SAPHALE PARISAR BIGARSHETI , SAHKARI PATSANSTHA MARYADIT, SAPHALE, MUMBAI V. PCIT-1, THANE

ITA 190/MUM/2023

AI Insights

The case revolves around an appeal by Saphale Parisar Bigarsheti Sahkari Patsanstha Maryadit against the revision order passed by the PCIT, Thane, which set aside the original assessment order under section 143(3) and directed a re-assessment. The PCIT's decision was based on the grounds that the original assessment was erroneous and prejudicial to the interests of the revenue, particularly concerning deductions claimed under section 80P(2)(d) and issues related to section 269SS of the Income Tax Act. The Tribunal examined the validity of the PCIT's revision, focusing on whether the original assessment order was indeed erroneous and whether the PCIT had followed the due process of law, including adequate opportunity for the assessee to respond.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123566 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 19-01-2023
• Other Referred Cases: PCIT, Hubli Vs. Totgar Co-op. Sale Society, Pragati Gramin Bigarsheti Sahakari Patsanstha Maryadit & Others v. PCIT, Kaliandas Udhyog Bhavan Premises Co-operative Society vs. Income-tax Officer, Mumbai, Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT, PCIT Vs Universal Music India P Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: UNMESH NARVEKAR
• Keywords: Recovery proceedings; Revision of order; Opportunity of being heard; Principle of natural justice; Question of law; Set aside
• Section: 147; 56; 143(3); 80P; 13; 2(19)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 190/MUM/2023 Assessment Year: 2017-18 SaphaleParisarBigarshetiSahkariPatsansthaMaryadit, Saphale, Ambika Nagar, Ambika Rice Mill Compound, Tandulwadi Road, Umbarpada, Saphale East, Dist Palghar-401 102. Vs. Pr. CIT-1, Ashar IT Park, 6 th floor, Income Tax Office, Wagle Estate, Thane- 400604. PAN No. AAFAS 4609 H Appellant Respondent Assessee by : Mr. Unmesh Narvekar, AR Revenue by : Dr. Kishor Dhule, CIT-DR Date of Hearing : 20/03/2023 Date of pronouncement : 31/03/2023 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against the revision order dated 28.03.2022 passed by the Ld. Principal Commissioner of Income-tax Thane-1 (in short ‘the PCIT’) for assessment year 2017-18, raising following grounds: 1. The learned Pr. CIT by setting aside the legally an Assessment order u/s 143(3) by the Ld. Assessing 2. The learned Pr. CIT by not giving reasonable time ( only 7 days' time given) to reply show cause notice and also notprovided opportunity of personal hearing and hastily passed the order in just 3 days' time after initial reply cum submission and violated the principle of natural justice. 3. The learned Pr. CIT with pre-conceived notion and ordered to redo the assessment without having any solid reason/groundfor revision. 4. The learned Pr. CIT and passed theuniustified ord when he himself has failed to form anopinion that the order passed by the Ld. AO u/s143(3) was erroneous. 5. The learned Pr. CIT case and various judgments of the Hon'ble High Courts &Hon'ble ITAT Benches where in it was held that power /s 263 is to be used only when both the conditions specified us 263 aresatisfied ie i. the order passed by the AO to be erroneous and ii. it should be prejudicial to the interest of the revenue. 6. The learned that the appellant being co eligible to claim deduction u/s 80(2)(d) of the Act in respect of on fixed deposits earned from co 7. The learned Pr. CIT that the Assessing Officer has allowed deduction u/s 80P(2)(d) of the Act after considering the detailed replies filed by the appellant society during the course of assessment proceedings. 1. The learned Pr. CIT-1, Thane has aggrieved your appellant by setting aside the legally and judiciously passed Assessment order u/s 143(3) by the Ld. Assessing 2. The learned Pr. CIT-1, Thane has aggrieved your appellant by not giving reasonable time ( only 7 days' time given) to reply show cause notice and also notprovided opportunity of nal hearing and hastily passed the order in just 3 days' time after initial reply cum submission and violated the principle of natural justice. learned Pr. CIT-1, Thane erroneously passed the order conceived notion and ordered to redo the assessment without having any solid reason/groundfor 4. The learned Pr. CIT-1, Thane has exceeded his authority and passed theuniustified order without any jurisdiction when he himself has failed to form anopinion that the order passed by the Ld. AO u/s143(3) was erroneous. 5. The learned Pr. CIT-1, Thane has ignored the facts of the case and various judgments of the Hon'ble High Courts e ITAT Benches where in it was held that power /s 263 is to be used only when both the conditions specified us 263 aresatisfied ie i. the order passed by the AO to be erroneous and ii. it should be prejudicial to the interest of the revenue. 6. The learned Pr. CIT-1, Thane ought to have appreciated that the appellant being co-operative credit society was eligible to claim deduction u/s 80(2)(d) of the Act in respect of on fixed deposits earned from co-operative bank. 7. The learned Pr. CIT-1, Thane ought to have appreciated that the Assessing Officer has allowed deduction u/s 80P(2)(d) of the Act after considering the detailed replies filed by the appellant society during the course of assessment proceedings. SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 2 1, Thane has aggrieved your appellant d judiciously passed Assessment order u/s 143(3) by the Ld. Assessing 1, Thane has aggrieved your appellant by not giving reasonable time ( only 7 days' time given) to reply show cause notice and also notprovided opportunity of nal hearing and hastily passed the order in just 3 days' time after initial reply cum submission and violated the 1, Thane erroneously passed the order conceived notion and ordered to redo the assessment without having any solid reason/groundfor 1, Thane has exceeded his authority er without any jurisdiction when he himself has failed to form anopinion that the order 1, Thane has ignored the facts of the case and various judgments of the Hon'ble High Courts e ITAT Benches where in it was held that power /s 263 is to be used only when both the conditions specified us i. the order passed by the AO to be erroneous and ii. it should be prejudicial to the interest of the revenue. 1, Thane ought to have appreciated operative credit society was eligible to claim deduction u/s 80(2)(d) of the Act in respect of have appreciated that the Assessing Officer has allowed deduction u/s 80P(2)(d) of the Act after considering the detailed replies filed by the appellant society during the course of assessment 8. The learned Pr. CIT that the view adopted byAssessing Officer cannot be said to be unsustainable or impossible view. 9. The learned Pr. CIT that the provisions of Section 269SS of the Act are not applicable to the appellant society Mutuality. In any case, applicability of provision u/s 266SS was not withinthe limited scrutiny jurisdiction and hence could not have been made base of revisionus 263 of the Act. 10. Your appellant submits that the order of the P Thane setting aside the order passed by the Ld AO us 143(3) and ordering to redo the assessment andexamining the applicability of section 269SS be set aside or quashed and restore the original order passed by the Ld AO. 11. Your appellant submits out based on the saidorder of the LdPr CIT adjudged void an initio and being invalid have no effect on the original assessment save your appellant from unjustified demand and undue financial hardship. 12. Your appellant also submits & prays that the appeal be admitted by condoning the delay in filing the appeal caused due to prolong illness & subsequent sad demise of the mother of the Chartered Accountant who takes care of the appeal matters ofthe appellant. 