TMI Blog2022 (8) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... KUMAR, JUDICIAL MEMBER:- The present appeal has been filed by the Assessee against the order dated 11.03.2019 passed by the Ld. Principal Commissioner of Income Tax, Gandhinagar under section 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relating to the Assessment Year (A.Y) 2014-15. 2. The assessee before us is a Co-operative credit society, provide credit facility to its members by giving loan advances and accepting deposits from members of the society. For the Assessment Year, 2014-15, the assessee field its Return of Income was e-filed on 26/11/2014 declaring total income at Rs. NIL after claiming deduction of Rs. 1,04,56,923/- u/s 80P of the Act. The return was processed u/s 143(1) and then scrutiny assessment was completed by making addition on account of interest receipt of Rs. 15,595/- and addition of interest on refund received u/s 244A of the Act of Rs. 21,980/-. Thus assessed the total income as Rs. 37,575/-. 2.1. It is thereafter a show cause notice u/s 263 dated 22/01/2019 was issued on the ground that the Assessing Officer has allowed interest amounting to Rs. 31,64,097/- earned from Nationalized Bank. However interest from Co-Op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts are not applicable. However Hon ble Karnataka High Court judgment is directly on the issue in favour of the Revenue, which is higher judicial authority as compared to ITAT and hence the judgment of Hon ble High Court of Karnataka is binding as per the judicial discipline and therefore directed the Assessing Officer to reframe the assessment de-novo in accordance with the provisions of the Act and after considering the position of law as explained above in the judgment of the Karnataka High Court in the case of Totgars Co-Operative Sale Society after granting proper opportunities of being heard to the assessee. 3. Aggrieved against the same, the assessee is before us raising the following Grounds of Appeal: 1. The learned Pr. C.I.T. has erred in holding that the assesse is not eligible for deduction of interest income of Rs.30,60,500/- u/s 80P(2)(d) of the Act received from investment made with Co.Op. Bank. The Ld. Pr. CIT has not considered the explanations/submissions furnished by your appellant during the course of assessment proceedings as well as proceedings before him in true perspective. It is submitted that the view so taken of holding the assessment order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame ratio rendered by the Co-ordinate Bench of this Tribunal, the present Revision order is directed to be quashed and prayed to allow the appeal filed by the assessee. 4. Per contra, the Ld. D.R. appearing for the Revenue could not produce any contra judgment in support of his argument, but however relied upon the order of the PCIT and requested to uphold the same. 5. We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the assessee. As rightly argued by the Ld. Representative of the assessee, this issue is being dealt by the Co-ordinate Bench of the Tribunal in its decision in the case of The Sardar Patel Co-operative Credit Society Ltd (cited supra), wherein its held as follows: 4. We have heard the arguments of both the sides and also perused the relevant material available on record. As submitted by the learned Counsel for the assessee, the assessment completed by the Assessing Officer under Section 143(3) of the Act allowing the similar claim of the assessee for deduction under Section 80P(2) of the Act in respect of interest income earned on the deposits with Mehsana Urban Co-operative Bank was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of Rs.27,97,019/- in respect of assessee's interest income derived from its deposits with the Banas Co-operative Bank. Both the lower authorities quote the legislative amendment vide Finance Act, 2006 w.e.f. 01.04.2007 inserting subsection 4 in Section 80P as well as CBDT's explanatory notes to the above Finance Act dated 28.122006 in holding that the impugned interest income derived from co-operative bank is not eligible for deduction. Learned Departmental Representative vehemently contends that hon'ble Karnataka high court's recent decision in (2017) 83 taxmann.com 140 (Karnataka) PCIT vs. Totagars Co-operative Sale Society has settled the law that such an income is not allowable as Section 80P deduction in view of the legislative amendment hereinabove. Mr. Kabra thereafter files hon'ble apex court's judgment in (2017) 397 ITR 1 (SC). The Citizen Co-operative Society Ltd. vs. ACIT settling Section 80P deduction issue in respect of ordinary and nominal members. We however find that the above former decision goes contrary to hon'ble jurisdictional high court's judgment in Tax Appeal No. 473 of 2014 CIT vs. Sabarkantha District Cooperative Mil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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