2021 (9) TMI 1327 - AT - Income Tax

Revision u/s 263 by CIT - AO had accepted the assessees section 80P(2)(d) deduction claim(s) regarding interest income(s); derived from deposits made in SBI/Nationalised Bank(s) as eligible for the said relief - HELD THAT - Consideration to rival pleadings qua correctness of the learned PCITs foregoing revision direction and find no reason to uphold the same. This is primarily for the reason that hon ble jurisdictional high court decision in Vavveru Co-operative Rural Bank Ltd. 2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT holds that a co-operative society s income derived from deposits in nationalized banks/SBI is also eligible for 80P deduction. Their lordships have duly taken into consideration the hon'ble apex court s foregoing decision M/S. THE TOTGARS COOPERATIVE SALE SOCIETY LIMITED 2010 (2) TMI 3 - SUPREME COURT . We therefore hold that both the AO therein had not committed any error in not disallowing the assessees section 80P(2)(d) deduction claims in issue qua the respective interest income derived form fixed deposit in nationalised banks. PCITs revision direction under challenge herein forming subject matter of these two appeals stand reversed on the very analogy therefore. We lastly quote hon'ble apex court s landmark decision Malabar Industrial Co. Ltd. 2000 (2) TMI 10 - SUPREME COURT that an assessment has to be both erroneous as well as causing prejudice to the interest of revenue; simultaneously before the CIT or the PCIT; as the case may be, sets section 263 revision mechanism in motion. And that it is not each and every assessment which would attract revision proceedings but only those wherein the Assessing Officer has not taken one of the two possible views. We thus restore both the assessments herein as a necessary corollary.

Summary

Issues:
1. Delay in filing appeals
2. Correctness of PCITs revision directions regarding section 80P(2)(d) deduction claims

Delay in filing appeals:
The appeals in question were delayed by 31 days and 335 days, attributed to reasons such as communication gap and administrative delays. Citing legal precedents, the Tribunal condoned the delay, emphasizing the importance of substantial justice. The Tribunal proceeded to address the appeals after condoning the delay.

Correctness of PCITs revision directions regarding section 80P(2)(d) deduction claims:
The PCITs had revised the regular assessments, deeming them erroneous for allowing section 80P(2)(d) deduction claims related to interest income from deposits in nationalized banks. The PCITs relied on a Supreme Court decision to support their stance. However, the Tribunal disagreed with the PCITs, referring to a jurisdictional high court decision that supported the eligibility of such deductions. The Tribunal held that the Assessing Officers had not erred in allowing the deduction claims, reversing the PCITs' revision directions. The Tribunal highlighted the requirement for an assessment to be both erroneous and prejudicial to the revenue for revision proceedings to be initiated, restoring the assessments in question.

In conclusion, the Tribunal allowed the appeals of the assessees, reversing the PCITs' revision directions and restoring the assessments based on the eligibility of section 80P(2)(d) deduction claims related to interest income from deposits in nationalized banks.