13. Your petitioner also submits & prays for either cancelling or dropping or grantingstay against all the assessment, penalty and recovery proceedings initiated or maybe initiated in future against your petitioner in this respect till the disposal of this appe 2. At the outset, the Ld. Counsel of the assessee submitted that the appeal was due to be filed on 20.05.2022 19.01.2023, thus, there was a delay of 244 days in filing the present appeal. He referred to the application of the assessee for 8. The learned Pr. CIT-1, Thane ought to have app that the view adopted byAssessing Officer cannot be said to be unsustainable or impossible view. 9. The learned Pr. CIT-1, Thane ought to have appreciated that the provisions of Section 269SS of the Act are not applicable to the appellant society as it run on theconcept of Mutuality. In any case, applicability of provision u/s 266SS was not withinthe limited scrutiny jurisdiction and hence could not have been made base of revisionus 263 of the Act. 10. Your appellant submits that the order of the P Thane setting aside the order passed by the Ld AO us 143(3) and ordering to redo the assessment andexamining the applicability of section 269SS be set aside or quashed and restore the original order passed by the Ld AO. 11. Your appellant submits that the re-assessment carried out based on the saidorder of the LdPr CIT-1, Thane be adjudged void an initio and being invalid have no effect on the original assessment save your appellant from unjustified demand and undue financial hardship. pellant also submits & prays that the appeal be admitted by condoning the delay in filing the appeal caused due to prolong illness & subsequent sad demise of the mother of the Chartered Accountant who takes care of the appeal matters ofthe appellant. our petitioner also submits & prays for either cancelling or dropping or grantingstay against all the assessment, penalty and recovery proceedings initiated or maybe initiated in future against your petitioner in this respect till the disposal of this appeal At the outset, the Ld. Counsel of the assessee submitted that the appeal was due to be filed on 20.05.2022, whereas filed on there was a delay of 244 days in filing the present appeal. He referred to the application of the assessee for SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 3 1, Thane ought to have appreciated that the view adopted byAssessing Officer cannot be said to 1, Thane ought to have appreciated that the provisions of Section 269SS of the Act are not as it run on theconcept of Mutuality. In any case, applicability of provision u/s 266SS was not withinthe limited scrutiny jurisdiction and hence could not have been made base of revisionus 263 of the Act. 10. Your appellant submits that the order of the Pr. CIT-1, Thane setting aside the order passed by the Ld AO us 143(3) and ordering to redo the assessment andexamining the applicability of section 269SS be set aside or quashed and assessment carried 1, Thane be adjudged void an initio and being invalid have no effect on the original assessment save your appellant from unjustified pellant also submits & prays that the appeal be admitted by condoning the delay in filing the appeal caused due to prolong illness & subsequent sad demise of the mother of the Chartered Accountant who takes care of the our petitioner also submits & prays for either cancelling or dropping or grantingstay against all the assessment, penalty and recovery proceedings initiated or maybe initiated in future against your petitioner in this respect till the At the outset, the Ld. Counsel of the assessee submitted that whereas filed on there was a delay of 244 days in filing the present appeal. He referred to the application of the assessee for seeking condonation of the delay filed by the assessee along with affidavit. He submitted delay occurred due to following (i) Though the knowing the immediate consequences of the order, the assessee did act immediately, (ii) The mother of the Chartered Accountant looking after the Income during this pe presentation and preparation/filing of this appeal. He also lost his mother on 06.10.2022 and there was being in GST matter till December 2022. 2.1 We have heard submission of the rival parties on the issue condonation of delay in filing appeal. In our opinion, there is sufficient cause on the part of the assessee in not filing the present appeal on time. The delay is accordingly condoned and appeal is admitted for adjudication. 3. Briefly stated, facts of t consideration no regular return of income was filed by the assessee. On the basis of the information various banks and (System),a notice u/s 14 ‘the Act’) was issued for the year under consideration. In response seeking condonation of the delay filed by the assessee along with affidavit. He submitted delay occurred due to following (i) Though the order was received through e knowing the immediate consequences of the order, the assessee did act immediately, (ii) The mother of the Chartered Accountant looking after the Income-tax matter was almost bed ridden and critical during this period, therefore he could give time for presentation and preparation/filing of this appeal. He also lost his mother on 06.10.2022 and there was being in GST matter till December 2022. We have heard submission of the rival parties on the issue condonation of delay in filing appeal. In our opinion, there is sufficient cause on the part of the assessee in not filing the present appeal on time. The delay is accordingly condoned and appeal is admitted for adjudication. Briefly stated, facts of the case are that for the year under consideration no regular return of income was filed by the assessee. On the basis of the information analyzed from data collected from processed by the Directorate notice u/s 142(1)(i) of the Income-tax Act, 1961 (in short to the assessee asking to file return of income for the year under consideration. In response, the assessee filed SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 4 seeking condonation of the delay filed by the assessee along with affidavit. He submitted delay occurred due to following reasons: order was received through e-mail, but not knowing the immediate consequences of the order, the (ii) The mother of the Chartered Accountant looking after tax matter was almost bed ridden and critical riod, therefore he could give time for presentation and preparation/filing of this appeal. He also lost his mother on 06.10.2022 and thereafter, he was being in GST matter till December 2022. We have heard submission of the rival parties on the issue condonation of delay in filing appeal. In our opinion, there is sufficient cause on the part of the assessee in not filing the present appeal on time. The delay is accordingly condoned and appeal is he case are that for the year under consideration no regular return of income was filed by the assessee. data collected from Directorate of Income-tax tax Act, 1961 (in short return of income the assessee filed return of income only on 24.02.2018. In the return of income filed the assessee declared gross total income of Rs.48,50,102/ claimed deduction u/s 80P of the Act at Rs.48,50,102/ offered taxable income at Rs. Nil. The gross total income of Rs.48,50,102/- consist members of Rs.16,61,819/ with other co-operative banks of Rs.31,41,927/ commission received from Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) for electricity bill Rs.46,356/-. Against th deduction u/s 80P(2)(a)(i) of Rs.16,61,819/ 80P(2)(c)(i) of Rs.46,356/ Rs.31,41,927/-. In this manner, total deduction under section 80P of Rs.48,50,102/- was claime 4. The Assessing Officer during the course of scrutiny examined the issue of cash deposits maintained by the assessee with Vasai Vikas Sahakari Bank Ltd. during the demonetization period deposit. The assessee justified that said deposits were collected from the customers for deposits of their electricity bills MSEDCL, which was one of the permitted period of demonetization. The Assessing Officer aft accepted the claim of the assessee, return of income only on 24.02.2018. In the return of income filed essee declared gross total income of Rs.48,50,102/ claimed deduction u/s 80P of the Act at Rs.48,50,102/ offered taxable income at Rs. Nil. The gross total income of