TMI Blog2023 (5) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... - Assessee appeal allowed. - ITA.No.377/PUN./2023 - - - Dated:- 25-5-2023 - Shri Satbeer Singh Godara, Judicial Member And Dr. Dipak P. Ripote, Accountant Member For the Assessee : None For the Revenue : Shri Sardar Singh Meena ORDER PER SATBEER SINGH GODARA, J.M. This assessee s appeal for assessment year 2018- 2019, arises against the PCIT, Pune-3, Pune s DIN Order No. ITBA/REV/F/REV5/2022-23/1049685954(1), dated 13.02.2023, involving proceedings u/s. 263 of the Income Tax Act, 1961 (in short the Act ). Despite notice issued, none appeared at assessee s behest. It is accordingly proceeded ex-parte. 2. It transpires during the course of hearing that the PCIT s impugned revision order has termed the corresponding sec. 143(3) regular assessment dated 18.01.2021 as an erroneous one causing prejudice to the interest of Revenue for having accepted sec.80P(2)(a)(i) deduction claim of Rs.37,93,379/-. Mr. Meena invited our attention to the PCIT s impugned revision directions at pages 5 to 8 of his order and submitted that the PCIT has set aside the assessment order on the limited issue of re-examination of the assessee s claim of deduction under sec. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess upon him that it was duly eligible for claim of deduction under Sec.80P(2)(d) of the Act, therein set aside the order of the A.O with a direction to redecide the issue afresh and reframe the assessment. 4. The assessee being aggrieved with the order of the Pr.CIT has carried the matter in appeal before us. As the present appeal involved a delay of 52 days, therefore, the ld. A.R took us through the reasons leading to the same. It was submitted by the ld. A.R that as the then counsel of the assessee society who was looking after its tax matters, viz. Shr. Ravikiran Pandurang Todkar, Chartered Accountant was taken unwell due to kidney failure and had undergone kidney transplant, therefore, due to his unavailability the appeal could not be filed within the stipulated time period. Our attention was drawn towards the affidavit of the assessee society wherein the aforesaid facts were deposed. On the basis of the aforesaid facts, it was submitted by the ld. A.R that the delay involved in filing of the present appeal in all fairness may be condoned. Per contra, the ld. D.R did not object to the seeking of condonation of the delay in filing of the appeal by the assessee society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e heard the ld. authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Our indulgence in the present appeal has been sought, for adjudicating, as to whether or not the claim of the assessee for deduction under section 80P(2)(d) in respect of interest income earned from the investments/deposits made with the co-operative banks is in order. In our considered view, the issue involved in the present appeal hinges around the adjudication of the scope and gamut of sub-section (4) of Sec. 80P as had been made available on the statute, vide the Finance Act 2006, with effect from 01.04.2007. On a perusal of the order passed by the Pr. CIT under Sec. 263 of the Act, we find, that he was of the view that pursuant to insertion of subsection (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2)(d) in respect of the interest income that was earned on the amounts which were parked as investments/deposits with the co-operative bank, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rural development bank. However, at the same time, we are unable to subscribe to his view that the aforesaid amendment would jeopardize the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its interest income on investments/deposits parked with a co-operative bank. In our considered view, as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We find that the term co-operative society had been defined under Sec. 2(19) of the Act, as under:- (19) Co-operative society means a cooperative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of co-operative societies; We are of the considered view, that though the co-operative banks pursuant to the insertion of sub-section (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a cooperative bank continues to be a co-operative society r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Vs. CIT (2016) 389 ITR 578 (Guj), had observed, that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. Backed by the aforesaid conflicting judicial pronouncements, we may herein observe, that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. Vs. Siemens India Ltd. and Anr (1985) 156 ITR 11 (Bom), where there is a conflict between the decisions of non-jurisdictional High Court s, then a view which is in favour of the assessee is to be preferred as against that taken against him. Accordingly, taking support from the aforesaid judicial pronouncement of the Hon ble High Court of jurisdiction, we respectfully follow the view taken by the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and that of the Hon ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), wherein it was observed that the interest income earned by a co-operative society on its investments held with a co-operat ..... 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