TMI Blog2022 (12) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... t order should be one that it is not debatable or plausible view. In a case where the AO examined the claim took one of the plausible views, the assessment order cannot be termed as an erroneous . In the present case, we find that admittedly the interest income was earned from the cooperative banks, the cooperative bank is also a specie of cooperative society, therefore, the interest income earned by the cooperative society from the cooperative banks qualifies for deduction u/s 80(P)(2)(d) - Such interest also qualifies for exemption u/s 80P(2)(a)(i) as held by the Co-ordinate Bench of Pune Tribunal in the case of Nashik Road Nagari Sahkari Patsanstha Limited [ 2021 (12) TMI 1259 - ITAT PUNE] Thus, we find that the issue which is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fresh adjudication on the issues already examined by the AO. The said action of Pr. CIT may please be cancelled. 4. Without prejudice to above, even on merits, the Ld. Pr. CIT erred in holding that assessee is not entitled to deduction u/s 80P(2)(a)(i) or 80P(2)(d) of Income Tax Act. This finding further directions of the Pr. CIT may please be cancelled. 5. Appellant prays that order of Pr. CIT may please be annulled and that of the AO may please be restored. 6. Appellant prays to add, alter, amend and / or withdraw the ground/s during the appellate proceedings. 3. Briefly, the facts of the case are as under : The appellant is a cooperative society formed under the Maharashtra Co-operative Societies Act, 1960. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. PCIT order dated 13.01.2022 (Pune Trib.). (ii) Tumkur Merchants Souharda Credit Cooperative Ltd. vs. ITO 230 Taxman 309 (Kar HC). (iii) Sureshdada Jain Nagari Sahakari Patsanstha Maryadit (ITA No.713/PUN/2016). (iv) Nasik Road Nagri Sahakari Patsanstha (ITA No.1700/PUN/2017 order dated 27.12.2021). (v) ITO vs. Shri Laxmi Narayan Nagari Sahakari Pathsanstha (ITA No.2827/PUN/2016 order dated 19.09.2018). (vi) Sant Motiram Maharaj Patsanstha Ltd. vs. ITO, 120 taxmann.com 10. 5. It is further submitted that the Assessing Officer had allowed the claim of exemption after due application of mind on the issue in appeal and, therefore, the Explanation 2 to section 263 cannot be invoked. However, the ld. PCIT on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as prejudicial to the interests of the revenue. 9. On the other hand, ld. CIT-DR placing reliance on the order of the ld. PCIT submits that failure of the Assessing Officer to examine the gratuity of income earned on the investments from cooperative bank rendered assessment order erroneous and prejudicial to the interests of the revenue. Therefore, he submits that the ld. PCIT was justified in exercising the power of revision u/s 263 of the Act. 10. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the validity of assumption of jurisdiction u/s 263 by the ld. PCIT. The Parliament had conferred the power of revision on the Commissioner of Income Tax u/s 263 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the purpose of lending to the members is deposited with Bank of Baroda in the form of Fixed Deposit. The question is whether the interest so earned qualifies for exemption u/s. 80P(2)(a)(i) of the Act. The AO as well as the CIT(A) were of the opinion that the interest earned from third parties or non-members does not quality for exemption u/s.80P. It is an admitted position that the interest so earned should be taxed as income from other sources There is a cleavage of judicial opinion among several High Courts on the issue of eligibility of this kind of income for exemption u/s. 80P(2)(a)(i) of the Act. The Hon ble Punjab Haryana High Court in the case of CIT vs. Punjab State Cooperative Federation of Housing Building Societies Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espectfully following the decision of the Coordinate Bench, we hold that the interest income earned on the investment of surplus money with banks is also eligible for exemption u/s.80P(2)(a)(i) of the Act. Thus, the grounds of appeal No. 1 2 stands allowed. 11. Thus, we find that the issue which is subject matter of revision is covered in favour of the assessee by judicial precedents. Therefore, it cannot be said that the assessment order is erroneous or prejudicial to the interests of the revenue. Therefore, we are of the considered opinion that the order of revision passed by the ld. PCIT u/s 263 of the Act cannot be sustained in the eyes of law. Hence, the grounds of appeal raised by the assessee stand allowed. 12. In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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