consisted of interest received from loans given to of Rs.16,61,819/-;interest received from fixed deposits operative banks of Rs.31,41,927/ commission received from Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) for electricity bill . Against the gross total income, the assessee claimed deduction u/s 80P(2)(a)(i) of Rs.16,61,819/-; 80P(2)(c)(i) of Rs.46,356/- and deduction u/s 80P(2)(d) of In this manner, total deduction under section 80P was claimed by the assessee. The Assessing Officer during the course of scrutiny examined the issue of cash deposits of Rs.3,15,000/- in bank account maintained by the assessee with Vasai Vikas Sahakari Bank Ltd. the demonetization period (09.11.2016 to 30 The assessee justified that said deposits were collected from the customers for deposits of their electricity bills which was one of the permitted activities period of demonetization. The Assessing Officer aft accepted the claim of the assessee, but denied the SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 5 return of income only on 24.02.2018. In the return of income filed essee declared gross total income of Rs.48,50,102/- and claimed deduction u/s 80P of the Act at Rs.48,50,102/- and, thus offered taxable income at Rs. Nil. The gross total income of of interest received from loans given to interest received from fixed deposits operative banks of Rs.31,41,927/- and commission received from Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) for electricity bill collection of e gross total income, the assessee claimed deduction u/s deduction u/s 80P(2)(d) of In this manner, total deduction under section 80P The Assessing Officer during the course of scrutiny examined in bank account maintained by the assessee with Vasai Vikas Sahakari Bank Ltd. (09.11.2016 to 30.12.2016) for The assessee justified that said deposits were collected from the customers for deposits of their electricity bills with activities during the period of demonetization. The Assessing Officer after verifying, denied the deduction relevant to commission income received from MSEDCL electricity bill and accordingly made addition at 4.1 Subsequently, in the case of the assessee an internal audit objection was raised by the internal audit Department, to the effect that deduction allowed to the assessee for interest income earned on deposits/investment with co bank amounting to Rs.31,41,927/ claimed u/s 80P(2)(d) of the Act income attributable to the activities of the assessee society internal audit party also relied on the decision of Hon’ble Su Court in the case of Totgar Co 283(SC) and Karnataka 100069/2016 dated 5/01/2017. accepted by the Assessing Officer and it was submitted that Tribunal in the case of operative Society vs. Income taxmann.com15 (Mumbai operative Banks has been held from credit co-operative so CCIT, Pune, the Ld. PCIT was of the view that action of the Assessing Officer in allowing the deduction of 80P(2)(d) in respect of interest received on fixed deposits with other co-operative bank was liable for tax other sources’ in terms of section 56 of the Act. The Ld. PCIT commission income received from MSEDCL electricity made addition at Rs.46,356/-. Subsequently, in the case of the assessee an internal audit objection was raised by the internal audit team of Income to the effect that deduction allowed to the assessee for interest income earned on deposits/investment with co ank amounting to Rs.31,41,927/- and on which claimed u/s 80P(2)(d) of the Act, was not allowable as same was not income attributable to the activities of the assessee society internal audit party also relied on the decision of Hon’ble Su Court in the case of Totgar Co-operative Society vs ITO 322 ITR Karnataka High Court, Dharwad Bench 100069/2016 dated 5/01/2017. This audit objection was not accepted by the Assessing Officer and it was submitted that in the case of KaliandasUdhyog Bhavan Premises operative Society vs. Income-tax Officer, Mumbai 94 taxmann.com15 (Mumbai-Trib.),the interest received from Co has been held in the character of interest received operative society. However, on the direction of the Ld. the Ld. PCIT was of the view that action of the Assessing Officer in allowing the deduction of Rs.31,41,927/ 80P(2)(d) in respect of interest received on fixed deposits with other nk was liable for tax under the head ‘ in terms of section 56 of the Act. The Ld. PCIT SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 6 commission income received from MSEDCL electricity Subsequently, in the case of the assessee an internal audit team of Income-tax to the effect that deduction allowed to the assessee for interest income earned on deposits/investment with co-operative which deduction was as same was not income attributable to the activities of the assessee society. The internal audit party also relied on the decision of Hon’ble Supreme operative Society vs ITO 322 ITR Bench in ITA No. This audit objection was not accepted by the Assessing Officer and it was submitted that KaliandasUdhyog Bhavan Premises Co- tax Officer, Mumbai 94 he interest received from Co- character of interest received ciety. However, on the direction of the Ld. the Ld. PCIT was of the view that action of the 31,41,927/- u/s 80P(2)(d) in respect of interest received on fixed deposits with other under the head ‘income from in terms of section 56 of the Act. The Ld. PCIT accordingly issued show cause notice to the assessee u/s 263 of the Act and after taking into consideration submission of the assessee held the assessment order passed by the Assessing Officer as erroneous in so far as prejudicial to the interest of the Revenue observing as under: “5. I have carefully considered the detalls submitted by the assessee. Since, the interest received of Rs. 31,41,927 the assessee are from Investments made with Co Banks and not from any other Co of deduction u/s.BOP(2)(d) of the Act cannot be allowed by treating the same as the income attributable to the scivitas of the assesse 31,41,927/- varlous Co-op Banks Is not allowable to the assessee within the provisions of section BOP(2)d) of the I.T. Act, 1961 which reads as under "(d) in respect of any income by way of interest or dividends derived by the co any other cooperative Society, the whole of such income" 5.1The purpose of granting deduction us. 80P was to encourage the creditfac were not willing or were not able to function.The obiect of the society to serve its members by offering the credit facilities is the purpose for which the deduction is available. It is for this purpose 80P(2)(d) has any surplus of one society may be utilized by other Society to serve their Members. The interest on deposits made with the banks has not been made eligible for deduction us. 80P because of lack of mutuality criteria. Also, vide Finance Act 2006, deduction from income of Co operativeBanks as per the provisions of Section 80P of the Act, has been withdrawn by way of insertion of Section 80P(4) w.e.f. 1/4/2007 which differentiates a co bank in comparison to co that a co-operative bank is a commercial bank and does not accordingly issued show cause notice to the assessee u/s 263 of the after taking into consideration submission of the assessee e assessment order passed by the Assessing Officer as erroneous in so far as prejudicial to the interest of the Revenue I have carefully considered the detalls submitted by the assessee. Since, the interest received of Rs. 31,41,927 the assessee are from Investments made with Co Banks and not from any other Co-Operative Socletles, clalm of deduction u/s.BOP(2)(d) of the Act cannot be allowed by treating the same as the income attributable to the scivitas of Society. Therefore amount of RS. being Interest recelved from Investment with op Banks Is not allowable to the assessee within the provisions of section BOP(2)d) of the I.T. Act, 1961 which reads as under "(d) in respect of any income by way of interest or dividends derived by the co-operative soclety from Its investments with any other cooperative Society, the whole of such income" 5.1The purpose of granting