TaxTMI 
TaxTMI 
2023 (4) TMI 1342
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..... 2.2. On perusal of records by PCIT, the assessee shown gross total income at Rs. 14,55,535/- after claiming deduction u/s. 80P of Rs. 9,41,073/-. Further perusal of Profit and Loss account, the assessee received interest income of Rs. 18,14,676/- from the Cooperative Bank (KDCC Bank) which is not eligible for deduction either u/s. 80P(2)(a)(i) or u/s. 80P(2)(d) of the Act. The Assessing Officer while passing the assessment order has not verified the claim of deduction u/s. 80P of the Act, which is an erroneous order and prejudicial to the interest of Revenue. Therefore a show cause notice dated 14.03.2022 was issued to the assessee and requiring the assessee to file its submissions on or before 18.03.2022. Though the notice was served by registered e-mail on 14.03.2022 and also through Speed Post. However the assessee has not replied to the notice. Therefore the Ld. PCIT by this impugned order dated 27.03.2022, without giving any further opportunity set aside the assessment order with a direction to the A.O. to pass fresh assessment order after taking into consideration the issues discussed by him and granting reasonable opportunity of being heard to the assesse....
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.... which would be entitled to exemption or deduction under the special provisions of Chapter VI-A in the form of section 80P of the Act. Therefore the Revision order passed by the PCIT does not require any interference and the assessee is liable to be dismissed. 6. We have given our thoughtful consideration and perused the materials available on record including the Paper Book and case laws filed by the assessee. This issue was considered by Coordinate Bench of this Tribunal and passed the following order after considering the Karnataka High Court judgment in the case of Totagar's Co-operative Sale Society Ltd. and State Bank of India vs. CIT of our Jurisdictional High Court. The relevant portion of the order is reproduced as follows: "...5. We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the assessee. As rightly argued by the Ld. Representative of the assessee, this issue is being dealt by the Co-ordinate Bench of the Tribunal in its decision in the case of The Sardar Patel Co-operative Credit Society Ltd (cited supra), wherein its held as follows: 4. We have heard the arguments of both t....
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....h Court decision in the case of Totgars Co-operative Sales Society (supra), the PCIT cannot invoke provisions of section 263 of the Act. Thus, Section 263 does not sustain and appeal of the assessee is allowed." 5.1. Further the Co-ordinate Bench judgment in the case of People's Co.Op. Credit Society Ltd. (cited supra) held as follows: 4. We now advert to the lead issue of Section 80(P)(2) disallowance of Rs. 27,97,019/- in respect of assessee's interest income derived from its deposits with the Banas Co-operative Bank. Both the lower authorities quote the legislative amendment vide Finance Act, 2006 w.e.f. 01.04.2007 inserting subsection 4 in Section 80P as well as CBDT's explanatory notes to the above Finance Act dated 28.122006 in holding that the impugned interest income derived from co-operative bank is not eligible for deduction. Learned Departmental Representative vehemently contends that hon'ble Karnataka high court's recent decision in (2017) 83 taxmann.com 140 (Karnataka) PCIT vs. Totagars Co-operative Sale Society has settled the law that such an income is not allowable as Section 80P deduction in view of the legislative amendment h....
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....e of Rs. 27,97,019/- in question. This lead appeal ITA No. 1891/Ahd/2014 is partly accepted. 5.2. We therefore respectfully following the above decisions of the Co-ordinate Bench of this Tribunal, which has followed jurisdictional High Court judgment and we hereby quash the impugned order passed by the Ld. PCIT u/s. 263 of the Act and restore the assessment order passed by the Assessing Officer u/s. 143(3) of the Act. Thus, the grounds raised by the assessee are hereby allowed." 6.1. In another Co-ordinate Bench of This Tribunal in the case of Laxmi Bachat Sharafi Sahkari Mandali Ltd. (cited supra) held as follows: "... 9. The next contention that the order of the Ld.PCIT needs to set aside being passed without giving opportunity of hearing to the assessee, we find, merits consideration. The contention of the Ld.Counsel for the assessee in this regard was that the specific ground on which the assesses claim of deduction u/s 80P of interest income earned from FD's etc in Banks was found incorrect, being not allowable as per section 80P(2)(a)(i) of the Act, was never confronted to the assessee. 10. A perusal of the order of the ld. Pr. CIT does....