VERSOVA SHANTI CO-OPERATIVE HOUSING LTD, MUMBAI V. PR CIT 25, MUMBAI

ITA 1056/MUM/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1736 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 11-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DEEPAK TIKEKARLD
• Keywords: Revision of order; Revised return
• Section: 263; 143(3); 80P

Judgement Text

ITA NO.1056/MUM/2020 VERSOVA SHANTI CO-OP. HOUSING SOC. LTD. ASSESSMENT YEAR : 2015-16 1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI , , BEFORE HONBLE SHRI AMARJIT SINGH, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.1056/MUM/2020 ( / ASSESSMENT YEAR: 2015-16) VERSOVA SHANTI CO.OP. HOUSING SOC. LTD. PLOT NO.22, VERSOVA SHANTI CHS LTD. RSCI MHADA LAYOUT VERSOVA, ANDHERI (W) MUMBAI-400 053. / VS. PR. C IT - 25 ROOM NO.241,2 ND FLOOR, G-BLOCK, KAUTILYA BHAVAN BANDRA KURLA COMPLEX MUMBAI-400 051. ! ./ ./PAN/GIR NO. AAABV-0199-D ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : SHRI DEEPAK TIKEKAR-LD. AR REVENUE BY : SHRI LALIT DEHIYA -LD.CIT-DR / DATE OF HEARING : 10/12/2020 / DATE OF PRONOUNCEMENT : 10/12/2020 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. BY WAY OF THIS APPEAL THE ASSESSEE CHALLENGES TH E VALIDITY OF REVISIONAL JURISDICTION U/S 263 AS EXERCISED BY LEA RNED PR. COMMISSIONER OF INCOME TAX -25 [PR.CIT ] FOR ASSESSMENT YEAR (AY ) 2015-16 [IN SHORT AY ] VIDE ORDER DATED 13/11/2019. THE EFFECTIVE GRO UND READ AS UNDER: - ITA NO.1056/MUM/2020 VERSOVA SHANTI CO-OP. HOUSING SOC. LTD. ASSESSMENT YEAR : 2015-16 2 1. ON FACTS, IN CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED PR. COMMISSIONER OF INCOME TAX -25, ERRED IN SETTING ASIDE ORDER BY ACIT -25(1) U/S. 143(3) DATED 23.12.2017 BY INVOKING PROVISIONS OF SECTION 263 OF I.T. ACT, 1961. 2. THE REGISTRY HAS NOTED A MINOR DELAY OF 18 DAYS IN THE APPEAL, THE CONDONATION OF WHICH HAS BEEN SOUGHT BY LEARNED AR ON THE STRENGTH OF AFFIDAVIT OF SOCIETY OFFICIALS. AFTER GOING THROUGH THE CONDONATION PETITION AND IN VIEW OF THE FACT THAT THERE WAS A SMALL DELA Y, WE ARE INCLINED TO CONDONE THE DELAY AND PROCEED WITH DISPOSAL OF THE APPEAL, ON MERITS. 3. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING SUBMISSIONS M ADE BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS AS WELL AS DURING APP ELLATE PROCEEDINGS. THE JUDICIAL PRECEDENTS AS CITED DURING THE COURSE OF HEARING HAVE DULY BEEN DELIBERATED UPON. OUR ADJUDICATION TO THE SUBJ ECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 4.1 THE MATERIAL FACTS ARE THAT THE ASSESSEE WAS AS SESSED FOR THE YEAR UNDER CONSIDERATION U/S 143(3) ON 23/12/2017 ACCEPT ING REVISED RETURN OF INCOME FILED AT RS.28.30 LACS. IN THE ASSESSMENT OR DER, WHILE COMPUTING ASSESSEES INCOME, LD. AO HAS ALLOWED DEDUCTION U/S 80-P FOR RS.14.52 LACS. 4.2 SUBSEQUENTLY, LD. PR. CIT, UPON PERUSAL OF CASE RECORDS, OPINED THAT THE ORDER WOULD REQUIRE REVISION U/S 263 SINCE THE DEDUCTION U/S 80P(2)(D) GRANTED BY LD. AO ON ACCOUNT OF INTEREST RECEIVED BY ASSESSEE FROM SARASWAT CO-OP BANK LTD. AS WELL AS F ROM MAHARASHTRA STATE CO-OPERATIVE BANK WAS REQUIRED TO BE DENIED. THE FAILURE TO DO SO HAS RESULTED INTO UNDER ASSESSMENT OF INCOME. ACCOR DINGLY, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE PROPOSING R EVISION OF THE ORDER. ITA NO.1056/MUM/2020 VERSOVA SHANTI CO-OP. HOUSING SOC. LTD. ASSESSMENT YEAR : 2015-16 3 THE ASSESSEE DEFENDED THE ASSESSMENT ORDER, INTER-ALIA, BY SUBMITTING THAT THE STATED CO-OPERATIVE BANKS FROM WHICH THE A SSESSEE EARNED INTEREST INCOME WERE ALSO COOPERATIVE SOCIETIES AND THEREFORE THE DEDUCTION WAS RIGHTLY ALLOWED. FOR THE SAME, THE AT TENTION WAS DRAWN TO THE VARIOUS PROVISIONS OF MAHARASHTRA CO-OP SOCIETI ES ACT, 1961. RELIANCE WAS PLACED ON VARIOUS JUDICIAL DECISIONS W HEREIN SIMILAR DEDUCTION WAS ALLOWED AFTER CONSIDERING THE DECISIO N OF HONBLE SUPREME COURT IN M/S TOTGARS COOPERATIVE SOCIETY LT D. 4.3 HOWEVER, NOT CONVINCED WITH ASSESSEES SUBMISSI ONS AS WELL AS EXPLANATIONS, LD. PR.CIT OPINED THAT DEDUCTION COUL D NOT BE EXTENDED TO INCOME EARNED FROM ANY CO-OPERATIVE BANK. THEREFORE , THE ASSESSMENT ORDER WAS HELD TO BE ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. ACCORDINGLY, LD. AO WAS DIRECTED TO REDO T HE ASSESSMENT IN THE LIGHT OF OBSERVATION MADE IN THE REVISION ORDER. AGGRIEVED AS AFORESAID, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US ASSAILING INVOCATION OF REVISIONAL JURISDICTION U/S 263. 