Shri Tifs Credit Co-Operative Society Ltd. , Rajkot V. The Pr. CIT-1, Rajkot, Rajkot

ITA 180/RJT/2022

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 4268 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-01-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 25-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 263; 143(3); 72

Judgement Text

ITA No.180/RJT/2022 Assessment Year: 2017-18 1 IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted through E-Court at Ahmedabad) BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No.180/RJT/2022 Assessment Year: 2017-18 Tifs Credit Co-operative Society Limited, Poonam Flats, Sadar Bazar, Rajkot – 360 001. Gujarat. [PAN – AAAAT 2411 M] Vs. The Principal Commissioner of Income Tax, Rajkot – 1. (Appellant) (Respondent) Assessee by Shri Darshak Thakkar, AR Revenue by Shri Ritesh Parmar, CIT(DR) Da te o f He a r in g 09.01.2024 Da te o f P ro n o u n ce m e n t 17.01.2024 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This appeal is filed by the Assessee against the order dated 23.02.2022 passed by the Principal Commissioner of Income Tax, Rajkot-1 for the Assessment Year 2017-18. 2. The Assessee has raised the following grounds of appeal:- “1. That on the facts and circumstances of the case and in law, the order passed by the Principal Commissioner of Income Tax Rajkot-1 (PCIT), u/s.263 of the Income Tax Act, 1961 (‘the Act’) setting aside the assessment framed u/s.143(3) of the Act as erroneous and prejudicial to the interest of the Revenue is without jurisdiction, bad in law and void ab-initio. 2) That on the facts and circumstances of the case and in law, the PCIT erred in holding that the assessment order is erroneous and prejudicial to interest of revenue on the issue of taxability of income from interest on fixed deposits under the head Income from Other Source and thereby not allowing the deduction claimed u/s.80P of the Income Tax Act, 1961. ITA No.180/RJT/2022 Assessment Year: 2017-18 2 3) That on the facts and circumstances of the case and in law, the PCIT erred in setting aside the aforesaid issue even after recording prima facie finding on the merits of the issue in favour of the appellant. 4) That on the facts and circumstances of the case and in law, the PCIT failed to point out any error in the order of the Assessing Officer in assessing income from interest on fixed deposits, which is sine que non for initiation of proceedings u/s.263 of the Act. 5) Without prejudice, that the PCIT erred on facts and in law in setting aside the assessment order to be redone afresh and not merely setting aside the aforesaid issue of taxability of income from interest on fixed deposits.” 3. The Return of income for Assessment Year 2017-18 was filed by the assessee on 22.05.2017 declaring total income of Rs. Nil after claiming deduction of Rs.27,97,39/-. The assessment was completed under Section 143(3) of the Income Tax Act, 1961 on 27.11.2019 determining total income at Rs. Nil. The PCIT observed that the Mandali/Co-operative Society shown total interest income at Rs.1,01,01,971/- including interest on Fixed Deposit received from the Co-operative Bank in the P&L account and claimed deduction under Section 80P(2)(a)(i)/80P(2)(d) of the Act on entire profit earned during the year under consideration. The Mandali/ Society had surplus funds which were not required for carrying on the business activities of the Mandali. After issuing the show cause notice under Section 263 of the Act on 17.01.2022, the PCIT passed preliminary order under Section 263 of the Act thereby directing the Assessing Officer to make fresh assessment. 4. Being aggrieved by the order under Section 263 of the Act, the assessee is before us. 5. The Ld. AR submitted that for A.Y. 2018-19 in assessee’s own case in ITA No.115/RJT/2023, the Tribunal vide order dated 23.08.2023 quashed the re3visionary order and allowed the appeal of the assessee on the very same issue of claiming deduction under Section 80P)(2)(a)(i)/80P(2)(d) of the Act. Therefore, the Ld. AR submitted that the matter is covered in favour of the assessee. 6. The Ld. DR relied upon the order of the PCIT passed under Section 263 of the Act and relied upon his submissions dated 08.12.2023 which is taken on record. ITA No.180/RJT/2022 Assessment Year: 2017-18 3 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that at the time of passing/completing the Assessment Oder under Section 143(3) of the Act, the issue related to 80P(2)(d) claimed by Credit Co-operative Societies was very well governed by the Hon’ble Gujarat High Court in the case of Surat Vankar Sahkari Sangh Limited, 72 taxmann.com 169 (Gujarat) and this issue was rightly claimed by the assessee at that juncture. Current invocation of Section 263 of the Act does not fulfil the criteria of assessment being erroneous or prejudicial to the interest of Revenue with the second view which is not allowable under Section 263 of the Act and its revisional powers. Hence, as held in earlier Assessment Years, wherein the order under Section 263 of the Act has been quashed in assessee’s own case, the present Assessment Year will also be governed by the same contentions of the Ld. DR taken in submissions dated 08.12.2023, will not be applicable in toto as the assessee’s case is governed by its own order for subsequent Assessment Year. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 17 th January, 2024. . Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 17 th day of January, 2024 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Rajkot Bench, Rajkot