SAI PRERNA CO-OP. CREDIT SOCIETY LTD, MUMBAI V. ITO WD 17(3) (2) , MUMBAI

ITA 221/MUM/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 9346 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 23-03-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 22-01-2023

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 Nos. 217, 220 & 221, 218 & 219, 215, 214/MUM/2023 Assessment Years: 2013-14, 2016-17, 2017-18, 2018-19, 2020-21 Sai Prerana Co-op Credit Society Ltd., 317, Puran Aasha Bldg, Gr. Fl. Narashi Natha Street, Katha Bazar Masjid Bunder (W), Mumbai-400 009. Vs. ITO-17(3)(2), Room No. 126, 1 st floor, Kautilya Bhavan, C-41 to C- 43, G Block Bandra Kurla Complex, Bandra (East), Mumbai-400051. PAN No. AADTS 5638 M Appellant Respondent ITA Nos. 192, 193, 194 & 195/MUM/2023 Assessment Year: 2016-17, 2017-18, 2018-19 & 2020-21 ITO-26(2)(1), Room No. 127, 1 st floor, G- Block, Kautilya Bhavan, Bandra Kurla Complex, Mumbai-400051. Vs. Sai Prerana Co-op Credit Society Ltd., 317, Puran Aasha Bldg, Gr. Fl. NarashiNatha Street, Katha Bazar Masjid Bunder (W), Mumbai-400 009. PAN No. AADTS 5638 M Appellant Respondent Assessee by : Mr. Bharat Kumar, AR Revenue by : Mr. Milind S. Chavan, DR Date of Hearing : 24/03/2023 Date of pronouncement : 27/04/2023 PER BENCH These appeals by the assessee and the Revenue are directed against separate orders passed by the Ld. First i.e. the Commissioner of Income Appeal Centre, Delhi [ in short the ld CIT(A)] , from AY 2013-14 to AY 2020 2019-20. These appeals being connecte involving common issue, same by way of this consolidated order for convenience and avoid repetition of facts. 2. First of all, we take up the appeal of the assessee for assessment year 2013 appeal are reproduced as under: 1. On the facts and circumstances of the case in Law. Ld. CIT (A) erred in confirming reopening of the case on the same facts and circumstances which is change in opinion. 2. On the facts and circumstances of the case in Law, Ld. CIT (A) erred in confirming of the reopening which was open after four years without established failure on the part of the assesse which is bad in Law. 3. On the facts and circumstances of the case (A) erred in disallowing80P deduction on account of interest received from other than cooperative bank. Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to ORDER These appeals by the assessee and the Revenue are directed against separate orders passed by the Ld. First Appellate Authority i.e. the Commissioner of Income-tax (appeals) -National Faceless Appeal Centre, Delhi [ in short the ld CIT(A)] , for assessment years 14 to AY 2020-21 except AY 2014-15 These appeals being connected with same involving common issue, same were heard together and disposed off by way of this consolidated order for convenience and avoid First of all, we take up the appeal of the assessee for assessment year 2013-14. The grounds raised by the assessee in its appeal are reproduced as under: 1. On the facts and circumstances of the case in Law. Ld. CIT (A) erred in confirming reopening of the case on the same facts and circumstances which is change in opinion. 2. On the facts and circumstances of the case in Law, Ld. CIT (A) erred in confirming of the reopening which was open after four years without established failure on the part of the assesse which is bad in Law. 3. On the facts and circumstances of the case in Law, Ld. CIT (A) erred in disallowing80P deduction on account of interest received from other than cooperative bank. Sai Prerana Co-op Credit Society Ltd. 2 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 These appeals by the assessee and the Revenue are directed Appellate Authority National Faceless for assessment years 15 , 2015-16 and same assessee and were heard together and disposed off by way of this consolidated order for convenience and avoid First of all, we take up the appeal of the assessee for The grounds raised by the assessee in its 1. On the facts and circumstances of the case in Law. Ld. CIT (A) erred in confirming reopening of the case on the same facts 2. On the facts and circumstances of the case in Law, Ld. CIT (A) erred in confirming of the reopening which was open after four years without established failure on the part of the in Law, Ld. CIT (A) erred in disallowing80P deduction on account of interest 4. The Appellant keep its right reserve to add/modity/ delete the any grounds of appeal. 