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2024 (1) TMI 860 - AT - Income TaxRevision u/s 263 - taxability of income from interest on fixed deposits under the head Income from Other Source and thereby not allowing the deduction claimed u/s. 80P - HELD THAT - It is pertinent to note that at the time of passing/completing the AO u/s 143(3) of the Act, the issue related to 80P(2)(d) claimed by Credit Co-operative Societies was very well governed by case of Surat Vankar Sahkari Sangh Limited, 2016 (7) TMI 1217 - GUJARAT HIGH COURT and this issue was rightly claimed by the assessee at that juncture. Current invocation of Section 263 of the Act does not fulfil the criteria of assessment being erroneous or prejudicial to the interest of Revenue with the second view which is not allowable under Section 263 of the Act and its revisional powers. Hence, as held in earlier Assessment Years, wherein the order u/s 263 has been quashed in assessee s own case, the present Assessment Year will also be governed by the same contentions of the DR taken in submissions dated 08.12.2023, will not be applicable in toto as the assessee s case is governed by its own order for subsequent Assessment Year. Appeal of assessee allowed.
Issues involved:
The appeal against the order passed by the Principal Commissioner of Income Tax for the Assessment Year 2017-18. Grounds of appeal: 1. The order passed by the Principal Commissioner under Section 263 of the Income Tax Act was challenged as being without jurisdiction, bad in law, and void ab-initio. 2. Dispute regarding taxability of income from interest on fixed deposits under the head Income from Other Source and the denial of deduction claimed under Section 80P of the Income Tax Act. 3. Allegation that the Principal Commissioner erred in setting aside the issue despite recording a prima facie finding in favor of the appellant. 4. Failure of the Principal Commissioner to point out any error in the assessment order regarding income from interest on fixed deposits. 5. Objection to the order setting aside the assessment to be redone afresh instead of focusing solely on the taxability of income from interest on fixed deposits. Details of the judgment: The assessee filed the return of income for Assessment Year 2017-18, declaring total income of Rs. Nil with a claimed deduction of Rs. 27,97,39/-. The assessment was completed under Section 143(3) of the Income Tax Act, determining total income at Rs. Nil. The Principal Commissioner observed discrepancies in the treatment of interest income from fixed deposits by a Mandali/Co-operative Society, leading to the initiation of proceedings under Section 263 of the Act. The Principal Commissioner directed the Assessing Officer to conduct a fresh assessment after issuing a show cause notice. The assessee challenged the order under Section 263, arguing that a similar issue had been decided in their favor in a previous year. The Authorized Representative (AR) highlighted a previous tribunal order in the assessee's favor on the same issue of claiming deduction under Section 80P of the Act. After hearing both parties and reviewing the material on record, the Tribunal noted that the issue of deduction under Section 80P(2)(d) for Credit Co-operative Societies had been settled by the Hon'ble Gujarat High Court in a previous case. The Tribunal found that the invocation of Section 263 was not justified as the assessment was not erroneous or prejudicial to the revenue's interest. Citing previous decisions in the assessee's favor, the Tribunal allowed the appeal, emphasizing that the current year's assessment should be governed by the same contentions as in previous years. In conclusion, the appeal of the assessee was allowed, and the order was pronounced in open court on January 17, 2024.
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