9911796707
TMI Blog2021 (2) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s. 80P by Centralized Processing Centre, Bengaluru to the returned income without giving any intimation for making any adjustments of disallowing the deduction claimed by the Appellant u/s. 80P of Rs. 2,91,169/-. The Appellant submits that the adjustments made to the Returned Income be deleted and deduction claimed u/s. 80P be allowed. 2. On the facts and in the circumstances of the case, the Appellant submits that the Honorable Commissioner of Income Tax (Appeal) erred in upholding the action of Centralized Processing Centre, Bengaluru of disallowing the interest income of Rs. 2,41,169/- earned on Fixed Deposits held with Cooperative banks claimed by the Appellant u/s. 80P(2)(d) of the Income Tax Act, 1961. The Appellant submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant without giving any intimation for making any adjustments either in writing or in electronic mode as per the provisions of Section 143(1)(a) of the Act. Learned CIT(A) rejected the contention regarding disallowance made u/s. 80P(2)(d) for Rs. 2,47,769/- being interest receipt from cooperative bank. In this regard he referred to the provisions of the Act and referred to several other decisions. He finally held as under:- "In view of the above discussions and respectfully following the decision of the Hon'ble Karnataka High Court in the above referred case of PCIT vs. Totagars Co-operative Sale Society, I am of the considered opinion that the interest income earned by the appellant from Co-operative Bank is not eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , twenty thousand rupees. Explanation-In this clause, 'consumers co-operative society' means a society for the benefit of the consumers;]" 8. First of all it is noted that the adjustment has been done by the CPC Bengaluru under section 143(1)(a) of the Act. Section 143(1)(a) provides for processing of return where the total income is computed after making certain adjustment. It reads as under:- "143.(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:-- (a) the total income or loss shall be computed after making the following adjustments, namely:-- (i) any arithmetical error in the return; [***] (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in any of the above. That a cooperative society will not get exemption on the interest earned on deposits in cooperative bank is not something which is a subject matter of adjustment under section 143(1)(a) of the Act. I find that despite noting that there are tribunal decisions in favour of assessee, the learned CIT(A) has chosen not to follow the same by referring to some other decisions. I further find that learned CIT(A) has completely erred in treating the assessee as cooperative bank and invoking the provisions of section 80P(4). Section 80P(4) provides that:- (4) The provisions of this section shall not apply in relation to any co-operative bank other than a primary agricultural credit society or a primary co-operative agricultur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court observation in para 21 as under, wherein the Hon'ble Apex Court referred to its earlier decision of Citizen Cooperative Society Ltd. (supra):- "The following propositions may be culled out from the judgment: (I) That section 80P of the IT Act is a benevolent provision, which was enacted by Parliament in order to encourage and promote the growth of the co-operative sector generally in the economic life of the country and must, therefore, be read liberally and in favour of the assessee; (II) That once the assessee is entitled to avail of deduction, the entire amount of profits and gains of business that are attributable to any one or more activities mentioned in sub-section (2) of section 80P must be given by way of deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
