2021 (12) TMI 503

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.... provisions of section 263, for setting aside the order passed by the subordinate Assessing Officer and allowing deduction under section 80(P)(2)(d) of The Income Tax Act, 1961 Rs. 1069788/-. 2. The subordinate Assessing officer has verified the allowability of deduction under section 80(P)(2)(d) of The Income Tax Act, 1961 as the appellant is a Cooperative Housing Society registered under Registrar to the Society. The Interest received from another cooperative Society which was also registered under Registrar to the Society. Section 2(19) of The Income Tax Act, 1961 defines Co-Operative Societies: Section 2(19) "co-operative society" means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or....

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....ng enforced in any State for the registration of cooperative societies, therefore, the interest income derived by a co-operative society from its investments held with a cooperative bank, would be entitled for claim of deduction under section 80P(2)(d). 5. Each of the above grounds of appeal are independent and without prejudice to each other. 6. The appellant craves liberty to add, to alter and/or amend the grounds of appeal as and when given. 3. Brief facts of the case are that learned CPCIT in this case noted as under:- "The case was selected for limited scrutiny through "CASS" for the reason whether deduction under Chapter VIA has been claimed correctly. On verification of records, it is seen that the asses....

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....an order passed by the Officer is erroneous and prejudicial to the interests of the Revenue [K.A. Ramaswamy Chettiar v. CIT, (1996) 220 ITR 657, 665 (Mad) 1]. The above referred judgments are now explicit in the section itself and the judgments which state that once inquiry is made, the order is insulated from provision of s. 263 will no longer be applicable by virtue of Explanation 2 to Section 263 inserted w.e.f. 01-06-2015. I have gone through the assessment records and examined the submissions made by the assessee. After careful examination of the assessment records and reply of the assessee has came to the conclusion that the assessee has failed to discharge the onus as regards to the deduction claimed u/s. 80P(2)(d) of the Ac....

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....1 has decided as under by referring Hon'ble Supreme Court decsion on this issue as under :- "6. We have heard both the counsel and perused the records. We find that this issue is squarely covered in favour of the assessee by the decision of Hon'ble Supreme Court in the case of Citizen Cooperative Society Ltd. (Civil Appeal No. 10245 of 2017 vide order dated 8.8.2017) and The Mavilayi Service Cooperative Bank Ltd. & Ors. Vs. CIT, Calicut & Ors. (Civil Appeal Nos. 7343- 7350 of 2019 dated 12.1.2021. We find that the Assessing Officer has completely erred in treating the assessee as cooperative bank and invoking the provisions of section 80P(4). Section 80P(4) provides that :- (4) The provisions of this section shall ....

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....licut & Ors. (Civil Appeal Nos. 7343-7350 of 2019 dated 12.1.2021) and the issue was decided in favour of the assessee. We may gainfully refer to the Hon'ble Apex Court observation in para 21 as under, wherein the Hon'ble Apex Court referred to its earlier decision of Citizen Cooperative Society Ltd. (supra) :- "The following propositions may be culled out from the judgment: (I) That section 80P of the IT Act is a benevolent provision, which was enacted by Parliament in order to encourage and promote the growth of the co-operative sector generally in the economic life of the country and must, therefore, be read liberally and in favour of the assessee; (II) That once the assessee is entitled to avail of ded....