2024 (10) TMI 1764

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....ent Year (A.Y.) 2017-18. 2. The brief facts of the case are that the assessee had filed his return of income for A.Y. 2017-18 on 18.10.2017 declaring Nil income. The original assessment was completed u/s. 143(3) of the Act on 16.12.2019 at total income of Rs. 15,50,868/-. Thereafter, the AO had initiated proceeding u/s.147 of the Act on the ground that the interest earned by the assessee on FD/Savings bank with co-operative banks amounting to Rs. 31,39,316/- was not eligible for deduction u/s 80P(2)(d) of the Act and was liable to be assessed as 'income from other source'. The AO had passed reassessment order u/s. 147 r.w.s. 144B of the Act on 30.03.2022 on the income of Rs. 15,50,864/- as per the original assessment order u/s. 143(3) of....

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....e finding as recorded by the AO in the said order and submitted that the AO had given a categorical finding that the case was reopened on change of opinion and there was no failure on the part of the assessee to fully and truly disclose any material facts. The AO had, therefore, dropped the reopening proceedings and accepted the assessed income of Rs. 15,50,864/- as per the original order u/s. 143(3) of the Act dated 16.12.2019. The Ld. AR contended that when the reopening proceeding was dropped by the AO on the ground of wrong assumption of jurisdiction, in essence, no re-assessment order was passed and, therefore, there cannot be any question of such order being erroneous and prejudicial to the interest of the revenue. According to the Ld....

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....rative Bank Ltd. was a Cooperative Society registered under the Cooperative Societies Act, 1912. On the basis of this enquiry, the AO had given a finding in the reassessment order that since the Cooperative Bank was also a Cooperative Society, the interest earned out of deposits made by the assessee with this Cooperative Society was allowable as deduction u/s. 80P(2)(d) of the Act. The AO had also referred to the decision of the Jurisdictional High Court in the case of CIT vs. Sabarkantha District Co-Operative Milk Producers Union in Tax Appeal No. 473 of 2014, dated 16.06.2014 and recorded his finding in the re-assessment order as under: "6.1. Duly following the above decision of the jurisdictional High Court and other decisions c....

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....d in the original assessment, no order u/s.147 of the Act could have been legally passed. Therefore, the question of the order u/s.147 of the Act dated 30.03.2022 being erroneous and prejudicial to the interest of the revenue doesn't arise, as the AO in essence had not passed any re-assessment order but had merely dropped the proceeding. The mistake of wrong allowance of deduction u/s. 80P(2)(d) of the Act, if any, was in the original assessment order u/s. 143(3) of the Act dated 16.12.2019 as acknowledged in the reason for reopening, and only that order could have been subject to revision u/s. 263 of the Act. However, as a time limit to revise the original order u/s. 143(3) of the Act had also expired, the Ld. PCIT could not have passed an....