3. Briefly stated, facts of the case are that ‘credit co-operative society operative Society Act, 1960 assessee filed return of income u/s 139(1) of the Income 1961 (in short ‘the Act’) on Nil. The assessment u/s 143(3) of the Act was completed on 07.03.2016 wherein total income was assessed at Rs.1,18,440/ Subsequently, the case was reopened u/s 147 of the Act. The Assessing Officer recorded reason assessment due to wrong claim of 80P(2)(d) of the Act on the interest received ‘co-operative’ as well as in the reassessment order passed of the Act on 03.12.2019 Act in respect of interest income of Rs.97,49,707/ assessee’s society from banks (co nationalized bank) and assessed the said interest income under the head ‘income from other the scope of deduction under section 80P(2)(d) is restricted to deposit made with ‘cooperative society’ and ‘cooperative bank’ are distinct from the cooperative society for deposits with Cooperative Bank. The Ld Assessing officer relied on the decision of Hon’ble Karnataka High Court in the case of Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to 4. The Appellant keep its right reserve to add/modity/ delete the any grounds of appeal. Briefly stated, facts of the case are that the assessee is a operative society’ constituted under the Maharashtra Co operative Society Act, 1960. For the year under consideration, the assessee filed return of income u/s 139(1) of the Income 1961 (in short ‘the Act’) on 19.09.2013 declaring total income at Rs. Nil. The assessment u/s 143(3) of the Act was completed on 07.03.2016 wherein total income was assessed at Rs.1,18,440/ Subsequently, the case was reopened u/s 147 of the Act. The Assessing Officer recorded reasons to believe that income escaped wrong claim of the assessee for deduction 80P(2)(d) of the Act on the interest received from fixed deposits with as well as ‘nationalized banks’. The Assessing Officer t order passed u/s 147 read with section 143(3) on 03.12.2019, denied the deduction u/s 80P Act in respect of interest income of Rs.97,49,707/- assessee’s society from banks (co-operative bank as well as ank) and assessed the said interest income under the head ‘income from other sources. According to the Assessing Officer the scope of deduction under section 80P(2)(d) is restricted to deposit made with ‘cooperative society’ and ‘cooperative bank’ are from the cooperative society, no deduction can be allowed for deposits with Cooperative Bank. The Ld Assessing officer relied on the decision of Hon’ble Karnataka High Court in the case of Sai Prerana Co-op Credit Society Ltd. 3 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 4. The Appellant keep its right reserve to add/modity/ delete the assessee is a constituted under the Maharashtra Co- or the year under consideration, the assessee filed return of income u/s 139(1) of the Income-tax Act, 19.09.2013 declaring total income at Rs. Nil. The assessment u/s 143(3) of the Act was completed on 07.03.2016 wherein total income was assessed at Rs.1,18,440/-. Subsequently, the case was reopened u/s 147 of the Act. The s to believe that income escaped for deduction u/s fixed deposits with . The Assessing Officer u/s 147 read with section 143(3) the deduction u/s 80P(2)(d) of the - earned by the operative bank as well as ank) and assessed the said interest income under the According to the Assessing Officer the scope of deduction under section 80P(2)(d) is restricted to deposit made with ‘cooperative society’ and ‘cooperative bank’ are , no deduction can be allowed for deposits with Cooperative Bank. The Ld Assessing officer relied on the decision of Hon’ble Karnataka High Court in the case of CIT vs. Totgars Cooperative Society limited 83 taxmann.com 140 (2017) dated 16/06/2017 rejected by the Hon’ble Supreme Court. 4. On further appeal, the Ld. CIT(A) though upheld the validity of the reassessment proceedings, deduction u/s 80P(2)(d) deposits kept with the co from deposits with Nationalized Banks by the ld CIT(A). 5. Aggrieved, the assessee has challenged the finding of the CIT(A) before us on the validity of the reassessment as well as deduction u/s 80P(2)(d) of the Act from banks other than co banks 6. We have heard rival submission of the parties on t dispute and perused the relevant material on record. Ground No. 1 and 2 of the appeal related to the reassessment proceeding, we find that i beyond the period of four years from the end of th assessment year. As per the provisions of the Act cannot be reopened beyond the period of four years from end of the relevant assessment year unless there is a failure on the part of the assessee to disclose fully and truly all Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to vs. Totgars Cooperative Society limited 83 taxmann.com 140 (2017) dated 16/06/2017, a SLP filed against which has been rejected by the Hon’ble Supreme Court. On further appeal, the Ld. CIT(A) though upheld the validity of proceedings, however on the merit allowed the deduction u/s 80P(2)(d) of the Act in respect of income earned from deposits kept with the co-operative banks. In respect of interest from deposits with Nationalized Banks, no finding has been given the assessee has challenged the finding of the CIT(A) before us on the validity of the reassessment as well as deduction u/s 80P(2)(d) of the Act in respect of interest received from banks other than co-operative banksi.e. the Nationalized We have heard rival submission of the parties on t dispute and perused the relevant material on record. Ground No. 1 and 2 of the appeal related to the reassessment proceeding, we find that in the case assessment has been reopened beyond the period of four years from the end of