TaxTMI 
TaxTMI 
2023 (7) TMI 1042
X X X X Extracts X X X X
X X X X Extracts X X X X
....), by holding that the order passed u/s 143(3) r.w. -143(3A) & 143(3B) of the Act dtd. 27-01-2021 was erroneous in so far as it is prejudicial to the interest of the revenue and being unsustainable in law, is liable to be nullified or annulled in toto. 2. On the facts and in the circumstances of the case as well in law, the learned Pr. CIT, Surat-1, Surat erred in having assumed jurisdiction u/s 263 of the Act directing the AO to deny the deduction claimed u/s 80P(2)(d) of the Act, as allowed in the assessment order u/s 143(3) r.w. 143(3 A) & 143(3B) of the Act passed, after due inquiry and in-" depth verification of the relevant assessment records and therefore, the order u/s 263 of the Act passed by the Pr. CIT, Surat-1, Surat arbitrarily, prejudicially and subjectively on incorrect and inappropriate facts and figures, being without jurisdiction, bad in law, void ab initio, illegal and hence, is liable to struck down. 3. On the facts and in the circumstances of the case as well in law, the learned Pr. CIT has wrongly invoked the revision proceedings under Explanation 2(a)/(b) below Section 263 of the Act, solely on the basis of revenue audit objections, without examination of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ib) and the decision of Hon'ble Gujarat High Court in Surat Vankar Sahakari Sangh Ltd. Vs ACIT (2016) 72 taxmann.com 169 (Guj). 3. The ld. AR of the assessee submits that the assessee is a co-operative society and in the computation of income, the assessee claimed deduction under Section 80P(2)(d) of the Act of interest and dividend income earned from Surat District co-operative bank. The issue was extensively examined by the Assessing Officer during the assessment proceedings by issuing specific show cause notice under Section 142(1) dated 18/12/2020. In the said notice the Assessing Officer asked the assessee to furnish the details of interest and dividend income earned from other co-operative society about claim of deduction of Rs. 2.35 crores under Section 80P of the Act. The assessee furnished its reply dated 05/01/2021 giving complete details and explained that the assessee has earned interest income of Rs. 2.01 Crore from Surat District Co-operative Bank. The assessee also explained before the Assessing Officer that similar deduction was allowed in A.Y. 2015-16 and 2016-17, though return was processed under Section 143(1) of the Act for both the assessment years. In A.Y....
X X X X Extracts X X X X
X X X X Extracts X X X X
....other cooperative society, the word "Co-operative bank" is missing. The banks are governed by the Reserve Bank of India's Regulation and Cooperative Societies are governed by the Cooperative Societies Act of the State Government, thus both the entities are quite different. The ld. CIT(A) while setting aside the assessment order has given clear finding that the assessment order is erroneous in so far as prejudicial to the interests of revenue as the assessment order is completely silent on the issue. To support his submissions, the ld CIT-DR for the revenue relied on the decision of Hon'ble Supreme Court in Totagars Co-operative Sales Society Vs ITO (2010) 322 ITR 283 SC/ 188 Taxman 282. 6. In short rejoinder, the ld. AR of the assessee submits that in Bardoli Vibhag Gram Vikas Co-op Credit Society Ltd. Vs PCIT (supra), this Bench has considered all such similar submissions of ld. CIT-DR. The ld. AR of the assessee submits that the Hon'ble High Court in Surat Vankar Cooperative (supra) it was held that cooperative banks are primary a cooperative society and interest income earned on such cooperative banks are eligible for deduction under Section 80P(2)(d) of the Act. 7. We hav....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Assessing Officer passed assessment order on 18.10.2016. 12. The ld. PCIT before passing under section 263 of the Act, identified the issue regarding the claim of deduction under section 80P(2)(d) in its show cause notice dated 06.03.2019. The assessee in its reply dated 7.03.2019 clearly explained that the issue was examined by Assessing Officer and that the assessment order is not erroneous. The assessee also explained that similar disallowances /issues was subject matter in the appeal filed by the revenue before Tribunal in A.Y. 2009-10, 2010-11 and 2012-13 and the assessee was allowed similar deductions. 13. The Hon'ble Jurisdictional High Court in Aryan Arcade Ltd., vs PCIT (2019) 412 ITR 277 (Gujarat) held that merely because Commissioner held a different belief that would not permit him to take the order in revision, it if further held that when Assessing Officer made full enquiry, he made up his mind, the notice of revision is not valid. (emphasis added by us). Further, Hon'ble Madras High Court in CIT Vs Mepco Industries Ltd., (2007) 207 CTR 462 (Madras) held that when two views are possible on an issue and it is not the case of the Commissioner that the vie....