5. UPON CAREFUL CONSIDERATION OF MATERIAL ON RECORD , WE FIND THAT THE ASSESSEE WAS SUBJECTED TO LIMITED SCRUTINY ASSESSME NT VIDE NOTICE DATED 27/07/2016. ONE OF THE REASONS FOR SELECTION OF SCR UTINY WAS DEDUCTION UNDER CHAPTER-VI-A. ACCORDINGLY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS DIRECTED TO EXPLAIN T HE DEDUCTION CLAIMED UNDER CHAPTER-VI-A. THE ASSESSEE, IN ITS SU BMISSIONS DATED 09/08/2016 AS WELL AS 22/12/2017 FILED COMPLETE DET AILS OF INTEREST SO EARNED ALONG WITH NOTE ON DEDUCTION CLAIMED U/S 80P . FINALLY, AFTER CONSIDERING THE SAME, LD. AO CHOSE TO ACCEPT THE SA ME AND THEREFORE, ITA NO.1056/MUM/2020 VERSOVA SHANTI CO-OP. HOUSING SOC. LTD. ASSESSMENT YEAR : 2015-16 4 ALLOWED THE SAME SPECIFICALLY WHILE FRAMING THE ASS ESSMENT. THESE FACTS WOULD SHOW THAT LD. AO WAS CLINCHED WITH THE ISSUE AND HAD TAKEN A POSSIBLE VIEW IN THE MATTER. THE VIEW WAS IN LINE W ITH THE VARIOUS JUDICIAL DECISIONS PREVAILING AT THE TIME OF MAKING THE ASSE SSMENT AND THE SAME COULD NOT BE SAID TO BE PERVERSE OR AGAINST THE LAW , IN ANY MANNER. THERE WAS DUE APPLICATION OF MIND TO THE ISSUE BY L D. AO. THE HONBLE SUPREME COURT IN MALABAR INDUSTRIAL CO. LTD. V/S CIT (243 ITR 83 10/02/2000) HAS HELD THAT THE PHRASE 'PREJUDICIAL TO THE INTERE STS OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVE NUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CA NNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EX AMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMI SSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH TH E COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOU S ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. THE SAID PRINCIPAL HAS BEEN REITERATED BY HONBLE COURT IN ITS SUBSEQUENT JUDGMENT TITLED AS CIT V/S MAX INDIA LTD. (295 ITR 282). SIMILAR PRINCIPAL HAS BEEN FOLLOWED BY JURISDICTION AL HIGH COURT IN GRASIM INDUSTRIES LTD. V/S CIT (321 ITR 92). THE HONBLE DELHI HIGH COURT, CIT V/S VIKAS POLYMERS (194 TAXMAN 57 16/08/2010) OBSERVED THAT AS REGARDS THE SCOPE AND AMBIT OF THE EXPRESSION 'ERRONEOUS', HONBLE BOMBAY HIGH COURT I N CIT VS. GABRIEL INDIA LTD. [1993 203 ITR 108 (BOMBAY)] , HELD WITH REFERENCE TO BLACK'S ITA NO.1056/MUM/2020 VERSOVA SHANTI CO-OP. HOUSING SOC. LTD. ASSESSMENT YEAR : 2015-16 5 LAW DICTIONARY THAT AN 'ERRONEOUS JUDGMENT' MEANS ' ONE RENDERED ACCORDING TO COURSE AND PRACTICE OF COURT, BUT CONT RARY TO LAW, UPON MISTAKEN VIEW OF LAW; OR UPON ERRONEOUS APPLICATION OF LEGAL PRINCIPLES' AND THUS IT IS CLEAR THAT AN ORDER CANNOT BE TERMED AS 'ERRONEOUS' UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN INCOME-TAX OFFICER ACTING IN ACCORDANCE WITH LAW MAKES A CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS 'ERRONEOUS' BY THE COMMISSIONER SIMPLY B ECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN DIFFEREN TLY OR MORE ELABORATELY. THE SECTION DOES NOT VISUALIZE THE SUB STITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME -TAX OFFICER, WHO PASSED THE ORDER UNLESS THE DECISION IS NOT IN ACCO RDANCE WITH LAW. 6. IN VIEW OF THE FOREGOING, THE REVISIONAL JURISDI CTION COULD NOT BE HELD TO BE VALID UNDER LAW. BY QUASHING THE ORDER DATED 13/11/2019, WE ALLOW ASSESSEES APPEAL. 7. THE APPEAL STANDS ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 10 TH DECEMBER, 2020. SD/- SD/- (AMARJIT SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 10/12/2020 SR.PS, JAISY VARGHESE !'! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT ITA NO.1056/MUM/2020 VERSOVA SHANTI CO-OP. HOUSING SOC. LTD. ASSESSMENT YEAR : 2015-16 6 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. ,-$. , . , / DR, ITAT, MUMBAI 6. -/01 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.