th assessment year. As per the provisions of the Act , an cannot be reopened beyond the period of four years from end of the relevant assessment year unless there is a failure on the part of the assessee to disclose fully and truly all material facts Sai Prerana Co-op Credit Society Ltd. 4 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 vs. Totgars Cooperative Society limited 83 taxmann.com 140 , a SLP filed against which has been On further appeal, the Ld. CIT(A) though upheld the validity of however on the merit allowed the of the Act in respect of income earned from In respect of interest no finding has been given the assessee has challenged the finding of the Ld. CIT(A) before us on the validity of the reassessment as well as in respect of interest received i.e. the Nationalized We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. Regarding the Ground No. 1 and 2 of the appeal related to the reassessment n the case assessment has been reopened beyond the period of four years from the end of the relevant , an assessment cannot be reopened beyond the period of four years from end of the relevant assessment year unless there is a failure on the part of the aterial facts necessary for completion of assessment. In the case year completed u/s 143(3) of the Act, the assessee was allowed deduction u/s 80P of the Act in respect of interest income earned from the nationalized as well as c Officer has reopened the assessment based on the same material which was available assessment proceedings, which recorded by the Assessing Officer on page 1 of the assessment order same is reproduced as under: "The assessee, Sai Prerna Co assessed to tax in this charge. Assessee e filed its return of income for AY 2013 Nil.The case was duly concluded vide order us 143(3) dated 07.03.2016 at Rs NIL/ society. 2. Subsequently, in this case, it is found that assessee has claimed deduction un 97,49,7071- 3. As per the records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 163,45,298/ FD's as seen from the Balance sheet were operative banks and not with co operative society. This clearly showed that assessee has earned income from co operative banks and not from society. Section 80P(2)(d) does not extend the benefit of deduction for interest received from invest made with co operative banks, hence the deduction was required to be disallowed. 4. Assessee claimed deduction u/s 800(2) which is clearly in contravention to provisions of the Act. The income from FD was required to be offered under the head "income Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to assessment. In the case, in the regular year completed u/s 143(3) of the Act, the assessee was allowed deduction u/s 80P of the Act in respect of interest income earned from the nationalized as well as co-operative bank. T Officer has reopened the assessment based on the same material which was available before the Assessing Officer during original proceedings, which is evident from the reasons recorded by the Assessing Officer ( i.e. reproduced by the Assessing Officer on page 1 of the assessment order). For ready reference same is reproduced as under: "The assessee, Sai Prerna Co-op. Credit Society Ltd., is assessed to tax in this charge. Assessee e filed its return of r AY 2013-14 on 08.09.2012 showing income of Rs. .The case was duly concluded vide order us 143(3) dated 07.03.2016 at Rs NIL/-. Assessee is a co operative credit 2. Subsequently, in this case, it is found that assessee has claimed deduction under section 80P(2) of the Act of R$ and the same was also allowed in the order. 3. As per the records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 163,45,298/ FD's as seen from the Balance sheet were mainty with co operative banks and not with co operative society. This clearly showed that assessee has earned income from co operative banks and not from society. Section 80P(2)(d) does not extend the benefit of deduction for interest received from invest made with co operative banks, hence the deduction was required to be disallowed. 4. Assessee claimed deduction u/s 800(2) which is clearly in contravention to provisions of the Act. The income from FD was required to be offered under the head "income Sai Prerana Co-op Credit Society Ltd. 5 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 regular assessment year completed u/s 143(3) of the Act, the assessee was allowed deduction u/s 80P of the Act in respect of interest income earned . The Assessing Officer has reopened the assessment based on the same material the Assessing Officer during original is evident from the reasons reproduced by the Assessing For ready reference op. Credit Society Ltd., is assessed to tax in this charge. Assessee e filed its return of 08.09.2012 showing income of Rs. .The case was duly concluded vide order us 143(3) dated . Assessee is a co operative credit 2. Subsequently, in this case, it is found that assessee has der section 80P(2) of the Act of R$ and the same was also allowed in the order. 