9911796707
TMI Blog2023 (9) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Assessment Year, 2018-19, the assessee filed its Return of Income declaring Nil income, after claiming deduction u/s. 80P of the Act. The assessment was taken up for scrutiny and assessment order u/s. 143(3) of the Act was passed on 08-02-2021 accepting the returned 'Nil' income. 3. On verification of records by PCIT, it was found that the assessee has shown Gross total income of Rs. 1,22,53,554/- on which deduction u/s. 80P of Rs. 1,22,53,554/- was claimed. On examination of records, it is noticed that the assessee had kept large amount of idle and surplus funds in Co-operative Bank and earned interest income of Rs. 1,22,53,554/- as follows: Sr. No. Name of the bank Amount of interest earned (Rs) 1 Banas Bank FD Account Interest 64,33,521/- 2 Banas Bank Savings Account Interest 33,463/- 3 BDC Bank Cash CE Account Interest 17,55,803/- 4 BDC Bank Cash CE Account Interest 3,85,980/- 5 BDC Bank FD Account Interest S S Mark 36,44,787/- TOTAL INTEREST EARNED FROM COOPERATIVE BANKS 1,22,53,554/ - 3.1. The assessee was issued a show cause notice, why the amount of Rs. 1.22 crores being interest from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Bank. (3) That on facts and in law, the entire claim ought to be allowed as prayed for. (4) The appellant craves leave to add, alter, amend any ground of appeal. 6. Per contra, the Ld. CIT-DR Shri Sanjeev Jain appearing for the Revenue supported the order passed by Ld. PCIT and submitted the Jurisdictional High Court in the case of State Bank of India vs CIT held that interest income on deposit placed with commercial bank is not exempt u/s. 80P(2)(a)(i) of the Act. Further Jurisdictional High Court in the case of Katlay Kariyana Merchant Sahkari Sarafl Mandli Ltd. Vs. ACIT held that co-operative banks are not specie of genus co-operative society, which would be entitled to exemption or deduction under the special provisions of Chapter VI-A in the form of section 80P of the Act. Therefore the Revision order passed by the PCIT does not require any interference and the assessee appeal is liable to be dismissed. 7. Per Contra, the Ld. Counsel Shri M.K. Patel appearing for the assessee submitted that the issue regarding claim of deduction under section 80P was duly enquired by the Assessing Officer during the course of assessment proceedings. He further submitted that in respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-03-2023 clearly explained that the issue was examined by Assessing Officer and that the assessment order is not erroneous. The assessee also explained that similar disallowances/issues was subject matter of appeal filed by the Revenue before Tribunal in ITA Nos. 1891/Ahd/2014 & 2987/Ahd/2015 relating to the Assessment Years 2011-12 and 2012-13 and the assessee was allowed similar deductions. 9. Further the Hon'ble Jurisdictional High Court in Aryos Arcade Ltd. v. Pr. CIT (2019) 412 ITR 277 (Gujarat) held that merely because Commissioner held a different belief that would not permit him to take the order in revision, it is further held that when Assessing Officer made full enquiry, he made up his mind, which is one of the plausible view and therefore the revision is not valid. Further, Hon'ble Madras High Court in CT v. Mepco Industries Ltd. (2007) 163 Taxman 648/294 ITR 121 (Madras) held that when two views are possible on an issue and it is not the case of the Commissioner that the view taken by Assessing Officer is not permissible in law, Commissioner cannot invoke his jurisdiction under section 263 of the Act. 9.1 As we have noted above the assessing officer has made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) of the Act is concerned, it is required to be noted that the assessee claimed deduction under Section 80(P)(2)(d) of the Act on the interest earned on the fixed deposit with Cooperative Bank and the Societies and it has been found that as such the income was received from the investment in Cooperative Societies and Cooperative Bank Considering Section 80(P)(2)(d) of the Act when the only requirement was that the income should be received from investment in Cooperative Societies and the Cooperative Bank which in the present case has been fulfilled, it cannot be said that the learned Tribunal has committed any error in deleting disallowance of Rs. 1,42,19,515/- under section 80(P)(2)(d) of the Act. We are in complete agreement with the view taken by the learned Tribunal. Under the circumstances, proposed question B is also answered against the revenue." We therefore follow hon'ble jurisdictional high court's judgment than hon'ble Karnataka high court's decision. Coming to hon'ble apex court's decision in the Citizen Co-operative Society Ltd. (supra), we find that there is no dispute about the category of members as it was before their lordships. We thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come was received from the investment in Cooperative Societies and Cooperative Bank. Considering Section 80(P)(2) (d) of the Act when the only requirement was that the income should be received from investment in Cooperative Societies and the Cooperative Bank which in the present case has been fulfilled, it cannot be said that the learned Tribunal has committed any error in deleting disallowance of Rs. 1,42,19,515/- under Section 80(P(2)(d) of the Act. We are in complete agreement with the view taken by the learned Tribunal. Under the circumstances, proposed question B is also answered against the revenue. 11. Respectfully following the above judicial precedents, in our considered view, the Ld. PCIT erred in holding that the order passed by A.O. as erroneous and prejudicial to the interest of the Revenue on account of allowability of interest earned by the assessee from cooperative banks, coupled with the fact when the Ld. Assessing Officer had made due enquiries on this issue, during the course of original assessment proceedings. 12. In the result, the appeal filed by the Assessee is hereby allowed. ITA No. 350/Ahd/2023 (Shri Ambika Co-Op. Credit Society Ltd.) 13. In this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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