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2025 (6) TMI 1752
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....e have clubbed these appeals and heard together, and a consolidated order is being passed for the sake of convenience and brevity. 3. At the outset, Learned Counsel for the assessee, argued that in both the appeals, there is only one single issue, which relate to deduction u/s 80P(2)(d) of the Act. In respect of assessee's appeal in ITA No.113/RJT/2025, the Ld. Counsel for the assessee, took us, through assessment order page-14, vide para-4.21, wherein the Assessing Officer added interest received from Kutch District Central Operative Bank and Rajkot Nagrik Sahkari Bank of Rs. 4,84,18,203/-. The relevant para of the assessment order is reproduced below: "4.21. Subject to these remarks the interest income earned by the assessee from Kutch District Central Operative Bank and Rajkot Nagrik Sahkari Bank of Rs. 4,84,18,203/- is held to be not includable for deduction under 80P of the Act. So, the deduction claimed u/s 80P(2)(d) on interest income received by the assessee of Rs. 4,84,18,203/- is being disallowed and added to the income of the assessee during the year under consideration." 4. In respect of assessee's appeal in ITA No.114/RJT/2025, the Ld. Counsel for the as....
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....nalysis and Conclusion 23. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. PCIT and other material brought on record. We note that during the assessment proceedings, the Assessing Officer issued notice under section 142(1) of the Act, dated 16.01.2020, which is placed at paper book page no.15, wherein the Assessing Officer has especially asked the assessee, to furnish eligibility criteria of deduction claimed in different sections of Chapter VI-A, especially under section 80P(2)(a)(i) and under section 80P(2)(d) of the Act. The assessing officer, has also asked the assessee to furnish the documentary evidence in support of its claim of deduction under Chapter VI-A. In response to the said notice under section 142(1) of the Act, the assessee has submitted its reply, dated 01.12.2020 (vide paper book page nos. 17 to 21), before the Assessing Officer, the relevant part of the assessee's reply dated 01.12.2020, is reproduced below: From the above computation of total income a....
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..../Advances/Loans ii. Unsecured Loans iii. Deduction from Total Income under Chapter VI-A The assessee society has filed Return of Income for AY.2018-19 on 13.08.2018, vide acknowledgment no.108456181130818, reflecting Gross Total Income Rs. 43,36,723/- and after claiming deduction u/s 80P(2) of the I.T. Act, 1961 Returned income is declared NIL. The same is processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter mentioned Act). 2. Notice u/s 143(2) of the Act issued on 22.09.2019 and thereafter notices u/s 142(1) of the Act along with questionnaire were issued. 3. In response to the notices issued, the assessee society has furnished all the relevant details called for. The same has been perused carefully and found to be in order. 4. In view of the above facts of the case and after considering the details furnished, the total income returned by the assessee is accepted." 26. From the above assessment order, it is vivid with that during the assessment proceedings, the assessing officer issued notice under section 142(1) of the Act, dated 16.11.2020, which is placed at assessee's paper page No.15, and response to the said n....
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....ficer cannot take a plausible view specially when there is a judgement of Hon'ble Gujarat High Court in the case of Katlary Karyana Merchant Sahkari Sarafi Mandali Ltd. (2022) 140 taxmann.com 602 (Gujarat), wherein it was held that interest received from co- operative banks and other banks are not eligible for deduction u/s. 80P(2)(d) of the Act. The reason being, the assessing officer ignored the judgement of the jurisdictional High Court of Gujarat, in the case of Katlary Karyana (Supra). Therefore, ld. D.R. stated that the order passed by the assessing officer is not sustainable in the eyes of law and hence the ld. PCIT has rightly exercised his jurisdiction as per clause (d) of explanation 2 of section 263 of the Act. Therefore, as per ld. DR. for the Revenue the order passed by the assessing officer is erroneous as well as prejudicial to the interest of the Revenue. We note that arguments advanced by the ld. D.R. for the Revenue carries weight and he has rightly stated that order passed by the assessing officer is not sustainable in the eyes of law. We also agree that during the assessment proceedings just to call the details by issuing notice u/s. 142(1) of the Act and in res....
