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TMI Blog2023 (9) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... the consent of learned advocates for the respective parties, the petition is taken up for final hearing. 3. This petition is filed by the Surat District Cooperative Milk Producers Union Ltd. challenging the notice under Section 148 of the Income Tax Act, 1961, dated 31.03.2021 and the order dated 23.03.2022 disposing off objections. 4. Facts in brief are that for the assessment year 2017-18, the petitioner filed the original return of income on 21.09.2017 declaring a total income of Rs. 3,44,90,840/-. Thereafter, the case of the petitioner was selected for scrutiny assessment and a notice under Section 143(2) dated 14.08.2018 was issued. A notice under section 142(1) was issued on 19.08.2019 asking for certain details which include detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit that it was noticed that the assessee had claimed deduction of Rs. 5,06,10,523/- under Section 80P which included an amount of Rs. 5,05,60,523/-. Out of such claimed deduction interest of Rs. 3,59,26,908/- was renewed by the assessee from the Surat District Bank which is a cooperative Bank and not a cooperative society and therefore not eligible for deduction. Annexure to the notice under Section 142 only took into consideration nationalized banks and therefore there was no change of opinion. 8. He would rely on a decision of the Division Bench in the case of KATLARY KARIYANA MERCHANT SAHKARI SARAFI MANDALI LTD Versus ASST. COMMR. OF INCOME TAX reported in [2022] 140 taxmann.com 602 (Gujarat). He would extensively rely on paras 19 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -operative bank and not a co-operative society. As per section 80P(2) (d) of the I.T. Act, 1961; same was not allowable and it was required to be disallowed. ... ... 6. Basis of forming reason to believe and details of escapement of income: As discussed hereinabove, that the assessee had claimed deduction u/s. 80P(2)(d) of the I.T. Act, 1961 of interest of Rs. 3,59,26,098/- received from investment made in Surat Cooperative Bank which is not allowable under section 80P(2)(d) of the Act. Therefore, I have reason to believe that the income to the tune of Rs. 3,59,26,098/- chargeable to tax has escaped assessment within the meaning of Section 147 of the I.T. Act, 1961 for A.Y. 2017-18." 10. In this context of notice under sub-section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65,34,392/- and the same is claimed as deduction u/s. 80P(2)(d) of the I.T. Act. B. The plain reading of provision of Section 80P(2)(d) of the Act state: "In respect of any income by way of interest or dividends derived by the Co-Operative Society from its investment with any other Co-Operative Society, a Co-Operative Society is entitled to deduction of the whole of such income u/s 80P(2)(d) of the Act. However, Interest earned from investment made in any Bank, not being a Co- Operative Society, is not deductible u/s 80P(2)(d)". From the plain reading of the above provision, it is clear that the section refers to interest and dividends earned from investments in another co-operative society only. Thus, the deduction cannot be extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l on record for formation of reasonable belief to reopen the assessment within the period of four years. The respondent has relied upon the assessment record for the year under consideration. The respondent has also relied upon the Circular No. 665 of CBDT dated 5th October, 1993 for the issue of considering the Long Term Capital Gains and the Short Term Capital Gains shown by the petitioner in the return of income considering the sell of the Government of India Securities as investment instead of stock-in-trade. 7. On perusal of the record, it is apparent that the Assessing Officer during the course of regular assessment has considered the computation of LTCG and STCG which was declared by the petitioner in the Return of Income together ..... X X X X Extracts X X X X X X X X Extracts X X X X
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