TaxTMI 
TaxTMI 
2023 (7) TMI 1153
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.... the order u/s 263 be quashed and set aside for this reason. 2. The Id Pr. CIT erred in holding the order framed by the assessing officer u/s 143(3) of the I. Tax Act on 09.03.2021 to be erroneous and prejudicial to the interest of revenue as per section 263 of the I.T Act, 1961 and accordingly the assumption of jurisdiction by the Pr. CIT u/s 263 of the I.T Act, 1961 was not valid and justified. 3. The Id Pr. CIT erred in setting aside to the AO, the assessment for A.Y. 2018-19 framed u/s 143(3) on 09.03.2021, with a direction to disallow the entire amount of Rs. 79,90,593/- claimed u/s 80P(2), holding that the appellant was not entitled to the said deduction. 4. The Id Pr. CIT erred in not appreciating that the appellant was entitled for deduction u/s 80P(2)(a)(i) of the I.T. Act 1961, in respect of Rs. 79,90,593/- being income arising from its business of banking carried on with its members and therefore deduction u/s 80P(2)(a)(i) was fully allowable. 5. The Id Pr. CIT further erred in not appreciating that the appellant was also entitled for deduction u/s 80P(2)(d) of the I.T. Act 1961, in respect of Rs. 79,90,593/- being interest income earned from investments in co-op....
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.... 2,007-08, 2008-09 & 2009-10 and also for 2017-18 in ITA Nos 5185/Mum/2012 & 1186/Mum/2012 order dated 01/01/2016, ITA No.1935/Mum/2014 order dated 10/09/2015 & ITA No.2834/M/2022 order dated 17/01/2023, respectively. He further submitted that a co-operative bank is a co-operative society holding a banking licence issued by RBI. For this proposition, he relied on the judgement of the Hon'ble Supreme Court in the case of The Mavilayi Service Co Operative Bank Ltd & Ors vs CIT 431 ITR 1 (SC)(2001). The Ld.DR relied on the order of the PCIT. 5. Undisputedly, assessee has invested its surplus fund with co-operative bank and earned the interest income of Rs. 1,28,41,962/-, part of which the assessee claimed as a deduction under section 80P(2)(d) of the Act. The PCIT held that the interest earned by the assessee from investments with cooperative banks are not eligible for deduction under section 80P(2)(d) by relying upon the decision rendered by Hon'ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd (supra). In this regard we notice that this issue is no longer res integra having been decided in favour of the assessee by the co-ordinate bench of Tribunal in case of P....
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....ITO [IT Appeal No. 549/MUM/2021] 2. Solitaire CHS Ltd. v. Pr. CIT [IT Appeal No. 3155/Mum/2019, dated 29-11-2019] 3. Jai Hind Co-operative Housing Society Ltd. v. ACIT [IT Appeal Nos. 1762 & 1763/Mum/2020] 4. Vadasinor Pragati Samaj Co-operative Credit Society Ltd. v. Pr. CIT [IT Appeal No. 2539/Mum/2019] 5. Doshi Palace Co-operative Housing Society Ltd. v. ACIT [IT Appeal No. 2510/MUM/2019] 6. Salsette Catholic Co-operative Housing Ltd. v. ACIT [IT Appeal Nos. 3870 & 3871/Mum/2019] These decisions of the co-ordinate benches have reiterated the principle that the interest income derived by a co-operative society by way of investment made with a co-operative bank would be entitled to claim of deduction under section 80P(2)(d) of the Act. For this proposition, we would like to place our reliance on the decision of Petit Towers Co-op. Housing Society Ltd.'s case (supra) wherein the co-ordinate bench has observed as under:- 8. We have given a thoughtful consideration to the contentions advanced by the ld. Authorized representatives for both the parties in context of the aforesaid issue under consideration. As stated by the ld. A.R, and rightly so, the issue that inter....
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.....04.2007. On a perusal of the order passed by the Pr. CIT under Sec. 263 of the Act, we find, that he was of the view that pursuant to insertion of sub-section (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2)(d) in respect of the interest income that was earned on the amounts which were parked as investments/deposits with co-operative banks, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. Observing, that the co-operative banks from where the assessee was in receipt of interest income were not co-operative societies, the Pr. CIT was of the view that the interest income earned on such investments/deposits would not be eligible for deduction under Sec. 80P(2)(d) of the Act. 7. After necessary deliberations, we are unable to persuade ourselves to be in agreement with the view taken by the Pr. CIT. Before proceeding any further, we may herein reproduce the relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. "80P(2)(d) (1). Where in the case of an assessee being a c....
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....ciety registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of co-operative societies;" We are of the considered view, that though the co-operative banks pursuant to the insertion of subsection (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. 8. We shall now advert to the judicial pronouncements that have been relied upon by the ld. A.R. We find that the issue that a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income derived from its investments held with a co-operative bank is covered in favour of the assessee in the following cases: (i) Land and Cooperative....
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....arned by a co-operative society on its investments held with a cooperative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. We find that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. Vs. Siemens India Ltd. and Anr (1985) 156 ITR 11 (Bom), where there is a conflict between the decisions of non-jurisdictional High Court's, then a view which is in favour of the assessee is to be preferred as against that taken against him. Accordingly, taking support from the aforesaid judicial pronouncement of the Hon"ble High Court of jurisdiction, we respectfully follow the view taken by the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon"ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), wherein it was observed that the interest income earned by a cooperative society on its investments held with a cooperative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. 9. Be that as it may, in our considered view, as the A.O while framing the assessment had....