deduction us. 80P was to encourage the creditfacilities in rural areas where the banks were not willing or were not able to function.The obiect of the society to serve its members by offering the credit facilities is the purpose for which the deduction is available. It is for this purpose 80P(2)(d) has been inserted in the Act to ensure that any surplus of one society may be utilized by other Society to serve their Members. The interest on deposits made with the banks has not been made eligible for deduction us. 80P because of lack of mutuality criteria. Also, vide Finance Act 2006, deduction from income of Co operativeBanks as per the provisions of Section 80P of the Act, has been withdrawn by way of insertion of Section 80P(4) w.e.f. 1/4/2007 which differentiates a co bank in comparison to co-operative society. It is thus clear operative bank is a commercial bank and does not SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 7 accordingly issued show cause notice to the assessee u/s 263 of the after taking into consideration submission of the assessee, e assessment order passed by the Assessing Officer as erroneous in so far as prejudicial to the interest of the Revenue I have carefully considered the detalls submitted by the assessee. Since, the interest received of Rs. 31,41,927/- by the assessee are from Investments made with Co-operative Operative Socletles, clalm of deduction u/s.BOP(2)(d) of the Act cannot be allowed by treating the same as the income attributable to the scivitas of being Interest recelved from Investment with op Banks Is not allowable to the assessee within the provisions of section BOP(2)d) of the I.T. Act, 1961 which "(d) in respect of any income by way of interest or dividends operative soclety from Its investments with any other cooperative Society, the whole of such income" 5.1The purpose of granting deduction us. 80P was to ilities in rural areas where the banks were not willing or were not able to function.The obiect of the society to serve its members by offering the credit facilities is the purpose for which the deduction is available. It is for this been inserted in the Act to ensure that any surplus of one society may be utilized by other Society to serve their Members. The interest on deposits made with the banks has not been made eligible for deduction us. 80P Also, vide Finance Act 2006, deduction from income of Co- operativeBanks as per the provisions of Section 80P of the Act, has been withdrawn by way of insertion of Section 80P(4) w.e.f. 1/4/2007 which differentiates a co-operative operative society. It is thus clear operative bank is a commercial bank and does not fall under the purview of a Co income is not eligible for deduction u/s. 80P(2)(d) of the Income-tax Act,1961. Hence in view of th deduction is required to be disallowed and added back to income. The Karnataka High Court in the case of PCIT, Hubli Vs. Totgar Co-op. Sale Society 395 IT 611 dated 16.06.2017 (ITA No. 100066/2016) has decided the issue in favour of the department by holding that the interest income earned by way of deposits of surplus funds In co not change its character and thus clause (d of section 80P(2) of the Act, would not apply in these circumstances Aggrieved with the decision Vs. TotgarCo op. Sale Society 395 IT 611 dated 16.06,2017 (IT°A No. 100066/2016)) the assessee has filed SLP which Is pending and as the Issue Is still sub 6.Considering the above mentioned facts, I am of th that theassessment u/s 143(3) made by the A.0. dated 21.11.2019 Is prejudic revenue. I therefore, set isle the order of the AO passed u/s 143(3) with the direction to examine the appllcablity of provisions of section SOP(2)(4) and 269ss of Act, 1961 and to redo the assessment af adequate opportunity to the assessee. 5. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record issue in dispute is whether the assessment order passed by the Assessing Officer is erroneous in so far as prejudicial to the interest of the revenue on two accounts, 80P(2)(d) od the Act wrongly, u/s 269SS of the Act. As far as first reason of 263 proceedings is concerned, the Ld. Counsel of the assessee contended that similar action u/s 263 in the case fall under the purview of a Co-operative Society and interest income is not eligible for deduction u/s. 80P(2)(d) of the tax Act,1961. Hence in view of the above, the said deduction is required to be disallowed and added back to The Karnataka High Court in the case of PCIT, Hubli Vs. op. Sale Society 395 IT 611 dated 16.06.2017 (ITA No. 100066/2016) has decided the issue in favour of the epartment by holding that the interest income earned by way of deposits of surplus funds In co-operative bank does not change its character and thus clause (d of section 80P(2) of the Act, would not apply in these circumstances Aggrieved with the decision of the Karnataka High Court (PCIT, Hubli Vs. TotgarCo op. Sale Society 395 IT 611 dated 16.06,2017 (IT°A No. 100066/2016)) the assessee has filed SLP which Is pending and as the Issue Is still sub-Judice. 6.Considering the above mentioned facts, I am of th that theassessment u/s 143(3) made by the A.0. dated 21.11.2019 Is prejudicial & erroneous to the interests of the revenue. I therefore, set isle the order of the AO passed u/s 143(3) with the direction to examine the appllcablity of f section SOP(2)(4) and 269ss ofvhe Income Tax 61 and to redo the assessment after, affording adequate opportunity to the assessee.” We have heard rival submission of the parties on the issue dispute and perused the relevant material on record issue in dispute is whether the assessment order passed by the Assessing Officer is erroneous in so far as prejudicial to the interest of the revenue on two accounts, firstly, allowing deduction u/s 80P(2)(d) od the Act wrongly, secondly, non-initiation of penalty u/s 269SS of the Act. As far as first reason of 263 proceedings is he Ld. Counsel of the assessee contended that similar the cases of other co-operative societies has been SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 8 operative Society and interest income is not eligible for deduction u/s. 80P(2)(d) of the e above, the said deduction is required to be disallowed and added back to The Karnataka High Court in the case of PCIT, Hubli Vs. op. Sale Society 395 IT 611 dated 16.06.2017 (ITA No. 100066/2016) has decided the issue in favour of the epartment by holding that the interest income earned by operative bank does not change its character and thus clause (d of section 80P(2) of the Act, would not apply in these circumstances Aggrieved of the Karnataka High Court (PCIT, Hubli Vs. TotgarCo op. Sale Society 395 IT 611 dated 16.06,2017 (IT°A No. 100066/2016)) the assessee has filed SLP which Is 6.Considering the above mentioned facts, I am of the opinion that theassessment u/s 143(3) made by the A.0. dated al & erroneous to the interests of the revenue. I therefore, set isle the order of the AO passed u/s 143(3) with the direction to examine the appllcablity of he Income Tax ter, affording We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. Before us, the issue in dispute is whether the assessment order passed by the Assessing Officer is erroneous in so far as prejudicial to the interest , allowing deduction u/s initiation of penalty u/s 269SS of the Act. As far as first reason of 263 proceedings is he Ld. Counsel of the assessee contended that similar operative societies has been vacated by the Pune Bench of 303/Pun/2022 in the case of BigarshetiSahakariPatsansthaMaryadit& Others v. PCIT Counsel submitted that the co operative societies and therefore, the interest received from de with co-operative banks has been correctly claimed as deduction u/s 80P(2)(d) of the Act. The Ld. DR on the other hand, relied on the decision of the Karnataka High Court in the case of Totgar Co-op Sales Society 393 ITR 611 PCIT in the impugned order. We find that deduction u/s 80P(d) of the Act has been dealt by the Tribunal in the case of Pragati Gramin BigarshetiSahakariPatsansthaMaryadit& Others (supra) and action of the PCIT u/s 