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TMI Blog2023 (9) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... on queries in scrutiny notices was and is on record based on which the issue of deduction under Chapter VI-A of the Act which includes Section 80P was examined. It was therefore not open for the Revenue to undertake the exercise of reassessment. Decided in favour of assessee. - HONOURABLE MR. JUSTICE BIREN VAISHNAV AND HONOURABLE MR. JUSTICE BHARGAV D. KARIA For the Appellant : MR MANISH J SHAH (1320) For the Respondent : MR. KARAN SANGHANI, LD. SENIOR STANDING COUNSEL for MR SKALPANA K RAVAL (1046) ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV) 1. RULE returnable forthwith. Mr. Karan Sanghani learned Senior Standing Counsel waives service of notice of Rule on behalf of the respondents. 2. With the consent of learned advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest income earned and as was suggested that the notice indicated that an amount of Rs. 1,33,11,637/- renewed from cooperative banks and claimed as deduction under Section 80P of the Act is not allowable. Mr. Shah would submit that based on the feedback of the assessee the issue on Section 80P should have been closed. The action of initiation of Section 148 proceedings was an attempt and nothing but a change of opinion. He would rely on a decision in the case of BHAGYODAYA CO-OP. BANK LTD. Versus ASST. COMMISSIONER OF INCOME CIRCLE 1(1)(1) OR HIS SUCCESSOR rendered in Special Civil Application No.17849 of 2021 dated 22.08.2023. 7. Mr. Karan Sanghani learned Senior Standing Counsel for the Revenue would submit that it was noticed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 80P, interest received from the Co- operative Bank is not eligible for deduction; therefore, the same should be disallowed and taxed accordingly. 3. Analysis of information collected/received: On perusal of return of income filed by the assessee for the year under consideration, it is observed that assessee had offered income of Rs. 3,44,90,840/- after claiming deduction u/s. 80P of the Act amounting to Rs. 5,06,10,523/- which includes an amount of Rs. 5,05,60,523/- as deduction u/s. 80P(2) (d) of the Act. Out of the claimed deduction u/s. 80P(2)(d) of the Act, interest of Rs. 3,59,26,098/- was received by the assessee from the Surat District Co-op Bank Ltd which is a co-operative bank and not a co-operative society. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(d) of the Act for the aggregate amount of Rs. 5,05,60,523/- as also u/s 80P(2)(c) of the Act for Rs. 50,000/-. 12. At page 34, the response also was specific. (12) The details of interest received from the Co.operative Bank/ Co.operative Society has already been furnished herewith in para (5) above. 13.The issue was a matter of scrutiny in the notice under Section 142(1) dated 21.12.2019. During the course of assessment proceedings, it is noticed that during the year under consideration, your society has earned total interest income of Rs. 1,33.11.637/- as under: Bank Of baroda : 30,164/- Bank Of India : 56,30,967/- Dena Bank : 110,2114/- SBI : 65,34,392/- and the same is claimed as deduction u/s. 80P(2)(d) of the I.T. Act. B. The plain r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 142(1) and responses thereto. The turnaround therefore was, in absence of any fresh tangible material, it was nothing but a mere change of opinion. This Court in the case of BHAGYODAYA CO-OP. BANK LTD. (supra) has on this question held as under: 6. Having heard the learned advocates for the respective parties, having considered the material available on record and on perusal of the reasons recorded for the issuance of notice under Section 148 of the Act, 1961, it is apparent that there is no new fresh material available with the respondent nor there is any live link shown by the respondent with the material on record for formation of reasonable belief to reopen the assessment within the period of four years. The respondent has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer was misguided on wrong facts. Indications and facts would indicate that in that case the Court found that on bare appreciation of the audit report, it was found that the assessee had conveniently mentioned under the head of deduction by referring to Section 80P which gave an impression that the assessee had derived an impression that the assessee had derived interest from its own members. The Assessing Officer had therefore made no conscious attempt to examine the issue on misguided facts. The case on facts is clearly distinguished. Here a full and true disclosure based on queries in scrutiny notices was and is on record based on which the issue of deduction under Chapter VI-A of the Act which includes Section 80P was ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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