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TMI Blog2024 (2) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment proceedings had been initiated for examining the issues like Investments/Advances/Loans, Disallowance u/s. 40(9) (Contribution to Fund, etc.) and Disallowance u/s. 40A(7) (Gratuity provision), however, in the 263 proceedings, the PCIT sought to revise the assessment order on the ground of non-consideration of claim of deduction of interest under Section 80P of the Act. In our view, this is not permissible. It is not open to the PCIT, while exercising powers under Section 263 of the Act, to find fault with assessment order on the ground of it being erroneous on an issue not covered by the scope of limited scrutiny assessment, when the Assessing Officer could not have possibly examined such issue under limited scrutiny assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings under Section 263 on the ground that the assessee had shown interest income of Rs. 69,08,803/- in the return of income but as per the details submitted in the course of assessment proceedings, the interest income received from its members was Rs. 61,21,056/-. On this basis, the Ld. PCIT was of the view that the differential amount of Rs. 7,87,747/- was received from Co-operative bank which was not eligible for deduction under Section 80(2)(d) of the Act. Thereafter, the Id. PCIT has passed order under Section 263 setting aside the assessment order under Section 143(3) on the alleged ground that the deduction of Rs. 69,08,803/- claimed under Section 80P(2)(d) of the Act in respect of interest income wholly received from Co-opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nh Ajitsinh vs. PCIT in ITA No. 123/Rjt/2022 decision dated 24.02.2023 7. Further, without prejudice to the above explanation, it was also submitted that the ground of Ld. PCIT that interest income received from Co-operative Bank is not eligible for deduction under Section 80P(2)(d) of the Act is also legally not correct. This issue is already covered in favour of the appellant by virtue of the decision of the Hon'ble Rajkot ITAT wherein the revision under Section 263 was disapproved by the ITAT on the very same issue of deduction under Section 80P(2)(d) of the Act in respect of dividend income or interest income derived from the Co-operative Bank. Reliance was placed on the following judicial precedents in support of the contention: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of Section 80P(2)(d) on the income earned from investments with co-operative bank. 10. In view of the above judicial pronouncements, it was submitted that the order of the AO cannot be treated as erroneous and therefore, the Ld. PCIT could not have exercised the jurisdiction under Section 263 of the Act. Without prejudice to the above, it was also submitted that even if the contrary view of the Ld. PCIT is considered for a moment, it will be a case of debatable position having two possible legal views. Even in this situation, it will not be open for Ld. PCIT to exercise the jurisdiction under Section 263 of the Act as the AO has taken a plausible view in the matter which is not erroneous. The reliance placed on the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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