263 has bee overturned.The relevant finding of the Tribunal is reproduced as under: “6. Coming to the cases of eligibility of deduction u/s.80P(2)(d), the respective assessees credit societies engaged in providing credit facilities to its members. The ld. PCIT has held the assessment order to be erroneous and prejudicial to the interest of the Revenue only on the ground that the claim of deduction u/s.80P on int income was not in order. In this regard, it is observed that though co-operative banks, other than primary agricultural credit society or a primary co development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a cooperative society on interest income on investments/deposits parked with a co which is a registered co of the Act, defining co vacated by the Pune Bench of the Tribunal in ITA No. in the case of Pragati Gramin BigarshetiSahakariPatsansthaMaryadit& Others v. PCIT Counsel submitted that the co-operative banks are primarily co operative societies and therefore, the interest received from de operative banks has been correctly claimed as deduction u/s 80P(2)(d) of the Act. The Ld. DR on the other hand, relied on the decision of the Karnataka High Court in the case of op Sales Society 393 ITR 611 (supra) cited by PCIT in the impugned order. We find that the issue deduction u/s 80P(d) of the Act has been dealt by the Tribunal in the case of Pragati Gramin BigarshetiSahakariPatsansthaMaryadit& Others (supra) and action of the PCIT u/s 263 has bee he relevant finding of the Tribunal is reproduced as 6. Coming to the cases of eligibility of deduction u/s.80P(2)(d), the respective assessees are Cooperative credit societies engaged in providing credit facilities to its members. The ld. PCIT has held the assessment order to be erroneous and prejudicial to the interest of the Revenue only on the ground that the claim of deduction u/s.80P on int income was not in order. In this regard, it is observed that operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to tion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a cooperative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 9 the Tribunal in ITA No. Pragati Gramin BigarshetiSahakariPatsansthaMaryadit& Others v. PCIT.The Ld. operative banks are primarily co- operative societies and therefore, the interest received from deposits operative banks has been correctly claimed as deduction u/s 80P(2)(d) of the Act. The Ld. DR on the other hand, relied on the decision of the Karnataka High Court in the case of PCIT v. (supra) cited by the Ld. the issue of claim of deduction u/s 80P(d) of the Act has been dealt by the Tribunal in the case of Pragati Gramin BigarshetiSahakariPatsansthaMaryadit& Others (supra) and action of the PCIT u/s 263 has been he relevant finding of the Tribunal is reproduced as 6. Coming to the cases of eligibility of deduction are Cooperative credit societies engaged in providing credit facilities to its members. The ld. PCIT has held the assessment order to be erroneous and prejudicial to the interest of the Revenue only on the ground that the claim of deduction u/s.80P on interest income was not in order. In this regard, it is observed that operative banks, other than primary agricultural operative agricultural and rural development bank, are not eligible for deduction pursuant to tion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a cooperative society on interest income on operative bank, ive society as per section 2(19) operative society to mean a co- operative society registered under the Co Act, 1912 or under any law for the time being in force. The assessees are also Co 7. Similar view has been taken by the Pune Benches of the Tribunal in several cases including The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT (ITA No.203/PUN/2019, order dated 16 8. In view of the fact that the Pune Benches of t series of decisions have held that the assessees are entitled to deduction u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income, we hold that the impugned orders cannot be sustained. All the orders are, therefore, overturned. 5.1 We find that in view of various decisions discussed by the Tribunal (supra), the action of the Assessing Officer in allowing deduction u/s 80P(2)(d) is not being erroneous PCIT to the extent is set aside. As far as th PCIT for examining concerned,we find that the Ld. PCIT has nowhere issued any show cause to the assessee for invoking provision of section 269SS and therefore any such action by the Ld. PCIT is not justified being in violation of the principles of natural justice. Bombay High Court in the case of PCIT Vs Universal Music India P Ltd in ITA 238 of 2018 in judgment dated 19/04/22 held that if particular issue has not been raised in show cause notice issued u/s 263, then assessment order can’t be revised to that extent. The relevant finding of the Hon’ble high court is reproduced as under: operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessees are also Co-operative society registered. 7. Similar view has been taken by the Pune Benches of the Tribunal in several cases including The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT (ITA No.203/PUN/2019, order dated 16-11-2022). 8. In view of the fact that the Pune Benches of the Tribunal in series of decisions have held that the assessees are entitled to deduction u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income, we hold that the impugned orders cannot be sustained. All the orders are, therefore, overturned. d that in view of various decisions discussed by the the action of the Assessing Officer in allowing deduction u/s 80P(2)(d) is not being erroneous, the order of the Ld. PCIT to the extent is set aside. As far as the direction of the Ld. for examining the applicability of section 269SS is e find that the Ld. PCIT has nowhere issued any show cause to the assessee for invoking provision of section 269SS and therefore any such action by the Ld. PCIT is not justified being in iolation of the principles of natural justice. We find the Bombay High Court in the case of PCIT Vs Universal Music India P Ltd in ITA 238 of 2018 in judgment dated 19/04/22 if particular issue has not been raised in show cause notice issued u/s 263, then assessment order can’t be revised to that . The relevant finding of the Hon’ble high court is reproduced SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 10 operative Societies Act, 1912 or under any law for the time being in force. The ered. 7. Similar view has been taken by the Pune Benches of the Tribunal in several cases including The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT (ITA No.203/PUN/2019, he Tribunal in series of decisions have held that the assessees are entitled to deduction u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income, we hold that the impugned orders cannot be sustained. All the orders are, therefore, overturned.” d that in view of various decisions discussed by the the action of the Assessing Officer in allowing the order of the Ld. e direction of the Ld. the applicability of section 269SS is e find that the Ld. PCIT has nowhere issued any show cause to the assessee for invoking provision of section 269SS and therefore any such action by the Ld. PCIT is not justified being in We find the Hon’ble Bombay High Court in the case of PCIT Vs Universal Music India P Ltd in ITA 238 of 2018 in judgment dated 19/04/22 has if particular issue has not been raised in show cause notice issued u/s 263, then assessment order can’t be revised to that . The relevant finding of the Hon’ble high court is reproduced “7. It is true that the Apex Court in Amitabh Bacchan (supra) has held, all that CIT is required to do before r decision and not before commencing the enquiry, CIT must give the assessee an opportunity of being heard. It is true that the Judgment also says no notice is required to be issued. But in the case at hand, there is a finding of fact by the ITAT that no show cause notice was issued and no issue was ever raised by the CIT regarding payments made to persons specified under Section 