TaxTMI 
TaxTMI 
2023 (10) TMI 1432
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....ts of the case is that the appellant is a Cooperative Credit Society, it had deployed its fund available with District Co.Op. Bank as per the requirement of RBI and earned interest income which is eligible for deduction u/s. 80P(2)(a)(i) of the Act. Thus the assessee had interest income of Rs. 2,55,000/- on FDR placed with Sabarkantha District Cooperative Bank. The assessee also borrowed money as unsecured loan from members and paid interest of Rs. 2,10,000/-. Thus the net interest earned by the assessee is Rs. 45,000/- only. For the Assessment Year 2017-18, the assessee filed its Return of Income on 22.01.2018 declaring Nil Income. The Return was taken up for scrutiny assessment and the Assessing Officer denied the benefit of Section 80P(2)(a)(i) and made addition of Rs. 2,55,000/- received from Sabarkantha Bank as income from other sources. 4. Aggrieved against the same, the assessee filed an appeal before National Faceless Appeal Centre, Delhi (NFAC). The Ld. NFAC set aside the assessment to the file of the A.O. with a direction to examine whether the assessee has incurred any expenditure for earning interest income which is assessed under the head "other ....
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....ction 143(3) of the Act allowing the similar claim of the assessee for deduction under Section 80P(2) of the Act in respect of interest income earned on the deposits with Mehsana Urban Co-operative Bank was set aside by the same learned PCIT vide his order passed under Section 263 of the Act in the case of the People Co-op. Credit Society Ltd by relying on the decision of Hon'ble Karnataka High Court in the case of Totgars Cooperative Sale Society (supra) and, on appeal by the assessee, the Coordinate Bench of this Tribunal vide its order dated 21.02.2022 passed in ITA No. 384/Ahd/2020 set aside the order passed by the learned PCIT under Section 263 of the Act restoring that of the Assessing Officer by relying inter alia on the decision of the Hon'ble jurisdictional High Court in the case of State Bank of India (supra). Copy of the said order of the Tribunal is also placed on record and perusal of the same shows that a similar issue was decided by the Tribunal vide paragraph No. 7 of its order as under:- "7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the entire details called for ....
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....issue in respect of ordinary and nominal members. We however find that the above former decision goes contrary to hon'ble jurisdictional high court's judgment in Tax Appeal No. 473 of 2014 CIT vs. Sabarkantha District Cooperative Milk Producers Union Ltd. declining Revenue's identical question of law challenging tribunal's decision allowing Section 80P deduction in respect of interest earned on fixed deposits with a cooperative bank in assessment year 2009-10 i.e. post Section 80P(4) amendment w.e.f. 01.04.2007. Their lordships' reasoning to this effect reads as under: "4.0. Now, so far as proposed question no. B i.e. whether the Appellate Tribunal has substantially erred in upholding the order of the CIT (A) in deleting the disallowances of Rs. 1,42,19,5157- under Section 80(P)(2)(d) of the Act is concerned, it is required to be noted that the assessee claimed deduction under Section 80(P)(2)(d) of the Act on the interest earned on the fixed deposit with Cooperative Bank and the Societies and it has been found that as such the income was received from the investment in Cooperative Societies and Cooperative Bank. Considering Section 80(P)(2)(d....
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.... the disallowability of the claim of deduction as per a different provision i.e 80P(2)(d) of the Act. The ld.DR was unable to demonstrate that the assessee was issued notice prior to holding the assessment order being erroneous on account of allowing deduction of interest income u/s 80P(2)(a)(i) of the Act. We have noted that the assessee in his reply filed to the Ld.PCIT in response to notice issued under section 263 of the Act had pointed out that the Ld.PCIT had wrongly found the deduction claimed by the assessee u/s 80P(2)(d) of the Act and it was clarified that the assessee had claimed deduction u/s 80P(2)(a)(i) of the Act. ........................................... 11. Considering the fact that the Ld.PCIT had analysed certain facts relating to the issue while arriving at his finding, it was imperative upon him to have confronted the facts and analysis to the assessee for his rebuttal thereon. Not doing so tantamount to taking an adverse view on facts at the back of the assessee, which is in clear violation of the principles of natural justice. The suo moto submissions made by the assessee regarding his eligibility to claim deduction on this ground cannot b....