Tribunal recalls orders for A.Y. 2011-12, 2012-13, & 2014-15. Re-adjudicates deduction issue under section 80P(2)(d).

The Tribunal allowed the miscellaneous applications filed by the Revenue, recalling earlier orders for A.Y. 2011-12, 2012-13, and 2014-15 for limited purposes. The Tribunal will re-adjudicate the matter concerning the quantum of deduction under section 80P(2)(d) to determine whether it should be allowed on gross or net interest income, considering the Rajasthan High Court's decision. Additionally, legal grounds challenging the validity of proceedings under section 147 will be reconsidered.

---

---

Issues Involved:
1. Eligibility for deduction under section 80P(2)(d) of the Income Tax Act, 1961.
2. Calculation of deduction under section 80P(2)(d) on gross vs. net interest income.
3. Validity of the proceedings under section 147 of the Income Tax Act, 1961.

Issue-Wise Detailed Analysis:

1. Eligibility for Deduction under Section 80P(2)(d):

A.Y. 2011-12 & 2012-13:
- The Tribunal initially held that for the purposes of section 80P(2)(d) of the Act, Jaipur Central Cooperative Bank Ltd shall be treated as a cooperative society. Therefore, interest on FDRs placed by the assessee society with such cooperative society shall be eligible for deduction under section 80P(2)(d).

A.Y. 2014-15:
- The Tribunal followed its earlier decision for A.Y. 2011-12 and 2012-13, allowing the deduction under section 80P(2)(d) for interest received from investments with Jaipur Central Cooperative Bank.

2. Calculation of Deduction under Section 80P(2)(d) on Gross vs. Net Interest Income:

A.Y. 2011-12 & 2012-13:
- The Tribunal initially decided that the deduction under section 80P(2)(d) should be allowed on the gross interest income, following the Gujarat High Court's decision in Surat Vankar Sahakari Sangh Ltd vs ACIT.

A.Y. 2014-15:
- The Tribunal again followed its earlier decision to allow the deduction on gross interest income, despite being aware of the Rajasthan High Court decision in CIT vs. Rajasthan Rajya Sahakari Upbhokta Sangh Ltd, which mandates deduction on net interest income.

A.Y. 2016-17:
- The Tribunal reconsidered and followed the Rajasthan High Court decision, stating that the deduction under section 80P(2)(d) should be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income.

Miscellaneous Applications:
- The Revenue filed miscellaneous applications arguing that the Tribunal's earlier decisions for A.Y. 2011-12, 2012-13, and 2014-15 did not consider the Rajasthan High Court's binding decision, thus constituting a mistake apparent from the record. The Tribunal agreed, noting that the earlier decisions need rectification to align with the jurisdictional High Court's ruling.

3. Validity of Proceedings under Section 147:

A.Y. 2011-12 & 2012-13:
- The Tribunal dismissed the legal grounds challenging the validity of proceedings under section 147 as infructuous because the matter was decided on merits. However, if the miscellaneous applications by the Revenue are allowed, these legal grounds should also be recalled and decided independently.

Conclusion:

The Tribunal allowed the miscellaneous applications filed by the Revenue, recalling the earlier orders for A.Y. 2011-12, 2012-13, and 2014-15 for limited purposes. The Tribunal will re-adjudicate the matter concerning the quantum of deduction under section 80P(2)(d) to determine whether it should be allowed on gross or net interest income, taking into consideration the Rajasthan High Court's decision. Additionally, the legal grounds challenging the validity of proceedings under section 147 will also be reconsidered.

---