TaxTMI 
TaxTMI 
2023 (8) TMI 916
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....ed u/s. 271B of the Act 2 109 /RPR/2022 2013-14 24.03.2022 26.09.2016 3 110/RPR/2022 2014-15 24.03.2022 23.06.2017 4 111/RPR/2022 2011-12 31.03.2022 24.03.2014 5 112/RPR/2022 2012-13 31.03.2022 20.03.2015 6 113/RPR/2022 2016-17 31.03.2022 26.09.2018 Disallowance u/s. 80P of the Act 7 116/RPR/2022 2017-18 27.04.2022 25.11.2019 8 117/RPR/2022 2012-13 25.03.2022 23.03.2015 9 118/RPR/2022 2012-13 25.03.2022 09.09.2015 10 125/RPR/2022 2012-13 18.04.2022 09.09.2015 11 126/RPR/2022 2013-14 21.03.2022 02.05.2016 2. The issues involved in the present appeals are pertaining to levy of penalty u/s. 271B of the Income Tax Act, 1961 (in short "the Act"), and disallowance u/s. 80P of the Act. First, we are taking the appeals having common issue pertaining to levy of penalty u/s. 271B of the Act. ITA Nos. 108, 109, 110, 118, 125 & 126/RPR/2022: 3. We shall take up the appeal in ITA No. 108/RPR/2022 for the AY 2012-13 as the lead matter, and the order therein passed, shall be applied mutatis-mutandis to the remaining appeals i.e. ITA Nos.....
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....e where such person is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this section if such person gets the accounts of such business or profession audited under such law before the specified date and furnishes by that date the report of the audit as required under such other law and a further report by an account in the form prescribed under this section. Explanation- For the purpose of this section- ii. "specified date", in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the due date for furnishing the return of income under sub-section (1) of Section 139." By virtue of the proviso as above, respondent was not required to have one more audit to be conducted in addition to the audit to be conducted by the Registrar in terms of the Chhattisgarh Cooperative Societies Act, 1960. However, by reason of the mandate contained in section 44AB, such auditing was required to be conducted before the specified date and the auditor was required to sign and verify the audit report on or before the specified date. The same was not done. It was do....
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....he satisfaction, penalty u/s. 271B of the Act, was levied for Rs. 1,50,000/- i.e. (i) ½ percent of gross-receipts of the business of the assessee's society which was Rs. 4,73,623/- ( ½ percent of Rs. 8,47,34,616/- ) or (ii) Rs. 1,50,000/- whichever is less. Aggrieved with the penalty imposed by the Ld.AO considering the submissions of the assessee, alleging that there was no reasonable cause in delaying the completion of audit u/s. 44AB of the Act, assessee preferred an appeal before the Ld.CIT(A), NFAC. However, since the assessee was found to be non-compliant before the Ld.CIT(A). Therefore, the appeal of the assessee was dismissed. 6. Being the aggrieved with the order of the Ld.CIT(A), the assessee has carried the matter before us. 7. At the beginning of the hearing, it was pointed out by the Registry that the appeal of the assessee is delayed by 124 days, for which, an affidavit was submitted by Shri Neelkant Sahoo, Manager of the Co-operative Society, stating that the assessee's society is situated in a remote village viz., Belar having population of about 1200, the assessee is a Primary Agricultural Co-operative Society and he is working of benefit of far....
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.... may be prescribed (Form No. 3CD). IV. that without giving due regards to the reasonable cause shown by the assessee society with supporting documents for delay in getting books of account audited for the F.Y. 2011/12 and to furnish the audit reports and audited financial statement on or before the specified date mentioned in section 44AB during the course of penalty proceeding u/s. 271B for the A.Y. 2012/13, AO has levied penalty u/s. 27IB of Rs. 1,50,000/-. On first appeal, CIT (Appeals) has upheld the said action of the AO. 2. Assessee society's submissions before hon'ble ITAT: - That your honour authority for appointment of statutory auditor of the assessee society for the F.Y. 2011/12 was lying with "Registrar of Co-operative Societies", therefore, assessee society had no control over to get the books of account audited from statutory auditor within specified time mentioned in section 44AB, which ultimately results in delay in getting tax audit report u/s. 44AB in Form No. 3CA & statement of particulars required to be furnished u/s. 44AB in Form No. 3CD from the tax auditor. That since statutory auditor had given audit certificate for the F.Y....
