9911796707
TMI Blog2020 (1) TMI 1710X X X X Extracts X X X X X X X X Extracts X X X X ..... hout prejudice to the above, during the assessment proceeding, the Assessing officer vide notice u/s. 142(1) dt. 30/10/2017 called details for deduction claimed under chapter VI-A and in regards to the same, the assessee vide letter dt. 15/11/2017 submitted detailed breakup of deduction claimed u/s 80P along with copies of interest certificates and the order passed by the Assessing officer u/s 143(3) was after considering the details and applying his mind, and hence the order of Assessing officer cannot be said to be erroneous or prejudicial to the interest of revenue and hence the order passed u/s 263 may be quashed. II. Disallowance of deduction claimed u/s. 80(P)(2)(d) of Rs. 56,16,242/- 3. Without prejudice to the above, the learned Commissioner of Income-tax erred in directing the Assessing officer to disallow the claim of deduction u/s. 80P(2)(D) in respect of interest earned from deposits kept in co-operative banks without appreciating that, co-operatives banks are registered under the Co-operatives Societies Act, 1912 with a license to undertake banking activities and therefore assessee is eligible to claimed deduction u/s. 80(P)(2)(d). Accordingly the direction to disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee that as the A.O after necessary deliberations had framed the assessment, therefore, the exercise of the revisional jurisdiction under Sec. 263 by the Pr. CIT was clearly ousted. Also, the assessee tried to impress upon the Pr.CIT that no error did emerge from the assessment framed by the A.O vide his order passed under Sec. 143(3), dated 23.12.2017. It was averred by the assessee that its claim for deduction under Sec. 80P(2)(d) in respect of the interest income on its investments with co-operative banks was well in order. Apart from that, the assessee submitted before the revisional authority that the calculation of the AMT by the A.O suffered from a clerical mistake and the calculation of its tax liability under the normal provisions was rightly done by the A.O. However, the submissions of the assessee did not find favour with the Pr.CIT. Observing, that the assessment framed by the A.O under Sec. 143(3), dated 23.12.2017 was erroneous insofar it was prejudicial to the interest of the revenue for two reasons viz. (i) that, the A.O had wrongly allowed the assesses claim for deduction under Sec. 80P(2)(d) on the interest income earned from its investments with co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrived at by the A.O as erroneous. As regards the observation of the Pr.CIT that the A.O had erred in not computing the tax liability of the assessee as per the AMT, it was submitted by the Ld. A.R that the aforesaid observation of the revisional authority was in itself based on incorrect working of the A.O in the ITNS. On the basis of his aforesaid contentions, it was averred by the Ld. A.R that as the Pr.CIT had erroneously assumed jurisdiction under Sec. 263 of the Act, therefore, the order passed by him was liable to be set aside. 5. Per contra, the Learned Departmental Representative (for short 'D.R) relied on the order passed by the Pr. CIT under Sec. 263 of the Act. It was submitted by the Ld. D.R that as the assessment framed by the A.O was found to be erroneous insofar it was prejudicial to the interest of the revenue, therefore, the Pr.CIT has rightly exercised her revisional jurisdiction and 'set aside' the assessment framed by the A.O, vide her order passed under Sec. 143(3),dated 23.12.2017. 6. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stments with cooperative banks, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. As per the Pr. CIT, as the co-operative banks with which the surplus funds of the assessee were parked as investments were neither Primary Agricultural Credit Society nor a Primary Co-operative Agricultural and Rural Development Bank, therefore, the interest income earned on such investments was not eligible for claim of deduction under Sec. 80P(2)(d) of the Act. 8. We have given a thoughtful consideration to the aforesaid issue before us and are unable to persuade ourselves to be in agreement with the view taken by the Pr. CIT. Before proceeding further, we may herein reproduce the relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. "80P(2)(d) (1). Where in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that though the co-operative bank pursuant to the insertion of sub-section (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, however, as a co-operative bank continues to be a co-operative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. Our aforesaid view that a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income derived from its investments held with a co-operative bank is covered in favour of the assessee in the following cases: (i) Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum) (ii) M/s C. Green Cooperative Housing and Society Ltd. Vs. ITO-21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31.03.2017 (iii) Marvwanjee Cama Park Cooperative Housing Society Ltd. Vs. ITO-Range-20(2)(2), Mumbai (ITA No. 6139/Mum/2014, dated 27.09.2017. Also, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,80,257/- [Rs. 1,13,55.916/- (adjusted total income) x 18.5% (rate of tax under Sec. 115JC)], however, the A.O had wrongly calculated the tax liability of the assessee on its normal income at Rs. 19,47,515/- (including surcharge & e.cess) [Rs. 57,39,670/- (normal income) x 30% (rate of tax under the normal provisions)]. On the basis of his aforesaid observations the Pr.CIT was of the view that since the AMT was more than the normal tax liability of the assessee, therefore, the calculation of the tax liability by the A.O on the normal income of the assessee had resulted in short levy of tax of Rs. 5,75,547/- (including interest under Sec. 234B of the Act). Accordingly, the Pr.CIT was of the view that the assessment framed by the A.O under Sec. 143(3), dated 23.12.2017 was also erroneous, insofar it was prejudicial to the interest of the revenue on the aforesaid count. 11. On a perusal of the order of the Pr.CIT, we find, that it has been the claim of the assessee that the A.O was in error in working out the 'adjusted total income' of the assessee under Sec. 115JC of the Act. As can be gathered from the submissions made by the assessee before the Pr.CIT, the tax liability of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct working of the A.O in the ITNS. In sum and substance, a correct working of the AMT on the 'adjusted total income' of Rs. 57,39,674/- is clearly found to be lower than the tax liability of the assessee under the 'normal provisions'. On the basis of the aforesaid facts, we are of a strong conviction that as the calculation of the tax liability by the A.O under the 'normal provisions' at Rs. 19,47,515/- [Rs. 57,39,670/- (normal income) x 30% (+) Surcharge and E.cess] is higher than the correct amount of AMT viz. [Rs. 57,39,674/- (adjusted total income) x 18.5%], therefore, the calculation of the tax liability by the A.O as per the 'normal provisions' at Rs. 19,47,515/- cannot be held to be prejudicial to the interest of the revenue. Accordingly, on the basis of our aforesaid deliberations, we are of the considered view that the Pr.CIT is in error in concluding that the saddling of the assessee with the tax liability under the normal provisions had rendered the assessment order passed by the A.O under Sec. 143(3), dated 23.12.2017 as erroneous, insofar it was prejudicial to the interest of the revenue. 12. On the basis of our aforesaid observations, we set aside the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