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....the revenue, or where two views are possible and the Assessing Officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue "unless the view taken by the Assessing Officer is unsustainable in law". 30. Taking note of the aforesaid dictum of law laid down by the Hon'ble Apex Court, let us examine the issue under consideration. We agree with the ld. D.R. for the Revenue that just to collect the details during the assessment proceedings by issuing notice 142(1) of the Act, and furnishing of the details by the assessee, in response to that notice, and then after examination of the issue by AO and then to take a plausible view, by assessing officer is not sufficient, as we have noted that Hon'ble Apex Court in the case of Malavar Industries Ltd. (supra) has clearly pointed out that the view taken by the assessing officer, should be sustainable in the eyes of law. Therefore, in these circumstances, we have to examine whether it was necessary for the assessing officer to accept the ratio laid down by the Hon'ble Jurisdictional High Court in the case of Katlary Karayana (supra), wherein the Hon'....
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....of Sabarkantha District Co-operative Milk Producers Union Ltd. In Tax Appeal No.473 of 2014 dated 16-06-2014 (Guj HC) held that interest received from the co-operative bank is allowable as a deduction u/s.80P(2)(d) of the Act. We also find that there is another judgment of the Hon'ble Gujarat High Court in the case of Surat Vankar Sahakari Sangh Ltd. 421 ITR 134 (Guj HC) wherein the Hon'ble Gujarat High Court held that interest received from co-operative bank is allowable deduction u/s. 80P(2)(d) of the Act. Therefore, we find that the above judgments i.e. in case of Sabarkantha District Co-operative Milk Producers Union Ltd (supra) and in case of Surat Vankar Sahakari Sangh Ltd. (supra), the Hon'ble Jurisdictional High Court clearly held that interest received from Co- operative banks, are allowable as a deduction u/s. 80P(2)(d) of the Act. These two old judgments were not distinguished by the Hon'ble Jurisdictional High court in the case of Katlary Karayana (supra) i.e. the Hon'ble Jurisdictional High Court of Gujarat did not overrule and did not distinguish and reject the earlier judgments delivered by it in case of Sabarkantha District Co-operative Milk Producers Union Ltd (sup....
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....he ratio of these old judgments namely; (i) Sabarkantha District Co-operative Milk Producers Union Ltd (supra) and, (ii) Surat Vankar Sahakari Sangh Ltd. (supra) would still be applicable to the assessee under consideration, as these judgements never distinguished and never overruled by constituting a larger Bench by the Hon'ble Jurisdictional Gujarat High Court. Hence, we find that the assessing officer has definitely taken a plausible view after examination of the issue under consideration which cannot be subject to revision by the ld. PCIT u/s. 263 of the Act because the view taken by the assessing officer is sustainable in law. Therefore, the argument advanced by the ld. D.R. for the Revenue, to the effect that assessing officer has failed to make compliance of the judgment of Hon'ble Jurisdictional High Court of Gujarat in the case of Katlary Karayana (supra), is not acceptable, as the assessing officer, has taken the view which is sustainable in the eye of law, based on the old judgements of the jurisdictional High Court of Gujarat, which are direct judgements on the issue under consideration, hence, there is no violation of judicial discipline by the assessing officer. ....
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....a) does not apply to the assessee under consideration and therefore the view taken by the assessing officer is plausible view and sustainable in law.Therefore, in fact, the assessing officer has followed the judicial discipline as mentioned in the judgement of Thane Electricity Supply Ltd. (supra), therefore, the plea raised by the ld. D.R. for the Revenue is hereby rejected. (iii) The third argument advanced by Ld. CIT-DR for the Revenue is that assessing officer, no doubt, issued the notice u/s. 142(1) of the Act to conduct inquiry and assessee has submitted the reply in response to that notice, however, the assessing officer has not applied his mind that deduction u/s 80P(2)(d) of the Act is not available in respect of interest received from co-operative bank. In this context, we state that assessing officer after taking the details and evidences from the assessee, has examined thoroughly and taken a plausible view that deduction u/s. 80P(2)(d) of the Act is available to the assessee under consideration in view of the old decisions of the Hon'ble Gujarat High Court in the case of Sabarkantha District Co-operative Milk Producers Union Ltd (supra) and in the case of Surat....