3. As per the records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 163,45,298/-. The mainty with co operative banks and not with co operative society. This clearly showed that assessee has earned income from co operative banks and not from society. Section 80P(2)(d) does not extend the benefit of deduction for interest received from investments made with co operative banks, hence the deduction was 4. Assessee claimed deduction u/s 800(2) which is clearly in contravention to provisions of the Act. The income from FD was required to be offered under the head "income from other sources" as per the provisions of the Act as, co operative bank is a urban commercial bank and does not fall under the purview of co operative society referred to section 80P(2)(d) of the Act. The claim of assessee for deduction clearly shows that there is failure on part of assessee in making true and full disclosure of its particulars of income for AY 2012 5. Section 147 of the Act states that If AO has reason to believe that any income chargeable to tax has escaped assessment for any asse provisions of section 148 to 153, assessee or reassess such income and also any other income which has escaped assessment and which comes to his notice subsequently in the course of proceedings under this section." 6.1 On perusal of the above reasons there is no tangible new information ‘internal’ or ‘external’ escaped assessment appreciated the information which was available before him in original assessment proceedings and therefore, the reasons recorded are based on merely reasons recorded though the Assessing Officer was a failure on the part of the assessee in making true and fully disclosure, however, he has not pointed out which information was not disclosed fully and truly earned by the assessee from fixed deposits was duly explained before the Assessing Officer therefore, contention of the Assessing Officer failure on the part of the assessee in making disclosure,is devoid of merit and Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to sources" as per the provisions of the Act as, co operative bank is a urban commercial bank and does not fall under the purview of co operative society referred to section 80P(2)(d) of the Act. The claim of assessee for deduction clearly shows hat there is failure on part of assessee in making true and full disclosure of its particulars of income for AY 2012- 5. Section 147 of the Act states that If AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may subject to provisions of section 148 to 153, assessee or reassess such income and also any other income which has escaped assessment and which comes to his notice subsequently in the course of proceedings under this section." usal of the above reasons recorded, it is there is no tangible new information or material ’ source to form reasons to believe that income escaped assessment. The Assessing Officer has merely re he information which was available before him in original assessment proceedings and therefore, the reasons on merely ‘change of opinion’. In para 4 of the reasons recorded though the Assessing Officer mentioned that there on the part of the assessee in making true and fully owever, he has not pointed out which information was and truly by the assessee. The interest income earned by the assessee from fixed deposits was duly explained he Assessing Officer in original assessment proceedings therefore, contention of the Assessing Officer in reason recorded failure on the part of the assessee in making devoid of merit and in the nature of an Sai Prerana Co-op Credit Society Ltd. 6 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 sources" as per the provisions of the Act as, co operative bank is a urban commercial bank and does not fall under the purview of co operative society referred to section 80P(2)(d) of the Act. The claim of assessee for deduction clearly shows hat there is failure on part of assessee in making true and full -13. 5. Section 147 of the Act states that If AO has reason to believe that any income chargeable to tax has escaped ssment year, he may subject to provisions of section 148 to 153, assessee or reassess such income and also any other income which has escaped assessment and which comes to his notice subsequently in recorded, it is evident that or material from either source to form reasons to believe that income has merely re- he information which was available before him in original assessment proceedings and therefore, the reasons . In para 4 of the mentioned that there on the part of the assessee in making true and fully owever, he has not pointed out which information was by the assessee. The interest income earned by the assessee from fixed deposits was duly explained in original assessment proceedings and in reason recorded of failure on the part of the assessee in making full and true in the nature of an incorrect allegation only. Relying on the decision of the Hon’ble Jurisdictional High Court in the case of [2022] 141 taxmann.com 72 (Bombay) appreciating same facts assessment proceedings opinion’. In writ petition