40A(2)(b) of the Act before reaching his decision in the Order dated 20th March, 2013. If that was not correct certainl mentioned that an opportunity was given and in any case, if there were any minutes or notings in the file, revenue would have produced those details before the ITAT. 8. In Amitabh Bachchan (supra), the Apex Court came to a had not even recorded any findings that in the course of the suo motu revisional proceedings opportunity of hearing was not offered to the assessee and that the assessee was denied an opportunity to contest the facts on the basis of which the CIT had come to its conclusions as recorded in his order under Section 263 of the Act. It will be useful to reproduce paragraphs 10, 11 and 13 of Amitabh Bachchan (supra) and the same read as under : “10. Reverting to the specific provisions of Secti seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the Revenue is the basic pre of jurisdiction under Section 263 of the Ac conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice which is implicit in the requirement cast by the Section to give the assessee an opportunity of being heard. It is in the context of the above position that this Court has repeatedly held that unlike the power of reopening an assessment under Section 147 of the Act, the power of revision under Secti notice to show cause. In fact, Section 263 has been understood not to require any specific show cause notice to be served on the assessee. Rather, what is required under the said provision is an opportunity of he assessee. The two requirements are different; the first would comprehend a prior notice detailing the specific grounds on 7. It is true that the Apex Court in Amitabh Bacchan (supra) has held, all that CIT is required to do before reaching his decision and not before commencing the enquiry, CIT must give the assessee an opportunity of being heard. It is true that the Judgment also says no notice is required to be issued. But in the case at hand, there is a finding of fact by that no show cause notice was issued and no issue was ever raised by the CIT regarding payments made to persons specified under Section 40A(2)(b) of the Act before reaching his decision in the Order dated 20th March, 2013. If that was not correct certainly the order of the CIT would have mentioned that an opportunity was given and in any case, if there were any minutes or notings in the file, revenue would have produced those details before the ITAT. 8. In Amitabh Bachchan (supra), the Apex Court came to a finding that ITAT had not even recorded any findings that in the course of the suo motu revisional proceedings opportunity of hearing was not offered to the assessee and that the assessee was denied an opportunity to contest the facts on the basis of h the CIT had come to its conclusions as recorded in his order under Section 263 of the Act. It will be useful to reproduce paragraphs 10, 11 and 13 of Amitabh Bachchan (supra) and the same read as under : “10. Reverting to the specific provisions of Section 263 of the Act what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the Revenue is the basic precondition for exercise of jurisdiction under Section 263 of the Act. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice which is implicit in the requirement cast by the Section to give the assessee an opportunity of being heard. It is in the context of the above position that this Court has repeatedly held that unlike the power of reopening an assessment under Section 147 of the Act, the power of revision under Section 263 is not contingent on the giving of a notice to show cause. In fact, Section 263 has been understood not to require any specific show cause notice to be served on the assessee. Rather, what is required under the said provision is an opportunity of hearing to the assessee. The two requirements are different; the first would comprehend a prior notice detailing the specific grounds on SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 11 7. It is true that the Apex Court in Amitabh Bacchan (supra) has held, all that CIT is required to do before reaching his decision and not before commencing the enquiry, CIT must give the assessee an opportunity of being heard. It is true that the Judgment also says no notice is required to be issued. But in the case at hand, there is a finding of fact by that no show cause notice was issued and no issue was ever raised by the CIT regarding payments made to persons specified under Section 40A(2)(b) of the Act before reaching his decision in the Order dated 20th March, 2013. If y the order of the CIT would have mentioned that an opportunity was given and in any case, if there were any minutes or notings in the file, revenue would have produced those details before the ITAT. 8. In Amitabh finding that ITAT had not even recorded any findings that in the course of the suo motu revisional proceedings opportunity of hearing was not offered to the assessee and that the assessee was denied an opportunity to contest the facts on the basis of h the CIT had come to its conclusions as recorded in his order under Section 263 of the Act. It will be useful to reproduce paragraphs 10, 11 and 13 of Amitabh Bachchan (supra) and the same read as under : “10. Reverting to the on 263 of the Act what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the condition for exercise t. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice which is implicit in the requirement cast by the Section to give the assessee an opportunity of being heard. It is in the context of the above position that this Court has repeatedly held that unlike the power of reopening an assessment under Section 147 of the Act, the power of on 263 is not contingent on the giving of a notice to show cause. In fact, Section 263 has been understood not to require any specific show cause notice to be served on the assessee. Rather, what is required under aring to the assessee. The two requirements are different; the first would comprehend a prior notice detailing the specific grounds on which revision of the assessment order is tentatively being proposed. Such a notice is not required. What is contemplated be afforded to the assessee. Failure to give such an opportunity would render the revisional order legally fragile not on the ground of lack of jurisdiction but on the ground of violation of principles of na regard may be illustratively made to the decisions of this Court in Gita Devi Aggarwal vs. CIT [1970] 76 ITR 496 and in CIT v. Electro House [1971] 82 ITR 824 (SC). Paragraph 4 of the decision in Electro House (supra) being issue indicated above may be usefully reproduced hereunder: “This section unlike Section 34 does not prescribe any notice to be given. It only requires the Commissioner to give an opportunity to the assessee of being heard. The section does not speak of any notice. It is unfortunate that the High Court failed to notice the difference in language between Sections 33 jurisdiction to proceed under Section 34, the notice as prescribed in that section is a con such notice is contemplated by Section 33 of the Commissioner to proceed under Section 33 dependent on the fulfilment of any condition precedent. All that he is required to do before reaching his decisi before commencing the enquiry, he must give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary. Those requirements have nothing to do with the jurisdiction of the Commissioner. They pertain to principles of natural justice may affect the legality of the order made but that does not affect the jurisdiction of the Commissioner. At present we are not called upon to consider whether the order made by the because of the contravention of any of the principles of natural justice. The scope of these appeals is very narrow. All that we have to see is whether before assuming jurisdiction the Commissioner was required to issue a notice and if he was so required what that notice should have contained? Our answer to that question has already been made clear. In our judgment no notice was required to be issued by the