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....he written submissions of the assessee, it is observed that the Audit Certificate by the Auditor of Co-operative Society which was issued after the due date for completion and submission of the same i.e. on 20.02.2013, (copy of the same was furnished at Page No. 22 of the Written Submissions of the assessee), whereas, the due date for completion of the audit as per the provisions of sec. 44AB of the Act, was 30.09.2012. It was the submission of the assessee that without giving due consideration to the reasonable cause shown by the assessee society with supporting documents in getting books of accounts audited for the Financial Year 2011-12 relevant to AY 2012-13, the penalty levied by the Ld.AO and confirmed by the Ld.CIT(A) was bad in law. The assessee also relied upon the order of the ITAT Raipur in ITA No. 19/RPR/2022, wherein, the issue in the present appeal was discussed and is squarely covered by the said order. Observations of the ITAT in the said order were as under: 8. We have considered the rival contentions and perused the orders of the authorities below along with the relevant documents placed on record. Before us, the ld. AR of the assessee has filed paper boo....
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....he audit report. It is also an admitted fact that the audit report was available before the AO, when the assessment was done. This being so, we are of the view that it is a fit case for deletion of penalty u/s. 271B of the Act. Consequently, the penalty levied by the AO u/s. 271B of the Act and confirmed by the ld CIT(A) stands deleted. ii) M/s TPD 101 Uthangarai Mil Producers Co-operative Society Ltd., ITA No. 152/Chny/2021, order dated 29.06.2022, wherein it is held as under :- 7. We have heard both the parties and perused the materials available on record and gone through the orders of the authorities below. The assessee supposed to have been filed audit report as required u/s. 44AB of the Act, on or before 31.10.2015. However, such audit report has been filed on 05.03.2016, which is before the date of completion of assessment proceedings u/s. 143(3) of the Act. In other words, although the assessee has filed tax audit report beyond the stipulated period, but such tax audit report was made available to the AO before he completes assessment proceedings. The assessee has given reasons for delay in filing tax audit report. As per which, the audit of accounts of so....
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....ort was beyond the control of assessee. The relevant portion para no-4 of said order dated 03- 06-2016 in the case of supra is reproduced herein below for useful reading: 4. We have heard both the sides and also perused the relevant material available on record. As submitted on behalf of the assessee before the authorities below as well as before us, its failure to obtain and furnish the tax audit report by the specified date of 30.09.2009 as per the requirement of section 44AB was due to delay in completion of statutory audit by the auditors appointed by the Cooperative Department. Since the statutory auditor under the Cooperative Act was to be appointed by the Cooperative Department and such appointment as well as conduct and completion of audit by the statutory auditor was beyond the control of the assessee, we find merit in the contention of the Id. counsel of the assessee that the delay in completion of statutory audit, which caused the failure of the assessee to obtain and furnish the tax audit report under section 4AB, was due to the reasons beyond the control of the assessee and the same constituted the sufficient cause for its failure to comply with the requiremen....
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.... control or authority over such auditors. It is settled law that penalty is to be imposed for defiance of law or for not carrying out a statutory obligation. It cannot be imposed on the assessee for non-performance of duties by public agencies like Government auditors. The assessee right from beginning contended that delay is attributable to late auditing done by the statutory auditors. For the act of statutory auditor, the assessee cannot be held to be responsible under a provision like section 271B. It has been a settled law since the decision of Hindustan Steel Ltd. v. State Of Orissa. [1972] 83 ITR 26 (SC) that the levy of penalty is discretionary and penalty is not to be imposed for technical or venial breach of a statutory provision. In the present case, statutory audit was completed only on 17-1-1990. The auditors raised some points in the audit report which were required to be looked into and complied with by the assessee. After complying with the various points the assessee submitted return on 26-2-1990. It is not a case in which the assessee did not take proper care to comply with various statutory provisions. No default is attributable to the act and conduct of the asses....
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....e Hon'ble Supreme Court has held as under :- Section 270 of the Income-tax Act, 1961 - Penalty - General - Penalty is not to be imposed if there is no conscious breach of law An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or guilty of conduct, contumacious or dishonest, or acted in conscious disregard to its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. 14. On perusal of the ratio of law emerged in the aforesaid or....