no. 3048 of 202 Postal Employees Co Hon’ble Bombay High Court AO in the reasons recorded was not based upon any material other than obtained on amount of ‘perusal of the record’, and hence it was based on change of opinion Court is reproduced as under: “8. We have heard learne 9. It is no longer res integra that the action of the A.O. ininitiating reassessment proceedings have to be tested on the touch stone of the reasons recorded. On a perusal of the reasons recorded as have been reproduced partially in the preceding paragraph claim of deduction under Section 80P(2)(d) of the Act which had been allowed in favour of the Petitioner was not in conformity with the provisions of the said section, which consequently had resulted in an under a of Rs.92,08,876/ Rs.28,45,542/ reasons was not based upon any material other than obtained on account of ‘perusal of the record’. 10. It can be noti was under Section 143(3) of the Act, during which the Petitioner had been served with the notice under Section 142(1) of the Act dated 27th September, 2016 asking the Petitioner to explain with documentary eviden Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to allegation only. Relying on the decision of the Hon’ble Jurisdictional High Court in the case of Sunjewels India (P.) Ltd. reported in [2022] 141 taxmann.com 72 (Bombay)reassessments appreciating same facts, which were available during original sessment proceedings,is bad in law on the reason of In writ petition no. 3048 of 2022 in the case of Postal Employees Co-operative Credit Society Ltd Vs ITO Hon’ble Bombay High Court held that satisfaction recorded by the O in the reasons recorded was not based upon any material other than obtained on amount of ‘perusal of the record’, and hence it was based on change of opinion. The relevant finding of the Hon’ble High Court is reproduced as under: 8. We have heard learned Counsel for the parties. 9. It is no longer res integra that the action of the A.O. ininitiating reassessment proceedings have to be tested on the touch stone of the reasons recorded. On a perusal of the reasons recorded as have been reproduced partially in the preceding paragraphs, it is clear that the A.O. felt that the claim of deduction under Section 80P(2)(d) of the Act which had been allowed in favour of the Petitioner was not in conformity with the provisions of the said section, which consequently had resulted in an under assessment of income of Rs.92,08,876/- and a consequent short levy of tax of Rs.28,45,542/-. This satisfaction recorded by the A.O. in the reasons was not based upon any material other than obtained on account of ‘perusal of the record’. 10. It can be noticed that in the present case the assessment was under Section 143(3) of the Act, during which the Petitioner had been served with the notice under Section 142(1) of the Act dated 27th September, 2016 asking the Petitioner to explain with documentary evidence the claim of Sai Prerana Co-op Credit Society Ltd. 7 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 allegation only. Relying on the decision of the Hon’ble Jurisdictional Sunjewels India (P.) Ltd. reported in reassessments based on which were available during original bad in law on the reason of ‘change of 2 in the case of Mumbai ative Credit Society Ltd Vs ITO, the that satisfaction recorded by the O in the reasons recorded was not based upon any material other than obtained on amount of ‘perusal of the record’, and hence it was . The relevant finding of the Hon’ble High d Counsel for the parties. 9. It is no longer res integra that the action of the A.O. ininitiating reassessment proceedings have to be tested on the touch stone of the reasons recorded. On a perusal of the reasons recorded as have been reproduced partially in the s, it is clear that the A.O. felt that the claim of deduction under Section 80P(2)(d) of the Act which had been allowed in favour of the Petitioner was not in conformity with the provisions of the said section, which ssessment of income and a consequent short levy of tax of . This satisfaction recorded by the A.O. in the reasons was not based upon any material other than obtained ced that in the present case the assessment was under Section 143(3) of the Act, during which the Petitioner had been served with the notice under Section 142(1) of the Act dated 27th September, 2016 asking the ce the claim of deduction under Chapter VI submitted by the Petitioner on 10th October, 2016 with an explanation that the Petitioner get fulflled the conditions of eligibility under Section 80P of the Act, whereafter the ord assessment came to be passed on 23rd November, 2016. It is therefore clear that the issue stood considered as only a part ofthe deduction under Section 80P of the Act while disallowing the same in regard to income from holiday home charges. 