Commissioner before assuming jurisdiction to proceed under Section 33 notice should contain does not arise for consideration. It is which revision of the assessment order is tentatively being proposed. Such a notice is not required. What is contemplated by Section 263, is an opportunity of hearing to be afforded to the assessee. Failure to give such an opportunity would render the revisional order legally fragile not on the ground of lack of jurisdiction but on the ground of violation of principles of natural justice. Reference in this regard may be illustratively made to the decisions of this Court in Gita Devi Aggarwal vs. CIT [1970] 76 ITR 496 and in CIT v. Electro House [1971] 82 ITR 824 (SC). Paragraph 4 of the decision in Electro House (supra) being illumination of the issue indicated above may be usefully reproduced hereunder: “This section unlike Section 34 does not prescribe any notice to be given. It only requires the Commissioner to give an opportunity to the assessee of being heard. The does not speak of any notice. It is unfortunate that the High Court failed to notice the difference in language between Sections 33-B and 34. For the assumption of jurisdiction to proceed under Section 34, the notice as prescribed in that section is a condition precedent. But no such notice is contemplated by Section 33-B. The jurisdiction of the Commissioner to proceed under Section 33 dependent on the fulfilment of any condition precedent. All that he is required to do before reaching his decisi before commencing the enquiry, he must give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary. Those requirements have nothing to do with the jurisdiction of the Commissioner. They pertain to the region of natural justice. Breach of the principles of natural justice may affect the legality of the order made but that does not affect the jurisdiction of the Commissioner. At present we are not called upon to consider whether the order made by the Commissioner is vitiated because of the contravention of any of the principles of natural justice. The scope of these appeals is very narrow. All that we have to see is whether before assuming jurisdiction the Commissioner was required to issue a notice nd if he was so required what that notice should have contained? Our answer to that question has already been made clear. In our judgment no notice was required to be issued by the Commissioner before assuming jurisdiction to proceed under Section 33-B. Therefore the question what that notice should contain does not arise for consideration. It is SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 12 which revision of the assessment order is tentatively being proposed. Such a notice is not required. What is by Section 263, is an opportunity of hearing to be afforded to the assessee. Failure to give such an opportunity would render the revisional order legally fragile not on the ground of lack of jurisdiction but on the ground of tural justice. Reference in this regard may be illustratively made to the decisions of this Court in Gita Devi Aggarwal vs. CIT [1970] 76 ITR 496 and in CIT v. Electro House [1971] 82 ITR 824 (SC). Paragraph 4 of illumination of the issue indicated above may be usefully reproduced hereunder: “This section unlike Section 34 does not prescribe any notice to be given. It only requires the Commissioner to give an opportunity to the assessee of being heard. The does not speak of any notice. It is unfortunate that the High Court failed to notice the difference in language B and 34. For the assumption of jurisdiction to proceed under Section 34, the notice as dition precedent. But no B. The jurisdiction of the Commissioner to proceed under Section 33-B is not dependent on the fulfilment of any condition precedent. All that he is required to do before reaching his decision and not before commencing the enquiry, he must give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary. Those requirements have nothing to do with the jurisdiction of the Commissioner. the region of natural justice. Breach of the principles of natural justice may affect the legality of the order made but that does not affect the jurisdiction of the Commissioner. At present we are not called upon to consider Commissioner is vitiated because of the contravention of any of the principles of natural justice. The scope of these appeals is very narrow. All that we have to see is whether before assuming jurisdiction the Commissioner was required to issue a notice nd if he was so required what that notice should have contained? Our answer to that question has already been made clear. In our judgment no notice was required to be issued by the Commissioner before assuming jurisdiction to erefore the question what that notice should contain does not arise for consideration. It is not necessary nor proper for us in this case to consider as to the nature of the enquiry to be held under Section 33 Therefore, we refrain from spelling out wha natural justice should be observed in an enquiry under Section 33B. This Court in Gita Devi v. CIT, West Bengal ruled that Section 33 notice to be served on the assessee as in the case of Section 34. Section 33 heard should be given to the assessee and the stringent requirement of service of notice under Section 34 cannot, therefore, be applied to a proceeding under Section 33 (Page 827828). [Note: Sec Income Tax Act, 1922 corresponds to Section 263 and Section 147 of the Income Tax Act, 1961] 11. It may be that in a given case and in most cases it is so done a notice proposing the revisional exercise is given to the asses indicating therein broadly or even specifically the grounds on which the exercise is felt necessary. But there is nothing in the section (Section 263) to raise the said notice to the status of a mandatory show cause notice affecting the initiation of the exercise in the absence thereof or to require the C.I.T. to confine himself to the terms of the notice and foreclosing consideration of any other issue or question of fact. This is not the purport of Section 263. Of course, there can be no dispute that on consideration of all relevant facts, a full opportunity to controvert the same and to explain the circumstances surrounding such facts, as may be considered relevant by the assessee, must be afforded the finalization of the decision. 13. The above ground which had led the learned Tribunal to interfere with the order of the learned C.I.T. seems to be contrary to the settled position in law, as indicated above and the two d in Gita Devi Aggarwal (supra) and M/s Electro House (supra). The learned Tribunal in its order dated 28th August, 2007 had not recorded any finding that in course of the suo motu revisional proceedings, hearing of which was spread over many days and attended to by the authorized representative of the assessee, opportunity of hearing was not afforded to the assessee and that the assessee was denied an opportunity to contest the facts on the basis of which the learned C.I.T. had come to recorded in the order dated 20th March, 2006. Despite the not necessary nor proper for us in this case to consider as to the nature of the enquiry to be held under Section 33 Therefore, we refrain from spelling out what principles of natural justice should be observed in an enquiry under B. This Court in Gita Devi v. CIT, West Bengal ruled that Section 33-B does not in express terms require a notice to be served on the assessee as in the case of Section ection 33-B merely requires that an opportunity of being heard should be given to the assessee and the stringent requirement of service of notice under Section 34 cannot, therefore, be applied to a proceeding under Section 33 828). [Note: Section 33-B and Section 34 of the Income Tax Act, 1922 corresponds to Section 263 and Section 147 of the Income Tax Act, 1961] 11. It may be that in a given case and in most cases it is so done a notice proposing the revisional exercise is given to the asses indicating therein broadly or even specifically the grounds on which the exercise is felt necessary. But there is nothing in the section (Section 263) to raise the said notice to the status of a mandatory show cause notice affecting the initiation of he exercise in the absence thereof or to require the C.I.T. to confine himself to the terms of the notice and foreclosing consideration of any other issue or question of fact. This is not the purport of Section 263. Of course, there can be no dispute that while the C.I.T. is free to exercise his jurisdiction on consideration of all relevant facts, a full opportunity to controvert the same and to explain the circumstances surrounding such facts, as may be considered relevant by the assessee, must be afforded to him by the C.I.T. prior to the finalization of the decision. 