Tribunal grants appeals, directs deductions under Section 80P(2)(d)

The Tribunal allowed the appeals filed by the assessee, setting aside the orders passed by the CIT(A) for the relevant assessment years. It directed the Assessing Officer to grant the deductions claimed under Section 80P(2)(d) after verifying the facts. The Tribunal found procedural lapses, including the failure to provide opportunities to counter assertions and to be heard through virtual or personal modes. It also highlighted the need for speaking orders and concluded that the determination of tax liability and levying of interest under Sections 234B and 234C required reassessment.

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Issues Involved:
1. Opportunity to counter assertions by CIT(A) not granted.
2. Opportunity of being heard through virtual or personal mode not granted.
3. Order of CIT(A) not a speaking order.
4. CPC superseded power under Section 143(1)(a).
5. Disallowance of deduction under Section 80P(2)(d) without valid reason.
6. Addition made on account of disallowance of Section 80P(2)(d) deduction.
7. Determination of tax liability is bad in law.
8. Levying interest under Sections 234B and 234C is void ab initio.

Detailed Analysis:

1. Opportunity to Counter Assertions by CIT(A) Not Granted:
The assessee society argued that the CIT(A) did not provide an opportunity to counter the assertion that SVC Cooperative Bank Ltd is a bank and not a cooperative society, which was a key point in the CIT(A)'s decision. The Tribunal noted that the CIT(A) had made this assertion without allowing the assessee to present counterarguments or consider judicial pronouncements submitted by the assessee.

2. Opportunity of Being Heard Through Virtual or Personal Mode Not Granted:
The assessee contended that despite requesting a hearing through virtual or personal mode, the CIT(A) did not grant this opportunity, violating the Faceless Appeal Assessment Scheme. The Tribunal found this to be a procedural lapse, as the assessee's request for a hearing was ignored.

3. Order of CIT(A) Not a Speaking Order:
The assessee claimed that the CIT(A)'s order was not a speaking order, as it did not address the arguments, assertions, legal provisions, and case laws quoted in the written submission. The Tribunal agreed that the CIT(A)'s order lacked detailed reasoning and failed to consider the assessee's submissions.

4. CPC Superseded Power Under Section 143(1)(a):
The assessee argued that the Central Processing Centre (CPC) of the Income Tax Department erred in disallowing the deduction claimed under Section 80P(2)(d) without authority, as the adjustment did not fall within the six categorized situations under Section 143(1)(a). The Tribunal found merit in this argument, noting that the CPC's action was beyond its conferred powers.

5. Disallowance of Deduction Under Section 80P(2)(d) Without Valid Reason:
The assessee contended that the CPC disallowed the deduction under Section 80P(2)(d) without providing any valid reason, making the intimation order not a speaking order and violating natural justice. The Tribunal agreed, emphasizing the need for a reasoned order.

6. Addition Made on Account of Disallowance of Section 80P(2)(d) Deduction:
The primary issue was whether the assessee society was entitled to a deduction under Section 80P(2)(d) for interest income from fixed deposits with SVC Cooperative Bank Ltd. The Tribunal referred to previous decisions, including those of the Karnataka and Gujarat High Courts, which held that interest income from cooperative banks qualifies for the deduction. The Tribunal concluded that the assessee was entitled to the deduction as SVC Cooperative Bank Ltd is a cooperative society.

7. Determination of Tax Liability is Bad in Law:
The assessee argued that the determined tax liability of Rs. 5,45,267/- was incorrect and contrary to the facts and provisions of the Act. The Tribunal, considering the allowed deduction under Section 80P(2)(d), directed the Assessing Officer to reassess the tax liability.

8. Levying Interest Under Sections 234B and 234C is Void Ab Initio:
The assessee contended that the interest levied under Sections 234B and 234C was incorrect. The Tribunal, in light of the allowed deduction and reassessment of tax liability, found that the interest calculations needed to be revisited.

Conclusion:
The Tribunal set aside the impugned orders passed by the CIT(A) for the relevant assessment years and directed the Assessing Officer to grant the deductions claimed under Section 80P(2)(d) after verifying the facts. The appeals filed by the assessee were allowed, and the order was pronounced in open court on 01st November 2022.

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