11. The A.O. therefore did not have any tangible material with him based upon which he could form his reason to believe that income had escaped assessment. The entire basis for reopening is nothing but a change of opinion on the part of the A.O. that the beneft of of Rs.92,08,876/ between the date of the assessment order under Section 143(3) of the Act and the date when the reasons were recorded, there has been neither any change in l new material has been shown to have come to the knowledge of the A.O.. This therefore is nothing but a clear case of change of opinion as was rightly urged by Mr. Mistry and, therefore, impermissible for reopening the assessment. Apart from this, the assessment is sought to be reopened beyond the period of four years from the end of the relevant assessment year 2014-15 and, therefore, it was incumbent upon the A.O. to establish that the Petitioner had failed to disclose fully and truly all materi relevant assessment proceedings. No such averment is made in the 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, Assistant Commissi held: “......The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing Offcer. The reasons recorded should be self assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Offcer, in the event of challenge to the reasons, must be able to jus Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to deduction under Chapter VI-A of the Act, reply thereto was submitted by the Petitioner on 10th October, 2016 with an explanation that the Petitioner get fulflled the conditions of eligibility under Section 80P of the Act, whereafter the ord assessment came to be passed on 23rd November, 2016. It is therefore clear that the issue stood considered as only a part the deduction under Section 80P of the Act while disallowing the same in regard to income from holiday home charges. A.O. therefore did not have any tangible material with him based upon which he could form his reason to believe that income had escaped assessment. The entire basis for reopening is nothing but a change of opinion on the part of the A.O. that the beneft of deduction under Section 80P of the Act of Rs.92,08,876/- ought not to have been allowed at all. As between the date of the assessment order under Section 143(3) of the Act and the date when the reasons were recorded, there has been neither any change in l new material has been shown to have come to the knowledge of the A.O.. This therefore is nothing but a clear case of change of opinion as was rightly urged by Mr. Mistry and, therefore, impermissible for reopening the assessment. Apart , the assessment is sought to be reopened beyond the period of four years from the end of the relevant assessment 15 and, therefore, it was incumbent upon the A.O. to establish that the Petitioner had failed to disclose fully and truly all material facts necessary for assessment during the relevant assessment proceedings. No such averment is made 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, Assistant Commissioner of Income-Tax and others 1 “......The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing Offcer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Offcer, in the event of challenge to the reasons, must be able to justify the same Sai Prerana Co-op Credit Society Ltd. 8 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 A of the Act, reply thereto was submitted by the Petitioner on 10th October, 2016 with an explanation that the Petitioner get fulflled the conditions of eligibility under Section 80P of the Act, whereafter the order of assessment came to be passed on 23rd November, 2016. It is therefore clear that the issue stood considered as only a part the deduction under Section 80P of the Act while disallowing the same in regard to income from holiday home charges. A.O. therefore did not have any tangible material with him based upon which he could form his reason to believe that income had escaped assessment. The entire basis for reopening is nothing but a change of opinion on the part of the deduction under Section 80P of the Act ought not to have been allowed at all. As between the date of the assessment order under Section 143(3) of the Act and the date when the reasons were recorded, there has been neither any change in law nor any new material has been shown to have come to the knowledge of the A.O.. This therefore is nothing but a clear case of change of opinion as was rightly urged by Mr. Mistry and, therefore, impermissible for reopening the assessment. Apart , the assessment is sought to be reopened beyond the period of four years from the end of the relevant assessment 15 and, therefore, it was incumbent upon the A.O. to establish that the Petitioner had failed to disclose fully and al facts necessary for assessment during the relevant assessment proceedings. No such averment is made 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, Tax and others 1, it was “......The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing Offcer. The reasons anatory and should not keep the assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Offcer, in the event of tify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. In the aforementioned case the Court set aside the notice under Section 148 of the Act impugned therein, on the ground that the jurisdictio 147 of the Act had not been complied with as the A.O. had nowhere stated in the reasons recorded that there was failure on the part of the assessee to disclose fully and truly all material facts. Similar facts situ present case where the reasons recorded do not at all alleged any such failure on the part of the assessee which was a condition prerequisite for invoking jurisdiction for reopening in addition to the condition of ‘reasons tobeliev case of reopening beyond the period of four years. 