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....f appointment letter of the statutory/tax auditor are missing although in cases were written submission were made, copy certificate of the auditor and tax audit report were furnished, which inspires our confidence in the submissions of the assessee that there was sufficient reasons by which the assessee was prevented to get its accounts audit before the prescribed due date u/s 44AB, thus, in the interest of natural justice, we find it appropriate to grant one more opportunity to assessee to get these facts furnished before the Ld AO to decide the issue in terms of our observations herein above. 18. The second set of appeals (ITA Nos. 109 ,110, 126/RPR/2022) for which there was no representation or written submission by the assessee, there was no justification by the assessee on reasonableness of the delay in completion of the audit, however, since we are sending the first set of appeals to the files of AO, we consider it suitable to remit the second set of appeals also to the files of the Ld.AO to re-adjudicate the same afresh after hearing the assessee. The assessee is directed in all above appeals to furnish requisite documents, evidence, and information, before the Ld.AO to d....
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....ductible u/s. 80P(2)(d) and delete the addition. 21. Briefly, the facts in the present case are that the assessee is a Primary Agricultural Cooperative Society engaged in carrying out business of banking, paddy procurement, sale of fertilizers, seeds, manures, and pesticides and of control items under Public Distribution System. The assessee filed its return of income on 24.03.2013 for the AY 2011-12 declaring a total income as 'NIL'. The assessee society has claimed 100% deduction of income from all the activities claiming that it is covered by the provisions of sec. 80P of the Act. The Ld.AO was not found satisfied with the explanations submitted by the assessee with respect to its entitlement to qualify for deduction u/s. 80P of the Act, has made certain additions u/s. 80P of the Act. 22. Aggrieved with the order u/s. 143(3) of the Act, passed by the AO, the assessee preferred an appeal before the Ld.CIT(A), NFAC. However, the submissions made by the assessee before the Ld.CIT(A) were found part favour and therefore, Ld.CIT(A) has disposed off the grounds of appeal with part relief to the assessee by remitting certain issues back for verification to the AO. 23. Being ag....
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.... further erred in not allowing deduction of income from interest from banking business u/s 80P(2)(a)(i) amounting to Rs. 18,25,283/- by confirming the order of the Ld.AO. Prayed that appellant is eligible for deduction of above sum under the above section which kindly be allowed. That one of the activity of the assessee society is carrying on banking business like borrowing, raising or taking up money and lending or advancing money for the purpose of agriculture activities, sale and purchase of seeds and urea to it's members. The source of income of assessee society from banking business is interest on loan advanced to it's members and interest on deposits of surplus funds, where there were no takers, in co-operative bank. That during the year under consideration, the assessee society had parked surplus funds, which were not immediately required by the assessee society for lending money to the members as there were no takers, in the form of deposit with Jila Sahakari Bank, i.e. a co-operative bank, to earn interest and earned interest thereon to the tune of Rs. 18,25,283/-. That since said interest was earned in the normal course of its business of providi....
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....d rightly so, the Tribunal in the case of Gramin Sewa Sahakari Samiti Maryadit & Ors Vs. the ITO, Ward-1(3), Raipur in ITA No. 114/RPR/2016 & Ors., dated 23.02.2022 had after drawing support from the judgment of the Hon'ble High Court of Karnataka in the case of Tumkur Merchants Souharda Cooperative Ltd., ITA No. 307/2014, dated 28.10.2014, had after exhaustive deliberations concluded that the interest income earned on the surplus funds which were parked as deposits by the co-operative society in the normal course of its business of providing credit facilities to its members, i.e., at a point of time when there were no takers for the said funds was duly entitled for deduction under Sec. 80P(2)(a)(i) of the Act........ (Page No. 9 of the ITAT order) ......... As stated by the Ld. AR, as the facts and the issue involved in the present appeal i.e, allowability of the assessee's claim for deduction under Sec. 80P(2)(a)(i) on the interest on bank deposits remains the same as were there in the aforesaid case i.e, ITA No. 114/RPR/2016 & Ors (supra.), therefore, we respectfully follow the same. We, thus, in terms of our aforesaid observations direct the AO to allow the ass....
