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TMI Blog2019 (12) TMI 1611X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO was neither erroneous nor prejudicial to the interests of the Revenue and hence, could not be revised u/s. 263. 3) The learned PCIT failed to appreciate that the order of the AO was in line in certain decisions wherein it was held that deduction u/s. 80P(2)(d) was allowable and as two views were possible on the said issue and the AO having adopted one of the views, the order of the AO could not be considered to be erroneous. 4) The Appellant prays that the order u/s. 263 may be held to be bad in law and the direction of the PC IT to reassess the income of the appellant by excluding the deduction claimed by the appellant u/s. 80P(2)( d) of Rs. 12,87,629/- may be deleted. 2. Facts in brief as gathered from the orders of lower authorities are that assessee is a Co-operative Society, filed its return of income for Assessment Year 2014-15 on 27.09.2014 declaring Nil income. The case was selected for scrutiny and after serving statutory notice under section 143(2) and 142(1) of the Act. The assessment was completed under section 143(3) of the Act accepting the return of income without any variance. Subsequently, the assessment was revised by ld. PCIT vide its order dated 05.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erative society' is to be read as a 'Co-operative Bank', it would render the entire provision redundant and nugatory. The deduction under section 80P(2)(d) is allowable to the Co-operative Society in respect of any income by way of interest or dividend derived by a Co-operative Society from its investment with any other Cooperative Society. Thus, deduction is allowable on interest income, which is derived from investment with a Co-operative Society and not a Co-operative Bank. The ld. PCIT after discussing the various case law on the ratio that as and when the Assessing Officer failed to apply his mind on the factual aspect available on record, the assessment order passed by him is erroneous. The assessment order was treated as erroneous and prejudicial to the interest of revenue. The assessment was set-aside on the issue of allowability of deduction of interest of Rs. 12,87,629/- under section 80P. The Assessing Officer was directed to pass the assessment order afresh after following the due process and grant opportunity to the assessee. Aggrieved by the order of ld. PCIT, the assessee has filed the present appeal before this Tribunal. 5. We have heard the submission of ld. Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue supported the order of ld. PCIT. The ld. DR for the revenue invited our attention on the contents of assessment order and would submit that there is no reference or consideration about the issue raised by ld. PCIT, about show-cause notice on the issue of allowability of claim under section 80P. Further, the assessment order is silent about the allowance of deduction under section 80P. The reliance of ld. AR of the assessee on the alleged explanation furnished in the query raised by Assessing Officer. The ld DR for the revenue submits that perusal of copy of the alleged which is available at page no. 14 & 15 of the Paper Book, there is no acknowledgement of Assessing Officer or proof of filing the same before the Assessing Officer. This reply does not bear the date or signature of Assessing Officer on its acknowledgement. The ld. DR further submits that the assessment order is passed without examining the issue. The ld. PCIT in its order has clearly spelt out by referring the decision of Gee Vee Enterprises vs. Addl. CIT (99 ITR 375) that Assessing Officer is not only adjudicator but also an investigator, cannot remain passive in the face of a return which is apparently in or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 (Bom. HC.) CIT vs. Jafari Momin Vikash Co-op. Credit Society Ltd. [2014] 362 ITR 331 (Guj. HC. ACIT vs. Metrocity Criminal Courts employees Mutually Aided coop. Credit Society Ltd. [2015] 39 ITR (Trib.) Hyderabad. ACIT vs. People's Co-operative Credit Society Ltd. [2019] 180 DTR (Ahd) (SB) (Trib.) 444. 10. We have considered the submission of the learned representative of the parties and have gone through the orders of authorities below. In the return of income, the assessee claimed interest income under the head Income from Other Sources of Rs. 12,87,629/- and after setting up of loss of Rs. 2,87,471/-, the assessee claimed deduction under Chapter- VA of Rs. 10,00,158/-. The income under the head 'Income from other Sources' the assessee claimed it as deductable under section 80P as interest income from Cooperative Societies. The Assessing Officer while passing the assessment order accepted the return of income. Admittedly, no discussion on the disallowance under Chapter-VA, including the deduction under section 80P in the assessment order. The ld. PCIT issued show-cause notice under section 263 for proposed revision of assessment order vide notice dated 05.02.2019. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80P(2)(d). 13. Considering the aforesaid legal preposition, we are of the view that assessee is entitled for deduction on interest earned from Co-operative Bank which are primarily a Co-operative Society, thus, in our view, the deduction allowed by Assessing Officer are in accordance with various judicial pronouncement, which cannot be branded as erroneous. The jurisdictional High court in Gabriel India Ltd. (supra) held that power of suo-moto revision under section 263 of the Act, is in the nature of supervisory jurisdiction and can be exercised, if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise the power of revision under this sub-section viz. (i) The order should be erroneous; and (ii) by virtue of the order being erroneous and prejudicial must have been caused to the interest of revenue. Further, the order cannot be termed as erroneous unless it is not in accordance with law, if the Assessing Officer acting in accordance with law make certain assessment, the same cannot be branded as erroneous by Commissioner simply because, according to him, he order should have been written more elaborately. 14. As we have note ..... X X X X Extracts X X X X X X X X Extracts X X X X
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