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....on'ble jurisdictional High Court in the case of Katlery Karyana (supra), in the following recent judgments of ITAT, Rajkot, which are reproduced below: (i) Kutch District Co-operative Milk Producers Union Ltd., 159 taxmann.com 347, order dated 29.01.2024 (ii) Rajkot Jilla Sahakari Kharid Vechan Sangh Limited, in ITA No.49/Rjt/2022, order dated 09.208.2023 (iii) Shree Keshav Co-operative Credit Society Ltd., in ITA No.26/Rjt/2022, order dated 31.05.2022 The ld DR pointed out that in accordance with the decision of Hon`ble Supreme Court in the case of ACIT, Rajkot Vs. Saurashtra Kutch Stock Exchange Ltd, dated 15/09/2008, (2008) 173 Taxman 322 (SC), wherein amongst others, it was held that non-adherence to orders of Jurisdictional High Court and Supreme Court is a mistake apparent on record, therefore, the above orders of the jurisdictional Tribunal require rectification under section 254 (2) of the Act. In this regard, we find that the Co-ordinate Bench of Rajkot, in the above decisions, has clearly considered the old judgments rendered by the Hon'ble Jurisdictional, Gujarat High Court, namely, (i) Surat Vandar Sahakari Sangh Ltd(Supra) and (ii) S....
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....risdictional Gujarat High Court in the case of Sabarkantha District Co-operative Milk Producers Union Ltd (supra) and in the case of Surat Vankar Sahakari Sangh Ltd, (supra) has taken a plausible view, which is sustainable in the eye, law. The assessing officer has not considered the judgement of Hon'ble Gujarat High Court in the Katlary Karayana (supra), as the ratio laid down by the Hon'ble Gujarat High Court in the case of Katlary Karayana(supra)is not applicable to the assessee, under consideration and hence there is no violation of the principles laid down by the Hon'ble Supreme Court in the case of Saurastra Kutch Stock Exchange Ltd. (supra).We are of the view that the judgement of the Hon'ble Jurisdictional High Court of Gujarat in the case of Katlary Karayana (supra), is not binding on the assessing officer, as we have stated that this judgement is in different context of section 194A of the Act and specially it is in the context of income escaped assessment u/s 147 of the Act, therefore, the ratio of the judgement does not apply to the assessee, under consideration. So far as the judicial discipline is concerned, there is no violation of the judicial discipline, by the ass....
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....tfully following the binding judgment of the Division Bench of this Tribunal in the case of Shri Avadh Nagarik Sahkari Mandli Ltd. (supra), we allow grounds raised by assessee in these two appeals. 10. In the result, both the appeals (ITA No.113 and 114/RJT/2015) of assessee are allowed. A copy of the instant common order be placed in the respective case file(s) Order is pronounced on 08/05/2025 by placing the result on the Notice Board. ============= Document 1 # wa-vad-# n हेड पोसà¥à¤Ÿ ऑफिस साà¤à¥‡, अमरेली-३९५९०१. शेन : ०२à¥à¥®à¥¨-२२à¥à¥¨à¥®à¥® Total Purchase Date of Consideration Purchase Unit Sr. Name and Quality Nojof the shares held Price per Purchase Source of Date of Funds for Investment Sale Sale Consi- deration Calculation of Capital Gains/ Loss on Sale > The details in respect of Investments in Shares is enclosed herewith for your verification in Annexure C. 3. The Details in respect of deduction claimed under chapter VI-A is as un....
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....Sahkari Mandali Limited" > Income received on Loan, banking or providing credit facilities to its members which has been given to members of the Co-operative Society "Shri Avadh Nagrik Sarafi Sahkari Mandali Limited" which is eligible for deduction under Section 80P(2)(a)(i). b. Section 80P(2)(d) - Interest or dividend from its investment with any other co-operative society: > Interest Income is eligible for deduction u/s 80P(2)(d). > Dividend Income is eligible for deduction u/s 80P(2)(d). The above mentioned Income is eligible for deduction under various sub sections of section 80P; hence, the said Income of the Co-operative Society "Rajula Khambha Taluka Cooperative Purchase and Sales Union Limited" Shall not be disallowed u/s 80P. Adora acorél visvil cil. omècli Document 3 왜 버디티 ë©”ì´íŠ¸ë“± 있리게 ë ˆíŠ¸ë°ë¦¬ Hisol a. ili. The Co-operative Society "Shri Avadh Nagrik Sarafi Sahkari Mandali Limited" Is registered under Co-operative Societies Act 1912. Sec .- 9 and provides credit facilities to its members in the manner mentioned under the Act and : main business of society is to pro....