TMI Blog2022 (5) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of interest received by the Appellant from a cooperative bank would still qualify as a plausible view and thereby taking away the jurisdiction of PCIT to invoke powers of revision under Section 263 of the Act. It is settled legal position that in case the view taken by the AO is a plausible view, PCIT cannot be permitted to substitute his opinion in place of the AO to arrive to a contrary finding. Thus, we hold that in the facts and circumstances of the present case the PCIT lacked the jurisdiction to exercise powers under Section 263 - Decided in favour of assessee. - I.T.A. No. 1011/Mum/2021 - - - Dated:- 29-3-2022 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER Assessee by: Shri Rajiv Khandelwal (AR) Revenue by: Shri A.K. Kardam (CIT DR) ORDER Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Appellant/Assessee has challenged the order dated 26.03.2021 passed by the Ld. Principal Commissioner of Income Tax Thane-1 (hereafter referred to as the PCIT‟] under Section 263 of the Income Tax Act, 1961 (hereafter referred to as the Act‟) whereby the Ld. PCIT had set aside asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued notice under Section 263 requiring the Appellant to submit the response on or before 22.03.2021 through e-mail / e-filing portal, and on 26.03.2021 the PCIT passed order under Section 263 of the Act which has been impugned in the present appeal. 7. The Appellant has challenging the order passed by PCIT on the grounds of violation of principles of natural justice and also on the ground of lack of jurisdiction of PCIT to pass the order under Section 263 of the Act, firstly, on account the assessment order neither being erroneous nor prejudicial to interest of Revenue and, secondly, for the reason that the appellant having had opted for Direct Tax Vivad Se Vishwas Scheme for the relevant assessment year. 8. The Learned Authorised Representative of the Appellant (hereinafter referred to as the Ld. AR‟) submitted that order under Section 263 of the Act was passed without granting sufficient opportunity to the Appellant to put forward the facts and therefore, there was violation of principles of natural justice. On merits he submitted that the AO had raised the issue of allowability of deduction under Section 80P of the Act in the assessment proceedings. After going ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 80P(2) (d) of the Act considering the above discussed facts and to redo the assessment after affording adequate opportunity to the assessee. 10. We have perused the records and considered the rival submissions. A perusal of the assessment order would show that the AO had specifically raised query regarding allowability of deduction under Section 80P of the Act. Relevant extract of the assessment order reads as under: 3.1 During the course of assessment proceedings, the details and break up of all the receipts have been called for and on perusal of same, it is observed that the society has earned interest of Rs. 53,78,345/- on deposits made with the various cooperative banks, Bank of India Dena Bank. The provision of section 80P applicable to the year under consideration is being reproduced as under:- 80P(1) Where, in the case of an assessee being a cooperative society, .. XX XX Considering the activities of the assessee society, the interest income earned on deposits made with the various banks cannot be treated as income attributable to the business of society. During the course of assessment proceedings, the AR of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 80P(2)(d) of the Act in respect of the interest received from a cooperative bank. The relevant portion of the decision is reproduced below: 7. We have deliberated at length on the issue under consideration and are unable to persuade ourselves to be in agreement with the view taken by the lower authorities. Before proceeding further we may herein reproduce the relevant extract of the said statutory provision, viz Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. 80P(2)(d) (1) Where in the case of an assessee being a cooperative society, the gross total income includes any income referred to in subsection (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following namely:- (a) . (b) . (c) . (d) in respect of any income by way of interest or dividends derived by the cooperative society from its investments with any other co-operative society, the whole of such income Thus, fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociety from its investments held with a co-operative bank, would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. 8. We shall now advert to the judicial pronouncements that had been relied upon by the authorized representatives for both the parties and the lower authorities. We find that the issue that a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) for the interest income derived from its investments held with a cooperative bank is covered in favour of the assessee in the following cases: (i) Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH 32 (Mum) (ii) M/s C. Green Cooperative Housing and Society Ltd. Vs. ITO21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31.03.2017 (iii) Marvwanjee Cama Park Cooperative Housing Society Ltd. Vs. ITORange-20(2)(2), Mumbai (ITA No. 6139/Mum/2014, dated 27.09.2017. We further find that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon‟ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment of the Hon'ble High Court of Karnataka in the case of Pr. CIT Vs. Totagars cooperative Sale Society (2017) 395 ITR 611 (Karn), the High Court had concluded that a co-operative society would not be entitled to claim of deduction under Section 80P(2)(d). We however find that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. Vs. Siemens India Ltd. and Anr (1985) 156 ITR 11 (Bom), where there is a conflict between the decisions of non-jurisdictional High Court‟s, then a view which is in favour of the assessee is to be preferred as against that taken against him. Thus, taking support from the aforesaid judicial pronouncement of the Hon‟ble High Court of jurisdiction, we respectfully follow the view taken by the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon‟ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), wherein it was observed that the interest income earned by a co-operative society on its investments held with a co operative bank would be eligible for c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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