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....rmining as to what extent the assessee society had facilitated the marketing of the agricultural produce grown by non-members, therein, restrict the assessee's claim for deduction u/s. 80P(2)(a)(iii) of the Act only to the extent of the profit relatable thereto. Needless to say, the assessee shall in the course of the set-aside proceedings furnish the requisite details/documents that are called for by the A.O. The Ground of appeal No. 2 is allowed for statistical purposes in terms of our aforesaid observations." Ground No. 4 :- That under the facts and the law, the Ld CIT (Appeals) erred in treating the surplus of PDS business amounting to Rs. 1,70,480/- without allowing proportionate expenses of Rs. 3,06,046/- as ineligible for deduction u/s 80P(2). Prayed that the exemption u/s 80P(2) be allowed and the addition be deleted. The assessee society had undertaken PDS activity during the year i.e. distribution of essential commodities to the ration card holders through fair price shop, and a surplus of Rs. 1,70,480/- was earned on the same. The assessee society has claimed deduction u/s 80P(2) of the Income-tax Act' 1961 on the entire amount of such ....
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.... That under the facts and the law, the Ld CIT (Appeals) erred in treating the dividend income amounting to Rs. 36,816/- as ineligible for deduction u/s 80P(2). Prayed that the dividend income is deductible u/s 80P(2)(d) and delete the addition. The assessee society had earned dividend income amounting to Rs. 36,816/- on shares of Jila Sahakari Bank and had claimed deduction u/s 80P(2) of the Income-tax Act' 1961 on the entire amount of dividend. The AO has observed that Jila Sahakari Bank is not a co-operative society, therefore, dividend income earned on such shares of the bank could not be allowed as deduction u/s 80P(2) of the Act and accordingly, he has disallowed deduction u/s 80P(2) on amount of dividend of Rs. 36,816/- claimed by the assessee society. On first appeal, CIT (Appeals) has upheld the said action of the AO. That your honour aforesaid ground of appeal is duly covered in favour of the assessee society by the decision of divisional bench of Hon'ble ITAT, Raipur dt. 04.08.2022 in 22 cases of Gramin Sewa Sahakari Samiti Maryadit (Co-operative society) by taking appeal in ITA No. 126/RPR/2017 for the A.Y. 2014/15 as the lead matter....
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.... the present appeal were discussed and decided, therefore, the issues in the present appeals are squarely covered by the said order. 28. The Ld.DR, on the other hand, conceded to the submissions by the assessee. 29. We have considered the rival contentions, perused the orders of the lower authorities and material available on record. On perusal of the order of the Tribunal in ITA No. 126/RPR/2017 & others (supra), which were relied upon by the assessee in its written submissions in support of its contentions. With respect to Ground No. 1 wherein it was the grievance of the assessee that the Ld.CIT(A), NFAC, has passed an order u/s. 250 ex-parte without allowing the opportunity to the assessee prayer that the notice issued Ld.CIT(A) did not come to the knowledge of the assessee the assessee is doing business in the remote village viz. Bitkuli, Hathband, in the district of Baloda Bazar, Chhattisgarh, not well versed with the electronic medium. On Ground No. 1 of the assessee's appeal, we agreed with the contentions of the assessee that the matter should be adjudicated on merits, and therefore, we are adverting to other grounds of this appeal, accordingly, Ground No. 1 becomes a....
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....) in the case of a co-operative society engaged in- (i). carrying on the business of banking or providing credit facilities to its members, or (ii) to (iii)...................................................................................." (Emphasis by underlining supplied by us) On a perusal of the aforesaid statutory provision, we find that the same, contemplates, that the income of a co-operative society from its business of banking or providing credit facilities to its members is eligible for deduction u/s. 80P(2)(a)(i) of the Act. Our indulgence in the present appeal is confined to the limited aspect, i.e, as to whether or not the interest income earned by the assessee-society by depositing its surplus funds with a bank can be brought within the meaning of "income from carrying on the business of banking or providing credit facilities to its members", and thus, would fall within the realm of the deduction contemplated in Section 80P(2)(a)(i) of the Act. At this stage, we may herein observe, that it is the claim of the assessee, that as depositing of its surplus funds, i.e, the funds for which there were no takers at the relevant point of time, in t....
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....en, the interest income therein earned to the said extent could not be said to be attributable to its activity of providing credit facilities to its members. As is discernible from the aforesaid judicial pronouncement of the Hon'ble Supreme Court, we find the Hon'ble Apex Court had clarified beyond doubt that they have confined the judgment to the facts of the case before them, and the same was not to be considered as laying down of any law. Be that as it may, the aforesaid judgment of the Hon'ble Supreme Court in the case of M/s. Totgars Co-operative Sale Society Ltd. (supra) had thereafter been considered by the Hon'ble High Court of Karnataka in the case of Tumkur Merchants Souharda Cooperative Ltd. (supra) in ITA No. 307/2014, dated 28.10.2014, wherein the Hon'ble High Court had after exhaustive deliberations held as under : "6. From the aforesaid facts and rival contentions, the undisputed facts which emerges is, the sum of Rs. 1,77,305/- represents the interest earned from short term deposits and from savings bank account. The assessee is a cooperative society providing credit facilities to its members. It is not carrying on any other business. The interest income ea....
