TaxTMI 
TaxTMI 
2023 (12) TMI 209
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....sessing Officer to pass a fresh assessment order. 3) On the facts and in the circumstances of the case the learned Pr.C.I.T. erred in not considering the facts that the societies registered before enactment of Income Tax Act 1961, having special relief as per SRO 998 and SRO 1800 with exemption from Income Tax. 4) On the facts and in the circumstances of the case, the learned Pr.C.I.T. erred in directing Assessing Officer to assess the income under section SOP. 5) On the facts and in the circumstances of the case, the learned Pr.C.I.T. erred in not considering the facts that the Government had made the Part B States (Taxation Concessions) Order, 1950 vide SRO 998 dated 2nd December, 1960, which is still continue in force and not withdrawn by Government. 3. As transpires from the order of the ld.Pr.CIT, he assumed jurisdiction for revision of the assessment order passed in the present case under section 143(3) of the Act, noting error therein that the AO had allowed the assessee's claim of deduction under section 80P(2)(c)/(d) of the Act of interest income and rental income without making proper verification. He noted that the rental income was not comp....
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..... Neither section 23 nor section 24 provides for the deduction of the expenses incurred towards the expenditure/repairing expenditure. Therefore, only the expenditure specified in section 24 can be allowed as deduction from the annual value while computing income from house property. This issue has been specifically considered by the Hon'ble Delhi High Court in the case of H. G. Gupta & Sons in which the Hon'ble High Court held that Legislature had used the word 'namely' in section 24 of the IT Act, 1961 and this showed that the heads of expenditure whereof deduction could be claimed in the computation of income from house property were exhaustive. Therefore, the expenditure made by the assesses are of capital expenditure/repairing expenditure and not allowable against the taxable income under the head income from house property. 3. Beside the above the assessee has also claimed deduction of Rs. 50,000/- u/s. 80P(2)(c) of the IT Act and deduction of Rs. 70,02,837/- u/s. 80P(2)(d) of the IT Act. 3.1 In respect of claim of deduction u/s. 80P(2)(c) of the IT Act, it is seen from the assessment record that the assessee has let out the building/wadi/hor....
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....e assessed as Income from Other Sources and it is not eligible for deduction under section 80P(2)(a)(i)/80P(2)(d) of the Act. The issue of taxability of interest earned from surplus funds decided by the Hon'ble Supreme Court in the case of Totgars' Co-operative Sale Society Ltd. v/s. ITO [2010] 322ITR 283/188 Taxman 282, wherein it was held that the assesses being co-operative society is engaged in providing credit facilities to its members of marketing agricultural products of its members, interest earned by it by investing surplus funds in short term deposits would fall under the head "income from other sources" taxable u/s. 56 of the I.T.Act and it cannot be said to be attributable to the activities of the Society and therefore, the interest did not qualify for deduction u/s. 80P(2)(a)(i) of the I.T.Act. Though the aforesaid mistake was existing, the AO had accepted your submission and allowed the deduction claimed u/s. BOP of the Act, without making any verification of investment of surplus funds. 4. The AO has made assessment in the manner as discussed above without making investigation and verification of rental income and investment of surplus funds and inte....
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....assessee, noting that, on a similar issue Hon'ble Gujarat High Court in the case of Sri Gopal Gram Seva Sahakari Mandali Ltd., vide IT reference No.16 of 2003 had rejected identical contention made before it ,answering the issue in favour of the Revenue and issuing directions to the ITO to decide the case under section 80P(2) of the Act. His finding in this regard at para-6 of the order is as under: "6. It is seen that on a similar issue, the Hon'ble High Court of Gujarat vide IT Reference No. 16 of 2003 in the case of CIT Vs Shri Gopal Gram Seva SahakariMandii Ltd, answered in favour of the Department and issued directions to the Income-Tax Officer to decide the case under section 80 P of the I.T.Act. 1961. The Question of Law before the Hon'ble High Court is as under: "2. Whether, the appellate tribunal is right in law in holding that Notification No. SRO/992 dated 22.12.1950 of the old Act, 1922 was not withdrawn and, therefore, it provided a good basis to the Cooperative Society to seek exemption of its income from business. The Hon'ble High Court answered the above question in favour of the Department and against the assessee." 6.....
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....er, it was pointed out that section 297 of the Income Tax 1961 ,which substituted the repealed 1922 Act, was pari-materia to section 6 of the General Clauses Act, dealing with effect of repeal and providing for continuation of proceedings initiated under the 1922 Act, in 1961 Act. He pointed out that as per section 297(2)(l) any concession granted in 1922 Act by way of order or notification would continue in 1961 Act until rescinded by a notification, and thereafter he stated that since there is no separate order or notification issued rescinding the earlier order granting exemption to the income of the assessee, the assessee would continue to enjoy the exemption vide the earlier order issued under the 1922 Act. 8. In response to the decision cited by the ld.Pr.CIT of the Hon'ble Gujarat High Court, he pointed out that the Hon'ble Supreme Court in a subsequent decision in the case of Maharao Bhim Singh of Kota Vs. CIT, 2016 111 SCR 193 in Civil Appeal No.2812 of 2015 dated 5.12.2016 has held that the order granting exemption to income of entities in Part-B States, was still in force and is not to be treated as withdrawn. His submission in this regard made in writing before us, a....
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....tive societies granted. In the above referred decision, Hon'ble Supreme Court referred to the above order, itself clarifies that the said order still in force and it is not withdrawn and benefit under that concession order is granted by Hon'ble Supreme Court. Therefore, your honour's assessee would like to submit most humbly that, being issued on the same Notification and Sr (iii) of Paragraph 15 is still in existence, then Sr (iv) would also to be in existence, where Sr (iii) deals with annual value of the palace of ruler while Sr (iv) provides exemption to cooperative societies. 9. The ld.DR however countered by stating that the decision of the Hon'ble Apex Court did not lay down any such proposition and that it was rendered in completely different set of facts. That therefore the said decision was of no assistance to the assessee. 10. We have heard the rival contentions. The brief issue for adjudication before us is whether the ld.Pr.CIT had correctly exercised his power for revision of assessment order. More specifically, whether the ld.Pr.CIT had rightly held the assessment order as being erroneous causing prejudice to the Revenue on account of allowing deduc....
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.... CIT (supra) had reversed this proposition of law laid down by the jurisdictional High Court holding that the exemption allowed under the order issued under 1922 Act persisted and applied even under 1961 Act. 13. We have gone through the order of the Hon'ble Apex Court in the said case, and we find that it is entirely distinguishable on facts, and the Hon'ble Apex Court has not laid down any such proposition that the order issued under the 1922 Act granting exemption to incomes earned in Part-B States would continue to subsist even under the 1961 Act. In the case before the Hon'ble Apex Court, the Issue for consideration was the interpretation of section 10(19A) of the Act which provided for exemption of annual value of any one palace in the occupation of a Ruler. The dispute arose in the factual background that the palace was partly self occupied by the Ruler and partly let out earning rental income. The claim of the Revenue was that the entitlement to exemption u/s 10(19A) of the Act was to be confined only to the portion of the palace in the occupation of the Ruler. The Hon'ble apex court interpreted the provisions of section 10(19A) of the Act to state that it granted exempt....