BARDC BANK BHATKAL,BHATKAL V. INCOME TAX OFFICER, WARD - 2, KARWAR

ITA 306/PAN/2024

AI Insights

The case involves BARDC Bank Bhatkal, a primary co-operative agricultural and rural development bank, which appealed against the order of the National Faceless Appeal Centre (NFAC) that partly allowed its appeal regarding the computation of deduction under section 80P of the Income Tax Act, 1961. The bank had initially claimed a deduction of 91,99,132, which was denied by the Assessing Officer during the scrutiny assessment. The NFAC directed the Assessing Officer to compute and allow the deduction to the extent attributable to the interest income from business, excluding the subsidized interest received from the government. The bank contested the exclusion of the subsidized interest, leading to the present appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783874 (ITAT-PANAJI)
• Duration Of Justice: 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: WT(D)
• Assessment Year: 2020-2021
• Appeal Filed On: 11-12-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: RIJJULA UNIYAL LD.
• Assessee Lawyers: PRATIBHA; LD.
• Keywords: Business income; Additional evidence
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, GOA ITAT-Panaji Page 1 of 4 BEFORE HON’BLE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER ITA No. 306/PAN/2024 Assessment Year : 2020-21 BARDC Bank Bhatkal Next to BSNL Tower, Bhatkal, Uttara Kannada. PAN:AAAAP1731G . . . . . . . Appellant V/s Income Tax Officer, Ward-2, Karwar. . . . . . . . Respondent Appearances Assessee by : Ms Pratibha, Adv [‘Ld. AR’] Revenue by : Ms Rijjula Uniyal [‘Ld. DR’] Date of conclusive Hearing : 12/11/2025 Date of Pronouncement : 13/11/2025 ORDER PER G. D. PADMAHSHALI, AM; Instant appeal is filed by the assessee against the DIN & Order No. ITBA/NFAC/S/250/2024-25/1069642318(1) dt. 14/10/2024 passed u/s 250 of the Income-tax Act, 1961 [for short ‘the Act’] by the National Faceless Appeal Centre, Delhi [for short ‘NFAC’] which in turn ascended out of order of assessment passed u/s 143(3) r.w.s. 144B of the Act by the National Faceless e-Asstt. Centre, Delhi [for short ‘AO’] in relation to assessment year 2020-21 [for short ‘AY’] Printed from counselvise.com BARDC Bank Bhatkal Vs NFeAC ITA No.306/PAN/2024, AY: 2020-21 ITAT-Panaji Page 2 of 4 2. Briefly stated facts of the case are that; the assessee is a primary co-operative agricultural and rural development bank operating with the main objective of providing credit facilities to its members. The assessee filed its return of income for the year under consideration on 02/12/2020 declaring an income of ₹67,733/- after claiming deduction u/s 80P of the Act of ₹91,99,132/-. The said return was initially processed u/s 143(1) of the Act on 28/03/2021 assessing total income at ₹79,730/-. Subsequently the case of the assessee selected for scrutiny & consequential assessment was completed u/s 143(3) r.w.s. 144B of the Act assessing total income at ₹1,52,65,272/- owning to denial of u/s 80P deduction claimed for sum of ₹91,99,132/- and addition of interest income claimed to have received by the assessee in the form of ‘reimbursement of subsidized interest’ from Government for promoting co-operative movement. 3. Aggrieved assessee approached the Ld. NFAC. In the first appellate proceedings, the Ld. NFAC adjudicated former twin issues together and allowed the appeal partly for statistical purpose with a direction to Ld. AO to compute & allow eligible 80P deduction to the extent attributable to interest income received by the assessee from business excluding the subsidized interest claimed to have received by the assessee from the Government. Printed from counselvise.com BARDC Bank Bhatkal Vs NFeAC ITA No.306/PAN/2024, AY: 2020-21 ITAT-Panaji Page 3 of 4 4. Still aggrieved, the assessee came in present appeal with the solitary issue challenging the exclusion of subsidized interest received/earned by it during the course of its business activities for the purpose of computation of 80P deduction. 5. We have heard the rival party’s submission and subject to rule 18 perused the material placed on record and considered facts in the light of settled position of law. At the outset we note that, for the want of evidence both tax authorities below for the purpose of computation of 80P deduction disregarded income pertaining to ‘subsidized interest reimbursement’ claimed to have been received as business income by the appellant from the Government. Admittedly first time in the present proceedings the appellant placed on record (Pg 58-60) letters/certificates issued by ‘The Karnataka State Co-Op. Agricultural & Rural Development Bank Ltd.’, [kannada language] and its translation on appellant’s letterhead in support of its claim. These evidences prima-facie reveals that, under the state declared scheme for co-operative movement, the appellant was allowed to extend certain loans and advance them at subsidized interest rate @ 3% p.a. as against then prevailing rate of interest @10.75 p.a. with a guarantee/undertaking that difference of interest shall be reimbursed by the scheme so introduced. Printed from counselvise.com BARDC Bank Bhatkal Vs NFeAC ITA No.306/PAN/2024, AY: 2020-21 ITAT-Panaji Page 4 of 4 6. These letters/certificate being vital for ascertaining the factual position to confirm the claim of the appellant and thus for determining the eligible amount of 80P deduction and resultantly the total income to be assessed. Therefore recording the fact that appellant was deprived of reasonable time to produce these evidence before the tax authorities below, which came handy post culmination of impugned proceedings, we allow the appellant to place on record these as additional evidence u/r 29 (supra) for their consideration by the Ld. AO for computing eligible deduction u/s 80P while giving effect to the remand in pursuance of impugned order. For the stated reasons, we in concurrence of impugned remand direct the Ld. AO to consider these additional evidences for their taxability and eligibility in computing 80P deduction. The grounds are thus stands partly allowed for statistical purposes. 7. In result, the appeal is allowed for statistical purposes. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on the date mentioned hereinbefore. -S/d- -S/d- PAVAN KUMAR GADALE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji/Dt.: 13th November, 2025 Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The CIT(A)/NFAC Concerned 4. PCIT Concerned 5. DR, ITAT, Panaji Bench, Goa 6. Guard File By Order, Sr. Private Secretary / AR ITAT, Panaji. Printed from counselvise.com "