TaxTMI 
TaxTMI 
2026 (7) TMI 1568
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....as condoned by CCIT, Hyderabad. 3) The learned Commissioner of Income Tax (Appeals) is not justified in holding that the deduction u/s. 80P(2)(a)(i) would not be available to interest received from deposits/savings account kept with other cooperative societies/banks which are governed by RBI Banking Regulation Act and schedule commercial banks. 4) The learned Commissioner of Income Tax (Appeals) is not justified in holding that the deduction u/s. 80P would not be available to commission received for marketing agriculture produce produced grown by members. 5) The appellant craves leave to add to, alter, amend, modify, delete, all OR any of the above grounds of appeal." 2.1. The assessee has also filed a petition for admission of additional grounds. The additional grounds raised by the assessee are as under: a) Invalid sanction under Section 151 of the Act: The notice under Section 148 dated 09.04.2022 has been issued beyond three years from the end of the relevant assessment year. Therefore, as per Section 151(ii), prior approval of the specified authority (i.e., Principal Chief Commissioner/Principal Director General/ Chief Commission....
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....as not explained the reasons which have prevented the assessee from raising this issue before the authorities below. Therefore, the additional grounds raised by the assessee for the first time before the Tribunal cannot be entertained and admitted. 5. We have considered the rival submissions and carefully perused the relevant record. The assessee has raised the legal issue in the additional grounds challenging the validity of the notice issued u/sec. 148 of the Act on 09.04.2022 based on an invalid approval u/sec. 151(ii) of the Act. Since this issue raised by the assessee is purely legal in nature and for adjudication of the same no fresh investigation or material is required but the same can be adjudicated on the basis of the facts and material available on record. Further the relevant facts regarding the legal issue raised by the assessee are not in dispute as the notice u/sec. 148 of the Act was issued by the Assessing Officer on 09.04.2022 by obtaining the approval from Pr. CIT. Hence, in the facts and circumstances of the case, we find that the additional grounds raised by the assessee is purely legal in nature and can be adjudicated on the basis of the facts and material ....
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....: 8.2. Thus, as per Para no. 3 of the said notice, the Assessing Officer has taken prior approval of the Pr. CIT. There is no doubt that the notice u/sec. 148 was issued by the Assessing Officer after 03 years from the end of the assessment year under consideration. Therefore, the Competent Authority to grant approval for issuing notice u/sec. 148 as per sec. 151(ii) of the Act is CCIT and not Pr. CIT. An identical issue has been considered by the Hon'ble jurisdictional Telangana High Court in the case of Deloittee Consulting India (P.) Ltd., vs. Assessment Unit Income Tax Department, National Faceless Assessment Centre, New Delhi (supra) in Para nos. 48 to 50 as under: "48. The proviso to Section 151 has been introduced by the Finance Act, 2023 with effect from 01.04.2023. The relevant Section 151 with its proviso is applicable to the case of the petitioner is quoted hereunder: 151. Sanction for issue of notice:- Specified authority for the purposes of Section 148 and Section 148A shall be,- (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant as....
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....g the order under Section 148A(d) of the Act or issuing notice under Section 148 of the Act on 07.04.2022 that such a proviso excluding the period consumed in furnishing the reply is going to be brought into the statute book by amendment by the Finance Act, 2023 with effect from 01.04.2023. In taxing statutes, intendment cannot be assumed unless specifically expressed in the provision enacted by the legislature. Therefore, the reopening of assessment without sanction/approval of the specified authority in accordance with Section 151 of the Act was bad in law. Consequently, reassessment order dated 16.01.2024 also is bad in law." 8.3. Thus, on identical facts the Hon'ble jurisdictional High Court has held that the notice issued u/sec. 148 of the Act dated 07.04.2022 which is after three years from the end of the assessment year by taking the prior approval from the Pr. CIT is invalid and bad in law and consequently, the re-assessment order passed by the Assessing Officer is also bad in law. By following the above Judgment of Hon'ble jurisdictional High Court, the Coordinate Bench of ITAT, Hyderabad in the case of Vijaya Malisetty, Khammam vs. ITO, Ward-1, Khammam (supra) has held....
