TMI Blog2022 (9) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... ciety, therefore, the assessee is eligible for deduction under section 80P(2)(d). We direct the Assessing Officer to delete the disallowance and allowed deduction under section 80P(2)(d) of the Act. This ground of assessee s appeal is allowed. - ITA Nos.97 And 98/SRT/2022 - - - Dated:- 19-9-2022 - Shri Pawan Singh, Judicial Member For the Assessee : None/Written Submission For the Revenue : Shri Vinod Kumar, Sr-DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT 1. This set of two appeals by assessee are directed against separate orders of National Faceless Appeal Centre [for short to as Ld. NFAC ]/Ld. CIT(A) both dated 12.03.2022 for the assessment years 2016-17 2017-18, which in turn arise out of separate assessment order passed under section 143(3) of Income-Tax Act (Act) dated 07.12.2018 and 01.12.2019 respectively. In both the appeals the assessee has raised identical grounds of appeals. Facts in both the appeals are almost similar except figure of disallowances under section 80P(2)(d) thus, both the appeals were clubbed, heard together and are decided by common order to avoid the conflicting decisions. For appreciation of fact the fact, facts in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative Bank are primarily Co-Operative Society as per definition of Co-Operative Society under Co-Operative Society Act, 1912. The assessee also relied upon various case laws as recorded by NFAC/Ld. CIT(A) at pages 5-6 of the order. The assessee specifically relied on the decisions of division bench of Tribunal in ACIT Vs Bardoli Vibhag Gram Vikas Co-operative Credit Society Ltd. in ITA No.2582/Ahd/2014/SRT. The NFAC after discussing the various case law [which are basically on disallowance under section 80P(2)(a)(i)] uphold the order of Assessing Officer. Further aggrieved the assessee has filed present appeal before the Tribunal. 3. None appeared on behalf of assessee, despite of service of notice of hearing of appeal on the assessee, by way of registered post acknowledgment due (RPAD). However, on perusal of record, I find that assessee has filed its written submission on 12.09.2022. In the submission, the assessee submitted that assessee is a registered Co-Operative Society in as much as the name of the bank itself is Co-Operative, therefore claim of assessee is correct and the addition made by the Assessing Officer and sustained by NFAC is not proper and correct. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Bank without adjusting interest paid to said bank. The relevant part of the decision in Surat Vankar Sahkari Sangh Ltd. (supra) is extracted below: - 5. We have heard rival contentions. We have also gone through the paper book furnished by the ld. Counsel containing judicial pronouncements, written submission made before the Id. CIT(A), audit reports etc. We have noticed that the assessee has been statutorily investing its surplus fund from the year 1992 with other Co-operative Societies which include Co-operative Banks and on such investments, the appellant has been receiving interest and dividend which has been claimed as deduction u/s. 80P(2)(d) of the Act. We find that the provision of section 80P(4) are not applicable to the assessee, because section 80P(4) says that provision of this section shall not apply in relation to Co-op Bank other than Primary Agricultural Credit Societies or a Primary Co-op agricultural and Rural Development Bank. Regarding eligibility for receiving interest received from the co-operative bank we have noticed from the judicial pronouncement in the case of Surat Vankar Sahakari Sangh Ltd. v. Asstt. CIT [2016] 72 taxmann.com 169 (Gujarat) in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income Tax, under section 263, in Bardoli Vibhag Gram Vikas Co-operative Credit Society Ltd. vs. PCIT (2021) 127 taxmann.com 334 (Surat- Trib.) passed the following order; 11. We have considered the rival submission of both the parties. We have also deliberated on the written submission filed by learned AR of the assessee and various case laws relied by him during his submission. We have also gone through the various documentary evidences filed in the form of paper book (PB) by learned AR of the assessee. We have noted that during the assessment the Assessing Officer vide notice under section 143(2)/142(1) of the Act dated 31-8- 2015 and 13-4-2016. The assessee filed its reply through its CA (AR) and furnished required details and after examining the issue allowed the deductions under section 80P(2)(d) as discussed in para 4 of the assessment order. The Assessing Officer passed assessment order on 18-10-2016. 12. The ld. PCIT before passing under section 263 of the Act, identified the issue regarding the claim of deduction under section 80P(2)(d) in its show cause notice dated 6-3-2019. The assessee in its reply dated 7-3-2019 clearly explained that the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with co-operative bank. Thus, in view of the aforesaid legal discussion we are of the considered view that order passed by Assessing Officer is not erroneous, though it may be prejudicial to the interest of the Revenue. Therefore, the twin conditions that orders is erroneous and so far as prejudicial to the interest of revenue, as prescribed under section 263 is not fulfilled in the present case. 17. Moreover, we have seen that in assessee's own case for A.Y. 2009-10, 2010-11 and 2012-13, the similar disallowance under section 80P(2)(d) was made by the assessing officer while passing assessment order under section 143(3), however, on appeal before Ld. CIT(A) , the disallowances were deleted and the order of the Ld. CIT(A) in all years were confirmed. 18. The ld. DR for the revenue relied on the case law in Totagars Cooperative Sales Society (second case)/(supra), wherein the Hon'ble Karnataka High Court held that interest earned by a Co-operative Society from surplus deposits kept with Co-operative bank, is not eligible for deduction under section 80P(2)(d). Considering the legal position that when there are conflicting decisions of non-jurisdictional High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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