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TMI Blog2023 (4) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ers under section 263 of the Act. Therefore, Ground No.1 and 3 raised by the assessee are dismissed. Applicability of the Hon ble Supreme Court s decisions - Assessee has referred to the Hon ble Supreme Court s decision in the case of Tolgar s Co-op Sale Society [ 2010 (2) TMI 3 - SUPREME COURT] ; Mavilayi Services Cooperative Credit Society Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] and Tumkur Merchants Suharda Credit Co-op Society Ltd [ 2015 (2) TMI 995 - KARNATAKA HIGH COURT] - HELD THAT:- As mentioned in earlier paragraphs no factual details have been brought on records by ld.AR, therefore in the absence of factual details the assessee cannot plead applicability of the Hon ble Supreme Court s decision as mentioned above. Therefore, Ground No.4, 5 and 6 are dismissed. Notice was not served on assessee - assessee has claimed that notice under section 263 was collected by him from the Income Tax Department - HELD THAT:- It is an admitted position by the assessee that notice under section 263 has been received by assessee. Whether the Department sends the notice by post or whether assessee collects the notice, in both the scenario the service of notice is complete, when as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reliance placed on the Supreme Court Judgment reported as Tolgar's Co-op Sale Society (2010) 188 taxmann.com 282 (SC) is misplaced as the same was decided on the facts of that case only. It had no presidential value. The order passed by Pr. CIT under section 263 of the Act being without jurisdiction be set aside. 5. On the facts and in the circumstances of the case and in law the appellant-assessee relies on the Hon'ble Supreme Court Judgment reported as Mavilayi Services Co-operative Credit society Ltd vs. CIT (2021) 431 ITR 1 (SC). The verdict is applicable to the facts of this case. 6. On the facts and in the circumstances of the case and in law and since Hon'ble Karnataka High Court in Tumkur Merchants Suharda Credit Co-op Society Ltd., vs. CIT (2017) 396 ITR rightly held that the deposits in bank made out of members deposits since assessee accepts deposits from members only. They are liable to be returned to members and hence are shown to be liability and is the income earned there from is the income of the appellant society. The Ld. Pr. CIT erred in holding otherwise. The claim be allowed to assessee. 7. On the facts and in the circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer also has not verified this aspect ... 10. Since the assessee s large claim of deduction under chapter Vl-A was the reason of selection of its case for scrutiny; the Assessing Officer was required to conduct in-depth verification of the assessee s claim. Since the above mentioned bank is not a cooperative society, the interest earned is not eligible for deduction under Section 80P(2)(a)(i) or 80P(2)(d). Hence, allowing of the deduction by the Assessing Officer under section 80P for the above amount is not as per the provisions of the Income Tax Act, 1961 ... 3. We have heard both the parties and perused the records. The Assessing Officer(AO) has passed order under section 143(3) on 23.12.2019 without discussing how assessee is eligible for deduction under section 80P of the Act. The relevant parts of the assessment order are reproduced here as under : 3. In response to the said notices, the assessee has submitted that requisite details on ITBA system. 4. The assessee society is Co-operative Society and engaged in providing credit facilities to members and earns interest income from co-operative bank. 5. After considering the return of income filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation 1. For the removal of doubts, it is hereby declared that, for the purposes of this sub-section, (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Principal Chief Commissioner or Chief Commissioner or Principal Director General or Director General or Principal Commissioner or Commissioner authorised by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiry or any relief without inquiring into the claim, makes the order erroneous and prejudicial to the interest of the Revenue. 7. In this case, as discussed in earlier paragraphs, no enquiry has been made by the Assessing Officer during the assessment proceedings regarding the eligibility of the assessee for deduction under section 80P of the Act. Therefore, the assessment order is erroneous and prejudicial to the interest of the Revenue. Hence, we uphold the order under section 263 of the Act dated 29.03.2022. Accordingly, Ground No.1, 2 and 4 are dismissed. Ground No.1 and 3 : 8. The assessee in Ground No.1 and 3 has claimed that case was selected for limited scrutiny; hence, AO had no power to travel beyond the issues mentioned in limited scrutiny. In this case ld.Pr.CIT in the order under section 263 has specifically mentioned that the case was selected for limited scrutiny to verify assessee s claim of deduction under Chapter-VIA. The ld.AR has not produced any document to rebut the findings given by ld.Pr.CIT that the case of assessee was selected to verify assessee s claim of deduction under Chapter-VIA. Since the case of assessee was selected for verification ..... X X X X Extracts X X X X X X X X Extracts X X X X
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