TaxTMI 
TaxTMI 
2014 (3) TMI 329
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.... for the year under consideration was completed by the AO u/s 143(3) of the Act on 31.10.2011. On examination of assessment record, the Ld CIT noticed that the AO has granted deduction u/s 80P of the Act to the assessee without considering the amended provisions of sec. 80P(4) of the Act. Accordingly, the Ld CIT came to the conclusion that the impugned assessment order is erroneous and prejudicial to the interests of the revenue and hence he initiated revision proceedings u/s 263 of the Act. 3. The assessee contended before the Ld CIT that the provisions of sec. 80P(4) are not applicable to it, since it is only a credit co-operative society and not a co-operative bank. In this regard, it placed reliance on the following case law:- (a) ITO....
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....the contrary, the Ld D.R submitted that the AO has examined the applicability of provisions of sec. 80P(2) of the Act to the interest income earned by the assessee. He submitted that the AO did not examine the applicability of provisions of sec. 80P(4) of the Act to the facts of the assessee's case. Accordingly he submitted that the Ld CIT was justified in passing the impugned revision order. 5. We have heard the rival contentions and perused the record. The controversy revolves around sec. 80P(4) of the Act, which reads as under:- "80P(4) The provisions of this section shall not apply in relation to any cooperative bank other than primary agricultural credit society or a primary cooperative agricultural and rural development bank" A pla....
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....s provision has been interpreted by the Supreme Court in several judgments to which it is now necessary to turn. In Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, the Supreme Court held that the provision "cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer" and "it is only when an order is erroneous that the section will be attracted". The Supreme Court held that an incorrect assumption of fact or an incorrect application of law, will satisfy the requirement of the order being erroneous. An order passed in violation of the principles of natural justice or without application of mind, would be an order falling in that category. The expression "prejudicial to the interests of the Rev....
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....d to co-operative banks and fourth is related to section 80P(2)(c) which are not applicable in this case as the assessee is a co-operative credit society and not a co-operative bank." Thus, we notice that the assessing officer has taken a conscious view that the assessee herein is not a co-operative bank. As submitted by Ld A.R, the question of application of the provisions of sec. 80P(4) shall arise, only if the assessee herein is considered as a co-operative bank. The assessee has also pointed out before the Ld CIT that the view entertained by the assessing officer is one of the possible views by drawing support from the Tribunal decisions in the case of Jankalyan Nagri Sahakari Pat Sanstha Ltd (supra) and in the case of M/s Yeshwantpur C....