13. For the reasons mentioned hereinabove, we have no hesitation in holding that in the facts and circumstances of the present case, the reopening of the assessment is unsustainable. Be t allowed. The notice under Section 148 of the Act as also the order of assessment dated 30th March, 2022 passed under Section 147 r/w Section 144B of the Act are set aside. 6.2 Similar finding has been given by the Ho Court while deciding the case of Tahnee Heights CHS Ltd Vs ITO the Hon’ble High Court is reproduced as under: “8. In the present case although the A.O. has recorded in the reasons that there was failure on the part of the assessee to disclosefully and truly material facts, it failed to identify as to what was that material fact which was not disclosed by the assessee which if so disclosed could have prevented the escapement of Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. In the aforementioned case the Court set aside the notice under Section 148 of the Act impugned therein, on the ground that the jurisdictional requirement of the proviso to Section 147 of the Act had not been complied with as the A.O. had nowhere stated in the reasons recorded that there was failure on the part of the assessee to disclose fully and truly all material facts. Similar facts situation exists even in the present case where the reasons recorded do not at all alleged any such failure on the part of the assessee which was a condition prerequisite for invoking jurisdiction for reopening in addition to the condition of ‘reasons tobelieve’ as this was a case of reopening beyond the period of four years. 13. For the reasons mentioned hereinabove, we have no hesitation in holding that in the facts and circumstances of the present case, the reopening of the assessment is unsustainable. Be that as it may, the present petition is allowed. The notice under Section 148 of the Act as also the order of assessment dated 30th March, 2022 passed under Section 147 r/w Section 144B of the Act are set aside. Similar finding has been given by the Hon’ble Bombay High Court while deciding the writpetition no. 1809 of 2022 in the case of Tahnee Heights CHS Ltd Vs ITO. The relevant finding of the Hon’ble High Court is reproduced as under: 8. In the present case although the A.O. has recorded in the sons that there was failure on the part of the assessee to disclosefully and truly material facts, it failed to identify as to what was that material fact which was not disclosed by the assessee which if so disclosed could have prevented the escapement of income. The alleged failure to disclose appears Sai Prerana Co-op Credit Society Ltd. 9 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. In the aforementioned case the Court set aside the notice under Section 148 of the Act impugned therein, on the ground nal requirement of the proviso to Section 147 of the Act had not been complied with as the A.O. had nowhere stated in the reasons recorded that there was failure on the part of the assessee to disclose fully and truly all ation exists even in the present case where the reasons recorded do not at all alleged any such failure on the part of the assessee which was a condition prerequisite for invoking jurisdiction for reopening in e’ as this was a case of reopening beyond the period of four years. 13. For the reasons mentioned hereinabove, we have no hesitation in holding that in the facts and circumstances of the present case, the reopening of the assessment is hat as it may, the present petition is allowed. The notice under Section 148 of the Act as also the order of assessment dated 30th March, 2022 passed under Section 147 r/w Section 144B of the Act are set aside.” n’ble Bombay High writpetition no. 1809 of 2022 in the . The relevant finding of 8. In the present case although the A.O. has recorded in the sons that there was failure on the part of the assessee to disclosefully and truly material facts, it failed to identify as to what was that material fact which was not disclosed by the assessee which if so disclosed could have prevented the income. The alleged failure to disclose appears to be nothing but a statement to somehow overcome the hurdle of reopening the assessment beyond four years. Apart from the above, the A.O. could have proceeded to reopen the assessment only if he had reason had escaped assessment’. 