2023 (7) TMI 172 - AT - Income Tax

Revision u/s 263 - deduction u/s 80P(2)(a)(i) or 80P(2)(d) - Is assessment order is erroneous or prejudicial to the interests of the revenue? - HELD THAT - As decided in 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 AO examined the claim, took one of the plausible views, the assessment order cannot be termed as an erroneous . 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 The issue which is subject matter of revision is covered in favour of the assessee by judicial precedents. Therefore, it cannot be said that the assessment order is erroneous or prejudicial to the interests of the revenue. Thus the order of revision passed by the ld. PCIT u/s 263 of the Act cannot be sustained - Decided in favour of assessee.

Summary

Issues involved:
The judgment involves appeals by different assessees challenging orders of Principal Commissioner of Income Tax-2, Pune, and National Faceless Appeal Centre [NFAC], Delhi, for A.Y. 2018-19 and 2020-21, regarding the issue of deduction under section 80P(2)(a)(i) or 80P(2)(d) of the Income-tax Act, 1961.

Summary:
The appeals raised by the assessees were based on the identical issue of deduction under section 80P(2)(a)(i) or 80P(2)(d) of the Income-tax Act, 1961. The assessees contended that the matter was covered by a previous decision of the Pune Tribunal. The Pune Tribunal, after examining the facts, held that the interest income earned by the cooperative society from cooperative banks qualified for deduction under section 80P(2)(d) and also for exemption under section 80P(2)(a)(i). The Tribunal referred to various judicial precedents supporting this view and concluded that the assessment order was not erroneous or prejudicial to the interests of revenue. The Tribunal emphasized that when the issue is covered in favor of the assessee by judicial precedents, the revisionary orders passed by the authorities cannot be sustained in the eyes of the law. Therefore, the appeals of the assessees were allowed.

Separate Judgment:
The judgment was pronounced by Shri Partha Sarathi Chaudhury, Hon. Judicial Member, and Shri R.S. Syal, Hon. Vice-President on 3rd July, 2023.