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TMI Blog2023 (4) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... credit facilities to its members. It is registered under Maharashtra Co-operative Societies Act, 1960. The Return of Income for the assessment year 2018-19 was filed on 07.08.2018 declaring total income of Rs.62,710/- after claiming deduction u/s 80P of the Income Tax Act, 1961 ('the Act') of Rs.3,03,94,739/-. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 19.02.2021 passed u/s 143(3) of the Income Tax Act, 1961 ('the Act') accepting the returned income allowing the deduction u/s 80P as claimed by the appellant. 3. Subsequently, on review of the assessment record, the ld. PCIT had observed that during the previous year relevant to the assessment year under consideration, the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction u/s 80P(2)(a)(i) or section 80P(2)(d) of the Act. 5. However, on due consideration of the submission made by the appellant, the ld. PCIT was of the opinion that since the interest income earned by the co-operative banks are not exempt u/s 80P of the Act and the co-operative banks does not fall under the category of co-operative society referred to section 80P of the Act. Accordingly, ld. PCIT set-aside the assessment order to the file of the Assessing Officer for proper verification and examination of the claim u/s 80P after giving reasonable opportunity of bearing heard to the assessee. 6. Being aggrieved by the above order of revision passed by the ld. PCIT u/s 263, the appellant is in appeal before us in the present appeal. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abar Industrial Co. Ltd. vs. CIT, 243 ITR 83 (SC) and in the case of CIT vs. Max India Ltd., 295 ITR 282 (SC). The error in the assessment order should be one that it is not debatable or plausible view. In a case where the Assessing Officer examined the claim took one of the plausible views, the assessment order cannot be termed as an "erroneous". 10. Now, we proceed to examine the facts of the present case whether the issue of eligibility of interest income earned on investments made with other co-operative banks qualifies for exemption u/s 80P(2)(a)(i) or section 80P(2)(d) of the Act. The Coordinate Bench of this Tribunal in the case of Nashik Road Nagari Sahkari Patsanstha Limited vs. ITO in ITA No.1700/PUN/2017 for A.Y. 2013-14 dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Bank Ltd. 389 ITR 68 and the Hon'ble Kolkata High Court in the case of CIT Vs. Southern Eastern Employees Cooperative Credit Society Ltd. 390 ITR 524 took a view that the income arising on the surplus invested in short term deposits and securities cannot be attributed to the activities of the society and, therefore, not eligible for exemption u/s.80P(2)(a)(i) of the Act. However, the Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 taxmann 309 (Kar.) and the Hon'ble Telangana and Hon'ble Andhra Pradesh High Court in the case of Vaveru Co-operative Rural Bank Ltd. v CIT [(2017) 396 ITR took a view that such interest income is attributable to the activities of the society and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -operative banks or even commercial bank qualifies for deduction u/s 80P(2)(a)(i) of the Act. Furthermore, the co-operative banks are also another specie of a co-operative society and, therefore, interest income earned on investments and deposits made with other co-operative banks qualifies for deduction u/s 80P(2)(d) of the Act. The fact that income earned by the co-operative banks are not exempt from tax cannot act as bar to treat a co-operative bank as a cooperative society. 13. Therefore, the position that emerges from the above discussion is that the interest income earned by the co-operative society from investments made out of the surplus fund with other co-operative banks qualifies for deduction u/s 80P(2)(a)(i) or section 80P(2)(d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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