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....d from the conduct of the business of generation and distribution of electricity. In this connection it may be pointed out that whenever the Legislature wanted to give a restricted meaning in the manner suggested by the learned Solicitor General it has used the expression "derived from", as for instance in s. 80J. In our view since the expression of wider import, namely, "attributable to" has been used, the Legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity. 8. Therefore, the word "attributable to" is certainly wider in import than the expression "derived from". Whenever the legislature wanted to give a restricted meaning, they have used the expression "derived from". The expression "attributable to" being of wider import, the said expression is used by the legislature whenever they intended to gather receipts from sources other than the actual conduct of the business. A cooperative society which is carrying on the business providing credit facilities to its members, earns profit and gains of business by providing credit facilities to its members. The interest income so derived or ....
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....as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore, it is liable to be deducted in terms of section 80P(1) of the Act. In fact similar view is taken by the Andhra Pradesh High Court in the case of COMMISSIONER OF INCOME TAX III HYDERABAD VS. ANDHRA PRADESH STATE COOPERATIVE BANK LTD. Reported in (2011) 200 TAXMAN 220/12. In that view of the matter, the order passed by the appellate authorities denying the benefit of deduction of the aforesaid amount is unsustainable in law. Accordingly, it is hereby set aside. The substantial question of law is answered in favour of the assessee and against the revenue. Hence, we pass the following order: Appeal is allowed. The impugned order is hereby set aside. Parties to bear their own cost." In the backdrop of the aforesaid observations of the Hon'ble High Court, we are of a considered view, that as in the case of the assessee before us the surplus funds parked by way of short-term deposit with the co-operative bank, viz. Jila Sahakari Kendriya Bank are inextricably interlinked, or in fact interwoven with its business of providing credit facilities to its....
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....vernment. The gross profit of Rs. 16,21,218/- that was earned by the assessee from its aforesaid stream of business activity, i.e., paddy procurement business was claimed by it as a deduction u/s. 80P(2)(a)(iii) of the Act. However, as per the mandate of Sec. 80P(2)(a)(iii) the deduction therein contemplated was only available qua the marketing of the agricultural produce grown by members of the society, therefore, the Assessing Officer in the course of assessment proceedings had called upon the assessee society to produce the register maintained in respect of its paddy procurement for the year under consideration. As the register produced by the assessee society did not reveal the requisite details which were required to identify the members and non-members, therefore, the Assessing Officer in the backdrop of the said fact had restricted the assessee's claim for deduction u/s. 80P(2)(a)(iii) of the Act on an adhoc basis to 35% (i.e. nearly 1/3rd of the aforesaid gross profit) of the profit that was earned by it from paddy procurement business, and had disallowed assessee's claim for deduction as regards the balance amount of profit. Assailing the restriction of the assessee's clai....
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.... by the assessee before us. The A.O shall after determining as to what extent the assessee society had facilitated the marketing of the agricultural produce grown by non-members, therein, restrict the assessee's claim for deduction u/s. 80P(2)(a)(iii) of the Act only to the extent of the profit relatable thereto. Needless to say, the assessee shall in the course of the set-aside proceedings furnish the requisite details/documents that are called for by the A.O. The Ground of appeal No. 2 is allowed for statistical purposes in terms of our aforesaid observations." Considering the parity of the facts involved in the present case as against those which were involved in ITA No. 114/RPR/2016 & Ors., dated 23.02.2022, we are of the considered view that as stated by the Ld. AR, and rightly so, the assessee society in the present case was principally entitled for deduction of its income from the business of paddy procurement u/s. 80P(2)(a)(iii) of the Act. However, as observed by us while disposing off the appeals in ITA Nos. 114/RPR/2016 & Ors (supra), the claim of deduction of the assessee society would be limited to the extent it had facilitated the marketing of the agricultura....