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.... 1, which is permissible only if three years or less than three years have lapsed from the end of the relevant assessment year. In the present case, the relevant three years lapsed on 31.03.2022. Therefore, the prior approval of the Principal Chief Commissioner or Principal Director General or the Chief Commissioner or the Director General was required to be obtained before passing of the order under Section 148A(d) or before issuance of the notice under Section 148 of the Act. 50. Learned counsel for the respondent has relied upon the proviso to Section 151 of the Act inserted by the Finance Act, 2023 with effect from 01.04.2023 quoted above to contend that the period of seven days furnished to the assessee to submit reply to the notice under Section 148A(b) issued on 23.03.2022 has to be excluded for counting the period of three years. It is submitted that the proviso is clarificatory in nature and as such, it would operate from the date when the amended Section 151 was brought into force i.e., 01.04.2021. However, such a contention is fit to be rejected since the proviso to Section 151 has been inserted by the Finance Act, 2023 only with effect from 01.04.2023. It, ther....
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....151 of the Act (as made available on the statute w.e.f 01.04.2021), therefore, the assessment so framed by him u/s. 147 r.w.s. 144 r.w.s 144B of the Act, dated 13/02/2024, being devoid and bereft of any valid assumption of jurisdiction, is liable to be quashed. Accordingly, we quash the assessment framed by the A.O. under Section 147 r.w.s 144 r.w.s 144B of the Act, dated 13.02.2024, in terms of our aforesaid observations." 8.4. Accordingly, by following the Judgment of Hon'ble jurisdictional High Court as well as the decision of Coordinate Bench of this Tribunal (supra), we hold that the notice issued by the Assessing Officer on 09.04.2024 u/sec. 148 of the Act after three years from the end of the assessment year under consideration by taking the prior approval from the Pr. CIT is invalid and liable to be quashed. We Order accordingly. 9. Since we have quashed the notice issued u/sec. 148 of the Act as invalid which vitiates the re-assessment order passed by the Assessing Officer therefore, we do not propose to take-up other grounds raised by the assessee. 10. In the result, appeal of the Assessee for the assessment year 2018-2019 is allowed. ITA. No. 2462/Hyd./2025 -....
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....without jurisdiction is invalid, and consequent assessment is liable to be quashed. Hon'ble High Court of Telangana took this view in their order dated 14.09.2023 in Kankanala Ravindra Reddy VS. Income-tax Officer [2023] 156 taxmann.com 178 (TELANGANA)/[2023] 295 Taxman 652 (TELANGANA) [14-09-2023] 4. The above ground was not raised before the lower authorities purely due to inadvertence and the omission/failure was neither intentional nor deliberate. Moreover, the issue raised is legal in nature and all the relevant facts are already on record. Hence, the appellant humbly prays that the following additional ground of appeal may kindly be admitted and adjudicated, since all the material facts relating to this ground are already on record." 12. The issue raised by the assessee in the appeal is regarding disallowance of deduction u/sec. 80P of the Act by the Assessing Officer due to delay in filing the return of income. The learned Authorised Representative for the Assessee has submitted that the CCIT has condoned the delay in filing the return of income and therefore, the basis on which the Assessing Officer has disallowed the deduction u/sec. 80P itself is no more i....
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....rn of income within the due date of filing the return u/sec. 139(1) of the Act. The Assessing Officer has also assessed the interest income received by the assessee from Prakasam DCCBL as income from other sources. The learned CIT(A) has upheld the Order of the Assessing Officer on similar reasoning as there is a delay in filing the return of income. Now the delay in filing the return of income has been condoned by the CCIT vide Order dated 10.02.2025 which reads as under: 15.1. Accordingly, in view of the subsequent development that the delay in filing the return of income has been condoned by the CCIT the claim of the assessee u/sec. 80P of the Act has to be allowed in respect of the income of the assessee from main business activity as well as the interest earned by the assessee from Cooperative Bank. On the issue of deduction u/sec. 80P of the Act allowable in respect of the interest earned from Cooperative Bank has been considered by this Tribunal in the case of ACIT, Circle-9(1), Hyderabad vs. Ranga Reddy District Judl. Employee Mutually Aided Co-operative Society, Hyderabad (supra), in Para nos. 17 and 18 as under: 17. We have thoughtfully considered the contenti....
