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TMI Blog2023 (10) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... evisionary order of Pr. Commissioner of Income Tax-2, [for short PCIT ] dt. 21/03/2022 passed u/s 263 of the Income-tax Act, 1961 [for short the Act ], which ascended out of assessment order dt. 24/12/2019 passed u/s 143(3) by the Income Tax Officer, Ward 3(5), Pune [for short AO ]. 2. Briefly stated the facts of the case are that; 2.1 By an assessment order passed u/s 143(3) of the Act, the Ld. AO without variation had accepted the return of income filed by the assessee society declaring NIL income after a claim for deduction u/s 80P(2)(a)(i) for sum of ₹50,24,411/- deduction u/s 80P(2)(d) for sum of ₹14,19,057/-. 2.2 The interest dividend on investment claimed as deduction u/s 80P(2)(d) of the Act and allowed by the Ld. AO is held as erroneous and prejudicial to the interest of Revenue by the Ld. PCIT in his revisionary jurisdiction for the solitary reasons that interest dividend on investment was earned from Pune District Central Co-op. Bank [for short PDCC ] being a bank and ineligible owing to law laid down by Hon ble High court of Karnataka in the case of PCIT Vs Totgar Co-op. Sale Society reported in 395 ITR 611. Thus the Ld. PCIT set-aside t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 2017-18, order dated 29/11/2022, wherein also it was the order passed u/s 263 of the Act read with issue of deduction u/s 80P(2)(a)(i) or 80P(2)(d) of the Act. We observe that the Co-ordinate bench after an elaborated discussion has quashed the revisionary order as contra-legem as follows: 3 . The appellant is a cooperative society formed under the Maharashtra Co-operative Societies Act, 1960. It is engaged in the business of accepting deposits from members and providing credit facilities to its members. The original Return of Income for the assessment year 2017- 18 was filed on 18.10.2017 disclosing total income of Rs. 3,11,740/-. Subsequently, the assessee revised the return of income declaring Rs. Nil income after claiming deduction of Rs. 6,32,86,382/- under the provisions of section 80P of the Income Tax Act, 1961 ( the Act ). Against the said return of income, the assessment was completed by the Assessing Officer accepting the returned income vide order dated 19.11.2019 passed u/s 143(3) of the Act. 4. Subsequently, on examination of the assessment order, the Ld. PCIT formed an opinion that failure the Assessing Officer to examine the taxability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2014- 15 order dated 26.08.2022. The Ld. AR submits that the issue is covered in favour of the appellant. In support of this proposition, Ld. AR relied on the following judicial precedents :- (i) Nashik Road Nagari Sahkari Patsanstha Limited vs. ITO (ITA No.1700/PUN/2017 dated 27.12.2021). (ii) Rena Sahakari Sakhar Karkhana Ltd. vs. Pr.CIT (ITA No.1249/PUN/2018 dated 07.01.2022). (iii) Shri Chandraprabhu Urban Co-operative Credit Society Ltd. vs. ITO (ITA No.61 62/PAN/2018 dated 10.05.2022). 8. Thus, it was contended that when the issue was stands covered and decided in favour of the assessee, then it cannot be said that the assessment order is erroneous as well as prejudicial to the interests of the revenue. 9. On the other hand, Ld. CIT-DR placing reliance on the order of the Ld. PCIT submits that failure of the Assessing Officer to examine the taxable income earned on the investments from cooperative bank rendered assessment order erroneous and prejudicial to the interests of the revenue. Therefore, he submits that the Ld. PCIT was justified in exercising the power of revision u/s 263 of the Act. 10. We heard the rival submissions and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of CIT vs. Punjab State Cooperative Federation of Housing Building Societies Ltd. 11 taxmann.com 448, the Hon ble Gujarat High Court in the case of State Bank of India Vs. CIT 389 ITR 578 (Guj.), the Hon ble Delhi High Court in the case of Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT 50 taxmann.com 278, the Hon ble Punjab Haryana High Court in the case of CIT Vs. Punjab State Cooperative Agricultural Development Bank Ltd. 389 ITR 68 and the Hon ble Kolkata High Court in the case of CIT Vs. Southern Eastern Employees Cooperative Credit Society Ltd. 390 ITR 524 took a view that the income arising on the surplus invested in short term deposits and securities cannot be attributed to the activities of the society and, therefore, not eligible for exemption u/s. 80P(2)(a)(i) of the Act. However, the Hon ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 taxmann 309 (Kar.) and the Hon ble Telangana and Hon ble Andhra Pradesh High Court in the case of Vaveru Co-operative Rural Bank Ltd. v CIT [(2017) 396 ITR took a view that such interest income is attributable to the activities of the society and, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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