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....ely covered by the order of the ITAT in ITA No. 126/RPR/2017 & Others (supra), wherein the observation of the Tribunal are as under: 18. We have given a thoughtful consideration to the aforesaid issue in the backdrop of the contentions advanced by the ld. Authorised Representatives of both the parties. As stated by the ld. AR, and rightly so, the Tribunal in the case of Gramin Sewa Sahakari Samiti Maryadit & Ors Vs. ITO, Ward-1(3), Raipur in ITA No. 114/RPR/2016 & Ors., vide its order dated 23.02.2022 had after necessary deliberations on the issue in hand remanded the matter to the file of the A.O, with a specific direction i.e, to restrict its claim for deduction as regards its profit from PDS only to the extent of its net profit i.e., after considering the proportionate expenses, observing as under : "19. Before us, it is the claim of the assessee that as the profit from PDS activities after considering the proportionate expenses amounted to Rs. 3,08,338/-, therefore, its claim for deduction u/s. 80P(2)(c)(i) of the Act was liable to be restricted only to the said extent. After having given a thoughtful consideration to the claim of the Ld. AR, we though princip....
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....We have given a thoughtful consideration to the aforesaid issue in hand. Admittedly, in the case of Gramin Sewa Sahakari Samiti Maryadit & Ors. Vs. the ITO, Ward-1(3), Raipur in ITA No. 114/RPR/2016 & Ors the Tribunal, had observed, that the dividend income received by a cooperative society on the shares of a co-operative bank held by it would be eligible for deduction under Sec. 80P(2)(d) of the Act. It was observed by the Tribunal as under: "22. After having given a thoughtful consideration to the aforesaid issue in hand, we are unable to concur with the view taken by the lower authorities. In our considered view, as a Co-operative bank falls within the realm of the definition of "Co-operative Society" as contemplated in Section 2(19) of the Act, therefore, the view taken by the lower authorities that dividend income received by the assessee from Jila Sahakari Kendriya Bank, Raipur, i.e a Cooperative Bank, would not eligible for deduction u/s. 80P(2)(d) of the Act cannot be sustained. Our aforesaid view is fortified by the order of the ITAT, Mumbai in the case of M/s Solitaire CHS Ltd Vs. Principal Commissioner of Income Tax-26, ITA No. 3155/Mum/2019, dated 29.11.2019 (w....
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....ng, namely (a)............................................................................................ (b)............................................................................................ (c)............................................................................................ (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income;" On a perusal of Sec. 80P(2)(d), it can safely be gathered that interest income derived by an assessee co-operative society from its investments held with any other co-operative society shall be deducted in computing its total income. We may herein observe, that what is relevant for claim of deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other co-operative society. We are in agreement with the view taken by the Pr. CIT, that with the insertion of sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P wo....
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....ai (ITA No. 6139/Mum/2014, dated 27.09.2017. (iv). Kaliandas Udyog Bhavan Pemises Co-op. Society Ltd. Vs. ITO, 21(2)(1), Mumbai We further find that 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), had held, that the interest income earned by the assessee on its investments with a cooperative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28.12.2006, also makes it clear beyond any scope of doubt that the purpose behind enactment of sub-section (4) of Sec. 80P was that the cooperative banks which were functioning at par with other banks would no more be entitled for claim of deduction under Sec. 80P(4) of the Act. Insofar the reliance placed by the Pr. CIT on the judgment of the Hon'ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd. vs. ITO (2010) 322 ITR 283 (SC) is concerned, we are of the considered view that the same being distinguishable on ....
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....in exercising his revisional jurisdiction u/s 263 for dislodging the same. In fact, as observed by us hereinabove, the aforesaid view taken by the A.O at the time of framing of the assessment was clearly supported by the order of the jurisdictional Tribunal in the case of Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum). Accordingly, finding no justification on the part of the Pr. CIT, who in exercise of his powers under Sec. 263, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we "set aside" his order and restore the order passed by the A.O under Sec. 143(3), date 14.09.2016. 10. Resultantly, the appeal filed by the assessee is allowed." Backed by our aforesaid observations, we not being able to persuade ourselves to subscribe to the view taken by the lower authorities, therein vacate the disallowance of the assessee's claim for deduction of Rs. 1,16,224/- u/s. 80P(2)(d) of the Act. The Ground of appeal No. 4 is allowed in terms of the aforesaid observations." We find that as stated by the Ld. AR, and rightly so, as the aforesaid issue in ....