9911796707
TMI Blog2025 (5) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The brief facts of the case are as follows: 3.1. The Assessee is a Co-operative Society engaged in the business of providing credit facilities, by way of loans and advances to its members. For the Assessment Year (AY) 2018-19, the Assessee filed its return of income on 06.10.2018, declaring a total income of Rs.NIL after claiming deductions under Section 80P of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The return was selected for scrutiny under the E-assessment Scheme, 2019, and an assessment order under Section 143 (3) of the Act was passed on 06.08.2020, accepting the returned income as filed. 3.2. Upon examination of the assessment record under Section 263 of the Act, the learned Principal Commissioner of Income Tax (for short 'PCIT'), Ahmedabad-3, observed that the Assessee had disclosed a gross total income of Rs. 35,49,682/-, on which deduction to the same extent was claimed under Section 80P. The return of income revealed that the Assessee had earned interest income amounting to Rs. 16,84,431/- from Fixed Deposits placed with Mehsana District Central Co-operative Bank Ltd., Mehsana, and Mehsana Urban Co-operative Bank Ltd., Vijapur. This amount wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Ld. A.R. during his submission. We have also gone through the various documentary evidences filed in the form of paper book (PB) by learned AR of the assessee. We have noted that during the assessment proceeding the Assessing Officer vide notice under section 143 (2)/142 (1) of the Act dated 31-8-2015 and 13-4-2016. The assessee filed its reply furnished required details and after examining the issue allowed the deductions under section 80P (2) (d) as discussed in Page 2 of the assessment order dated 08-02-2021, thus the question no inquiry by the A.O. does not arise. 8.1. The Ld. PCIT before passing under section 263 of the Act, identified the issue regarding the claim of deduction under section 80P (2) (d) in its show cause notice dated 20-2-2023. The assessee in its reply dated 27-02-2023 & 15-03-2023 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 simila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction issue in respect of ordinary and nominal members. We however find that the above former decision goes contrary to hon'ble jurisdictional high court's judgment in Tax Appeal No. 473 of 2024 CIT vs. Sabarkantha District Cooperative Milk Porducers Union Ltd. declining Revenue's identical question of law challenging tribunal's decision allowing Section 80P deduction in respect of interest earned on fixed deposits with a cooperative bank in assessment year 2009-10 i.e. post Section 80P(4) amendment w.e.f. 01.04.2007. Their lordships' reasoning to this efiect reads as under: "4.0. Now, so far as proposed question no. B i.e. whether the Appellate Tribunal has substantially erred in upholding the order of the CIT(A) in deleting the disallowances of Rs. 1,42,19,515/- under Section 80P (2) (d) of the Act is concerned, it is required to be noted that the assessee claimed deduction under Section 80P (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 80P (2) (d) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. Therefore, the twin conditions that the assessment order is erroneous and so far as prejudicial to the interest of revenue, as prescribed under section 263 is not fulfilled in the present case. 10.3. The Hon'ble Gujarat High Court in the case of CIT vs. Sabarmantha District Co-Op. Milk Producers Union Ltd. in Tax Appeal No. 473 of 2014 held as follows: 4.0. Now, so far as proposed question no. B i.e. whether the Appellate Tribunal has substantially erred in upholding the order of the CIT(A) in deleting the disallowances of Rs. 1,42,19,515/- under Section 80P (2) (d) of the Act is concerned, it is required to be noted that the assessee claimed deduction under Section 80P (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 80P (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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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