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....at pursuant to insertion of sub-section (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2)(d) in respect of the interest income that was earned on the amounts which were parked as investments/deposits with co-operative banks, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. Observing, that the co-operative banks from where the assessee was in receipt of interest income were not co-operative societies, the Pr. CIT was of the view that the interest income earned on such investments/deposits would not be eligible for deduction under Sec. 80P(2)(d) of the Act. 7. After necessary deliberations, we are unable to persuade ourselves to be in agreement with the view taken by the A.O. Before proceeding any further, we may herein reproduce the relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. "80P(2)(d) (1). Where in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall ....
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....80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec. 80P(2)(d) of the Act. 8. We shall now advert to the judicial pronouncements that have been relied upon by the Id. A.R. We find that the issue that a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income derived from its investments held with a co-operative bank is covered in favour of the assessee in the following cases: (i) Land and Co-operative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum) (ii) M/s C. Green Co-operative Housing and Society Ltd. Vs. ITO-21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31.03.2017 (iii) Marvwanjee Cama Park Co-operative Housing Society Ltd. Vs. ITO-Range-20(2)(2), Mumbai (ITA....
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....rative Sale Society (2017) 392 ITR 74 (Karn) and Hon'ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), wherein it was observed that the interest income earned by a co- operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act." 18. We thus, in terms of our aforesaid observations find no infirmity in the view taken by the CIT(A) who had rightly vacated the disallowance of the claim of the assessee society for the deduction u/s. 80P(2)(d) of the interest income of Rs. 1,04,92,276/- on its deposits with the co-operative banks, viz. (i). Deccan Gramin Bank; and (ii). AP Grameen Vikas Bank. The Grounds of appeal Nos. 3 and 4 are dismissed in terms of our aforesaid observations." 15.2. Accordingly, the impugned order of the learned CIT(A) is set-aside and the matter is remanded to the record of the Assessing Officer to consider the claim of deduction of the assessee u/sec. 80P of the Act in light of the Order of the CCIT condoning the delay in filing the return of income. The Assessing Officer is also directed to allow the interest income of the a....
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....MISSIONER OF INCOME TAX accorded on date 08/04/2022 vide Reference No. 100000029608055 THRUMALA SATYANARAYANA RAO BITRA ITO,WARD-1,ONGOLE Document 2 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE CHIEF COMMISSIONER OF INCOME TAX CCIT, HYDERABAD To. SAJJAPURAM PRIMARY AGRICULTURAL CO OPERATIVE CREDIT SOCIETY LIMITED SALJAPURAM PACS ,Santhamaguluru PRAKASAM Santhamagulur &.0 523302,Andhra Pradesh lidia PAN: Assessment Year: Dated: DIN & Order No : AAHAS0325A 2019-20 10/02/2025 ITBA/COM/F/17/2024-25/1073077410(1) Sie/ Madam/ M/s, Subject: Condonation for filing ITR u/s 119(2)(b) - Approval Order Sub: Application for condonation of delay under section 119(2)(b) of the Income- tax Act, 1961 in the case of M/s Sajjapuram Primary Agricultural Cooperative Credit Society Ltd (AAHAS0325A) for AY 2019-20 - Order - reg. ***** ORDER The assessee, M/s Sajjapuram Primary Agricultural Cooperative Credit Society Ltd (AAHAS0325A) has filed a petition u/s. 119(2)(b) of the I-T Act for A.Y. 2019-20 in this office requesting to condone the delay in filing retum of income and the claim for deduction u/s 80P of the Income-tax Act. In this ca....