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TMI Blog2015 (1) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... dit Co-operative Society engaged in providing credit facilities to its members. It has filed returns of the income for the assessment year 2007-08 claiming deduction under Section 80P(2)(a)(i) amounting to Rs. 2,04,03,878/- (Rupees Two Crore Four Lakh Three Thousand Eight Hundred and Seventy Eight only). The Assessing Officer has passed assessment under Section 143(3) of the Act on 29.12.2009 disallowing to the tune of Rs. 1,66,47,180/- (Rupees One Crore Sixty Six Lakh Forty Seven Thousand One Hundred and Eighty only) in respect of interest received from Gem Sugars Limited, Bilagi Sugars Limited and Nirani Cements Limited. However, the Assessing Officer allowed deduction under Section 80P(2)(a)(i) to the extent of Rs. 1,93,73,000/- (Rupees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-aside. 6. Aggrieved by the said order, the Revenue has preferred this appeal. 7. The only substantial question of law which arises for our consideration in this appeal is:- In the facts and circumstances of this case, whether the Revisional Authority was justified in invoking his power under Section 263 of the Act without the foundational fact of assessee being Co-operative bank was not there? 8. In the assessment order, the Assessing authority has clearly stated that the assessee is a Co- operative society and has not obtained any banking license. The business of the assessee is to provide credit facilities to its members. Since the assessee cannot c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty having its area of operation confined to a taluk and the principal object of which is to provide for long-term credit for agricultural and rural development activities." Therefore, the intention of the legislature is clear. If a Co-operative Bank is exclusively carrying on banking business, then the income derived from the said business cannot be deducted in computing the total income of the assessee. The said income is liable for tax. A Co-operative bank as defined under the Banking Regulation Act includes the primary agricultural credit society or a primary co-operative agricultural and rural development bank. The Legislature did not want to deny the said benefits to a primary agricultural credit society or a primary co-operative agri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r this Act if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. Therefore, it is clear that he cannot exercise the power of revision solely on the ground that the order passed is erroneous. He gets jurisdiction only if such erroneous order is prejudicial to the interest of the Revenue. "Prejudicial to the Revenue" means, lawful revenue due to the State has not been realized or cannot be realized. In other words, by the order of the assessing authority if the lawful revenue to the State has not been realized or cannot be realized, as the said order is prejudicial to the interests of the Revenue and also erroneous, he gets jurisdiction to interfere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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