13. The above ground which had led the learned Tribunal to interfere with the order of the learned C.I.T. seems to be contrary to the settled position in law, as indicated above and the two decisions of this Court in Gita Devi Aggarwal (supra) and M/s Electro House (supra). The learned Tribunal in its order dated 28th August, 2007 had not recorded any finding that in course of the suo motu revisional proceedings, hearing of which was spread er many days and attended to by the authorized representative of the assessee, opportunity of hearing was not afforded to the assessee and that the assessee was denied an opportunity to contest the facts on the basis of which the learned C.I.T. had come to his conclusions as recorded in the order dated 20th March, 2006. Despite the SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 13 not necessary nor proper for us in this case to consider as to the nature of the enquiry to be held under Section 33-B. t principles of natural justice should be observed in an enquiry under B. This Court in Gita Devi v. CIT, West Bengal B does not in express terms require a notice to be served on the assessee as in the case of Section B merely requires that an opportunity of being heard should be given to the assessee and the stringent requirement of service of notice under Section 34 cannot, therefore, be applied to a proceeding under Section 33-B.” B and Section 34 of the Income Tax Act, 1922 corresponds to Section 263 and Section 147 of the Income Tax Act, 1961] 11. It may be that in a given case and in most cases it is so done a notice proposing the revisional exercise is given to the assessee indicating therein broadly or even specifically the grounds on which the exercise is felt necessary. But there is nothing in the section (Section 263) to raise the said notice to the status of a mandatory show cause notice affecting the initiation of he exercise in the absence thereof or to require the C.I.T. to confine himself to the terms of the notice and foreclosing consideration of any other issue or question of fact. This is not the purport of Section 263. Of course, there can be no while the C.I.T. is free to exercise his jurisdiction on consideration of all relevant facts, a full opportunity to controvert the same and to explain the circumstances surrounding such facts, as may be considered relevant by to him by the C.I.T. prior to the finalization of the decision. 13. The above ground which had led the learned Tribunal to interfere with the order of the learned C.I.T. seems to be contrary to the settled position in ecisions of this Court in Gita Devi Aggarwal (supra) and M/s Electro House (supra). The learned Tribunal in its order dated 28th August, 2007 had not recorded any finding that in course of the suo motu revisional proceedings, hearing of which was spread er many days and attended to by the authorized representative of the assessee, opportunity of hearing was not afforded to the assessee and that the assessee was denied an opportunity to contest the facts on the basis of his conclusions as recorded in the order dated 20th March, 2006. Despite the absence of any such finding in the order of the learned Tribunal, before holding the same to be legally unsustainable the Court will have to be satisfied that in the course of th revisional proceeding the assessee, actually and really, did not have the opportunity to contest the facts on the basis of which the learned C.I.T. had concluded that the order of the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. The above is the question to which the Court, therefore, will have to turn to.” 9. In the case at hand, there is a finding by the Tribunal, as noted earlier, that no issue was raised by the CIT in respect of particulars of payment made to persons and even the show cause notice is silent about that. 10. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are pr test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law. 5.2 Respectfully following the finding of Hon’ble High Court (Supra), the PCIT can’t revise the penalty for violation of 269SS of the Act. 5.3 Accordingly, the ord ground of applicability of section 80P(2)(d) and 269SS of the Act. The grounds of appeal of the assessee are accordingly allowed. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on Sd/- (KULDIP SINGH JUDICIAL MEMBER Mumbai; absence of any such finding in the order of the learned Tribunal, before holding the same to be legally unsustainable the Court will have to be satisfied that in the course of th revisional proceeding the assessee, actually and really, did not have the opportunity to contest the facts on the basis of which the learned C.I.T. had concluded that the order of the Assessing Officer is erroneous and prejudicial to the interests Revenue. The above is the question to which the Court, therefore, will have to turn to.” 9. In the case at hand, there is a finding by the Tribunal, as noted earlier, that no issue was raised by the CIT in respect of particulars of payment made to persons specified under Section 40A(2)(b) of the Act and even the show cause notice is silent about that. 10. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the facts and circumstances are properly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial question of law.” Respectfully following the finding of Hon’ble High Court (Supra), the PCIT can’t revise the assessment order on the issue of penalty for violation of 269SS of the Act. Accordingly, the order of the Ld. PCIT is set aside, ility of section 80P(2)(d) and 269SS of the Act. The grounds of appeal of the assessee are accordingly allowed. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 31/03/2023. Sd/ KULDIP SINGH) (OM PRAKASH JUDICIAL MEMBER ACCOUNTANT MEMBER SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 14 absence of any such finding in the order of the learned Tribunal, before holding the same to be legally unsustainable the Court will have to be satisfied that in the course of the revisional proceeding the assessee, actually and really, did not have the opportunity to contest the facts on the basis of which the learned C.I.T. had concluded that the order of the Assessing Officer is erroneous and prejudicial to the interests Revenue. The above is the question to which the Court, therefore, will have to turn to.” 9. In the case at hand, there is a finding by the Tribunal, as noted earlier, that no issue was raised by the CIT in respect of particulars of payment specified under Section 40A(2)(b) of the Act and even the show cause notice is silent about that. 10. In our view, the Tribunal has not committed any perversity or applied incorrect principles to the given facts and when the operly analysed and correct test is applied to decide the issue at hand, then, we do not think that question as pressed raises any substantial Respectfully following the finding of Hon’ble High Court assessment order on the issue of er of the Ld. PCIT is set aside, both on the ility of section 80P(2)(d) and 269SS of the Act. The grounds of appeal of the assessee are accordingly allowed. In the result, the appeal filed by the assessee is allowed. 03/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Dated: 31/03/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai SaphaleParisarBigarshetiSahkari ITA No. 190/Mum/2023 15 BY ORDER, (Assistant Registrar) ITAT, Mumbai