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TMI Blog2022 (12) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... ome returned by the assessee society. As AR contended that the assessee society invested in fixed deposits with State Bank of India only as stopgap arrangement to earn some income on the then surplus funds and it was clearly incidental income, eligible for deduction u/s 80P and one more opportunity may be given to the assessee to furnish it s explanation before the Ld.PCIT for which the Ld.DR has not raised any objection. Considering all we are of the view that it is a fit case to grant one more opportunity of being heard to the assessee - we direct the Ld.PCIT to pass order after giving opportunity of being heard to the assessee and the assessee is also directed to cooperate with the Ld.PCIT - Appeal of the assessee is allowed for st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nam and the State Bank of India, Chittivalasa Branch, in which the assessee had invested in fixed deposits and earned interest income, as evident from the schedule of investments annexed to balance sheet as on 31.03.2017 during the previous year, relevant to the A.Y.2017-18. However, the Ld.PCIT noticed that the assessee had claimed deduction of it s entire income of Rs.31,72,670/- u/s 80P of the Act, which includes the interest income earned on the fixed deposits made with the State Bank of India. However, as per section 80P(2)(d) of the Act, deduction is allowable only in respect of any income by way of interest or dividends derived by the cooperative society from its investments with any other co-operative society. Hence, the Ld.PCIT hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the following grounds : 1) The impugned order passed dated 04.03.2022 u/w 263 of the I.T.Act by the Principal Commissioner of Income Tax, Viakhapatnam-1 is unjust and uncalled for. 2) The Learned Principal Commissioner of Income Tax ought to have appreciated the fact that the Explanation 2 to Sec.263 of the I.T.Act was not at all applicable to the appellant society s case, as the impugned issue of deduction u/s 80P of the I.T.Act has been thoroughly examined and passed order by the then learned assessing officer u/s 143(3) of the I.T.Act by accepting the income earned by appellant society for the Asst.Year 2017-18. 3) The Learned Principal Commissioner of Income Tax ought to have appreciated the fact that the interest incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Principal Commissioner of Income Tax ought to have appreciated the fact that the appellant society s case for the Asst.Year 2017-18 was selected for limited scrutiny only with the reason to verify deduction under Chapter VIA of the I.T.Act and such verification was done by the then learned assessing officer in the scrutiny assessment proceedings and passed order dated 10.12.2019 u/s 143(3) of the I.T.Act by accepting the claim of deduction u/s 80P of the I.T.Act and by accepting the income returned by the appellant society. 4. All the grounds of appeal are related to disallowance of claim of deduction u/s 80P of the Act with respect to interest income accrued / received on the fixed deposits made with State Bank of India. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs and assessment order dated 10.12.2019 u/s 143(3) of the I.T.Act was passed by accepting the claim of deduction u/s 80P of the I.T.Act and by accepting the income returned by the assessee society. The Ld.AR contended that the assessee society invested in fixed deposits with State Bank of India only as stopgap arrangement to earn some income on the then surplus funds and it was clearly incidental income, eligible for deduction u/s 80P of the Act. The Ld.AR pleaded that one more opportunity may be given to the assessee to furnish it s explanation before the Ld.PCIT for which the Ld.DR has not raised any objection. Considering the facts and circumstances of the case and in order to meet the principles of natural justice, we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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