2023 (6) TMI 1314 - AT - Income Tax

Revision u/s 263 by CIT - addition u/s 80P - interest income earned on the investment of surplus money - HELD THAT - As decided in Lokmangal Nagri Sahakari Path Sanstha Maryadit 2022 (12) TMI 355 - ITAT PUNE error in the assessment order should be one that it is not debatable or plausible view. In a case where the Assessing Officer examined the claim, took one of the plausible views, the assessment order cannot be termed as an erroneous‛. In the present case, we find that admittedly the interest income was earned from the cooperative banks, the cooperative bank is also a specie of cooperative society, therefore, the interest income earned by the cooperative society from the cooperative banks qualifies for deduction u/s 80(P)(2)(d) of the Act. Such interest also qualifies for exemption u/s 80P(2)(a)(i) as held by the Co-ordinate Bench of Pune Tribunal in the case of Nashik Road Nagari Sahkari Patsanstha Limited 2021 (12) TMI 1259 - ITAT PUNE Therefore, it cannot be said that the assessment order is erroneous or prejudicial to the interests of the revenue. Therefore, we are of the considered opinion that the order of revision passed by the Ld. PCIT u/s 263 of the Act cannot be sustained in the eyes of law. Hence, the grounds of appeal raised by the assessee stand allowed.

Summary

Issues involved:
The judgment involves issues related to the jurisdiction of revisionary orders under section 263 of the Income-tax Act, 1961 and the eligibility of the assessee to claim deduction under section 80P(2)(d).

Jurisdiction of Revisionary Order (Ground No. 1):
The appeal challenged the revisionary order under section 263, contending that the Assessing Officer had taken a possible view and allowed the deduction claim after verification. The appellant argued that the order lacked jurisdiction and should be set aside. Despite the absence of the assessee, the Tribunal proceeded with the hearing and found that the issue had been previously addressed by the Pune Tribunal in a similar case for the assessment year 2017-18. The Tribunal observed that the interest income earned by the cooperative society from cooperative banks qualified for deduction under section 80(P)(2)(d) of the Act.

Eligibility of Deduction under Section 80P(2)(d) (Ground No. 2):
The appellant contested the conclusion that the assessee was ineligible to claim deduction under section 80P(2)(d) for interest income earned on investments with cooperative banks. The appellant argued that the Assessing Officer had allowed the claim after due consideration and that the failure to examine the issue did not render the assessment order erroneous. The Tribunal referred to judicial precedents and held that the interest income earned on investments with banks was eligible for exemption under section 80P(2)(a)(i) of the Act. It was concluded that the revisionary order was not sustainable in law, and the appeal of the assessee was allowed.

Separate Judgment by the Tribunal:
The Tribunal, comprising Shri Partha Sarathi Chaudhury (Judicial Member) and Shri G. D. Padmahshali (Accountant Member), pronounced the judgment on Thursday, 15th June 2023, allowing the appeal of the assessee in terms of rule 34 of ITAT Rules.