TMI Blog2023 (7) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... 92/Mum/2023 - - - Dated:- 25-7-2023 - Shri Pavan Kumar Gadale (Judicial Member) And Ms. Padmavathy S. (Accountant Member) For the Assessee : Shri Subodh Ratnaparkhi For the Department : Shri.Dr. Kishor Dhule CIT DR ORDER PER : MS PADMAVATHY S. (AM) This appeal is against the order of the Principal Commissioner of Income-tax, Thane-1 (in short, the PCIT ) dated 30/03/2023 passed under section 263 of the Income-tax Act (in short, the Act ) for A.Y. 2018-19. The assessee raised the following grounds of appeal:- 1. The Id Pr. CIT erred in passing ex-parte order u/s 263 of the I.T Act, 1961, alleging failure on the part of the assessee to respond to show cause notice dt 18.03.2023, when in reality the assessee had responded to the said show cause notice u/s 263 on the given date and for this reason the order u/s 263 dt 30.03.2023 is bad in law and void-ab-inito as it breaches the salient principles of equity, fair play and natural justice. The appellant prays that the order u/s 263 be quashed and set aside for this reason. 2. The Id Pr. CIT erred in holding the order framed by the assessing officer u/s 143(3) of the I. Tax Act on 09.03.2021 to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. The assessee made a detailed submission before the PCIT justifying the claim of deduction. The PCIT, after considering the submissions of the assessee, held that net income of Rs. 79,90,593 arising from investments made with co-operative banks and not from any other co-operative society are not eligible for deduction under section 80P(2)(d) of the Act 4. The PCIT, in this regard relied on the decision of the Hon ble Supreme Court in the case of Totgar Co-operative Sales Society vs ITO 322 ITR 2831 (SC/2010). Accordingly, the PCIT held the assessment passed under section 143(3) by the Assessing Officer to be erroneous and prejudicial to the interest of the revenue and set aside the said order with a direction to examine the applicability of provisions of section 80P(2)(d) and redo the assessment. Aggrieved, the assessee is in appeal before the Tribunal. 4. The Ld.AR of the assessee submitted that the issue under consideration is covered by the orders of the Tribunal in assessee s own case for A.Ys. 2,007-08, 2008-09 2009-10 and also for 2017-18 in ITA Nos 5185/Mum/2012 1186/Mum/2012 order dated 01/01/2016, ITA No.1935/Mum/2014 order dated 10/09/2015 ITA No.283 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative banks are not eligible for deduction under the provisions of section 80P(2)(d). The Ld. PCIT placed his reliance on the decision of Totagars Co-operative Sale Society's case (supra) wherein the Hon'ble High Court held that the amendment to section 194A(3)(v) of the Act excludes co-operative banks from the definition of co-operative society by Finance Act, 2015 thereby intending to deduct tax at source under 194A that the said co-operative banks are not speci of genus of co-operative society excluding them from exemption or deduction under the provisions of Chapter VIA by virtue of section 80P of the Act. Following the interpretation of the Hon'ble Karnataka High Court in the above said decision, the Ld. PCIT held that the assessee was not entitled to deduction under 80P(2)(d) thereby directing the Assessing Officer to frame assessment de novo. We would like to place our reliance on the decisions relied upon by the Ld. AR in the cases mentioned below: 1. Petit Towers Co-op. Housing Society Ltd. v. ITO [IT Appeal No. 549/MUM/2021] 2. Solitaire CHS Ltd. v. Pr. CIT [IT Appeal No. 3155/Mum/2019, dated 29-11-2019] 3. Jai Hind Co-operative Housing Society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stments held with a co-operative bank would be entitled for claim of deduction u/s 80P(2)(d) of the Act. We find that the aforesaid issue had exhaustively been looked into by the ITAT, G bench, Mumbai in the case of M/s Solitaire CHS Ltd, Vs. Pr.CIT-26, Mumbai ITA No.3155/Mum/2019, dated 29.11.2019, wherein the Tribunal had observed as under : 6. We have heard the 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 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, or not. In our considered view, the issue involved in the present appeal revolves 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. We are in agreement with the view taken by the Pr. CIT, that with the insertion of sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. However, at the same time, we are unable to subscribe to his view that the aforesaid amendment would jeopardise 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 cooperative society had been defined under Sec. 2(19) of the Act, as under:- (19) Co-operative society means a cooperative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of Totgars Co-operative Sale Society Ltd. vs. ITO (2010) 322 ITR 283 (SC) is concerned, we are of the considered view that the same being distinguishable on facts had wrongly been relied upon by him. The adjudication by the Hon ble Apex Court in the aforesaid case was in context of Sec. 80P(2)(a)(i), and not on the entitlement of a co-operative society towards deduction under Sec. 80P(2)(d) on the interest income on the investments/deposits parked with a co-operative bank. Although, in all fairness, we may herein observe that the Hon'ble High Court of Karnataka in the case of Pr. CIT Vs. Totagars co-operative Sale Society (2017) 395 ITR 611 (Karn), had concluded that a co-operative society would not be entitled to claim of deduction under Sec. 80P(2)(d). At the same time, we find, that 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 Hon ble High Court of Gujarat in the case of State Bank Of 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 cooperative bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to uphold the view taken by the Pr. CIT that the failure on the part of the A.O to be disallow the assessee s claim for deduction u/s 80P(2)(d) had rendered the assessment order passed by him u/s 143(3) of the Act, dated 31.08.2017 as erroneous in so far it was prejudicial to the interest of the revenue. 9. Accordingly, on the basis of our aforesaid observations, we herein not finding favor with the view taken by the Pr. CIT that the order passed by the A.O u/s 143(3), dated 31.08.2017 was erroneous in so far it was prejudicial to the interest of the revenue within the meaning of Sec. 263 of the Act set-aside the same and restore the order passed by the A.O u/s 143(3) of the Act, dated 31.08.2017. 9. From the above observation, we are of the view that the facts of the present case are similar to the decisions that have been cited above and by respectfully following the said decisions, we hold that the Ld. PCIT has erred in concluding that the assessment order passed by the Assessing Officer under section 143(3) dated 19-4-2021 was erroneous insofar as it is prejudicial to the interest of the revenue as per the provisions of section 263 of the I.T. Act, 1961, we set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
