deduction under Section 80P(2)(d) of the Act and thus held that the department allowed excess deduction u/s. 80P of the Act to the tune of ₹ 10,69,788/-. The above mentioned fact was overlooked during the assessment proceedings and the order u/s. 143(3) of the Act for AY 2016-17 was passed on 25.10.2018. Thus, considering the order passed by the Assessing Officer, the assessment order is not only erroneous but also prejudicial to the interest of the Revenue. A notice u/s. 263(1) of the Act dated 09.03.2020 was issued to the assessee to provide it an opportunity to be heard. 4. Thereafter learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed above. Thus, the assessment is found to be erroneous insofar as it is prejudicial to the interest of Revenue as envisaged in Section 263 of the Act. There is lack of enquiry by the Assessing Officer on the issue raised in the notice issued u/s. 263 of the Act. The Assessing Officer may have disallowed the deduction claimed u/s. 80P(2)(d) of the Act amounting to ₹ 10,69,788/-, which has resulted in under assessment of income, Therefore, the assessment order dated 25.10.2018 passed u/s. 143(3) is set aside for passing the order afresh on the issues raised in the notice issued u/s. 263(1) of the Act, after giving the assessee an opportunity of being heard and producing any evidence in this regard. 5. Against this order t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 949 (10 of 1949); (b) primary co-operative agricultural and rural development bank means a society having its area of operation confined to a taluk and the principal object of which is to provide for long-term credit for agricultural and rural development activities. 7. Honourable Supreme Court in the case of Citizen Cooperative Society Ltd. (Civil Appeal No. 10245 of 2017 vide order dated 8.8.2017) has settled the law that for being considered as a cooperative bank licence from RBI in this regard is a sine qua non. In absence of the RBI licence as such the assessee cannot be treated as cooperative bank. Hence disallowing the deduction by referring to the provisions of section 80P(4) is completely unsustainable. Moreover secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f it fell within any one head of deduction, it would be free from tax notwithstanding that the conditions of another head of deduction are not satisfied; (IV) This is for the reason that when the legislature wanted to restrict the deduction to a particular type of co-operative society, such as is evident from section 80P(2)(b) qua milk co-operative societies, the legislature expressly says so - which is not the case with section 80P(2)(a)(i); (V) That section 80P(4) is in the nature of a proviso to the main provision contained in section 80P(1) and (2). This proviso specifically excludes only co-operative banks, which are cooperative societies who must possess a licence from the RBI to do banking business. Given the fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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