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court held: “ The Assessing Offcer has no power to review; he has the power to reassess. But reassessment has to be based on fulfllment of certain prec of opinion” is removed, as contended on behalf of the Department, then, in the garb of re review would take place. One must treat the concept of “change of opinion” as an in by the Assessing Offcer. Hence, after 1 Offcer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief.” 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of Income Tax 3 , the Court, in the light of the facts before it and in the background of section 147 of the Act, observed : “...................all that the Income was not right in allowing deduction under Section 80I because he had allowed the deductions wrongly and, therefore, he was of the opinion that the income had escaped assessment. Though he has used the phrase "reason to believe" in his order, admittedly, between the date of the orders of assessment sought to be reopened and the date of forming of opinion by the Income There is no change of law. No new material has come on record. No information has be application of mind by the same Assessing Offcer to the same set of facts. While passing the original orders of assessment the order dated February 28, 1994, passed by the Commissioner of Income Assessing Offcer. That order stands till today. What the Assessing Offce has said about the order of the Commissioner Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to to be nothing but a statement to somehow overcome the hurdle of reopening the assessment beyond four years. Apart from the above, the A.O. could have proceeded to reopen the assessment only if he had reason to believe that ‘income had escaped assessment’. 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court “ The Assessing Offcer has no power to review; he has the power to reassess. But reassessment has to be based on fulfllment of certain precondition and if the concept of “change of opinion” is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of “change of opinion” as an in-built test to check abuse of power by the Assessing Offcer. Hence, after 1-4-1989, Assessing Offcer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with formation of the belief.” 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of Income Tax 3 , the Court, in the light of the facts before it and in the background of section 147 of the Act, observed : “...................all that the Income-tax Offcer has said is that he was not right in allowing deduction under Section 80I because he had allowed the deductions wrongly and, therefore, he was of the opinion that the income had escaped assessment. Though he has used the phrase "reason to believe" in his order, admittedly, between the date of the orders of assessment sought to be reopened and the date of forming of opinion by the Income-tax Offcer nothing new has happened. There is no change of law. No new material has come on record. No information has been received. It is merely a fresh application of mind by the same Assessing Offcer to the same set of facts. While passing the original orders of assessment the order dated February 28, 1994, passed by the Commissioner of Income-tax (Appeals) was before th Assessing Offcer. That order stands till today. What the Assessing Offce has said about the order of the Commissioner Sai Prerana Co-op Credit Society Ltd. 10 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 to be nothing but a statement to somehow overcome the hurdle Apart from the above, the A.O. could have proceeded to reopen to believe that ‘income 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court “ The Assessing Offcer has no power to review; he has the power to reassess. But reassessment has to be based on ondition and if the concept of “change of opinion” is removed, as contended on behalf of the opening the assessment, review would take place. One must treat the concept of abuse of power 1989, Assessing Offcer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of Income Tax 3 , the Court, in the light of the facts before it and in the background of section 147 of the Act, observed : has said is that he was not right in allowing deduction under Section 80I because he had allowed the deductions wrongly and, therefore, he was of the opinion that the income had escaped assessment. Though he has used the phrase "reason to believe" in his order, admittedly, between the date of the orders of assessment sought to be reopened and the date of forming of tax Offcer nothing new has happened. There is no change of law. No new material has come on en received. It is merely a fresh application of mind by the same Assessing Offcer to the same set of facts. While passing the original orders of assessment the order dated February 28, 1994, passed by the tax (Appeals) was before the Assessing Offcer. That order stands till today. What the Assessing Offce has said about the order of the Commissioner of Income-tax (Appeals) while recording reasons under Section 147 he could have said even in the original orders of assessment. Thus, it which does not provide jurisdiction to the Assessing Offcer to initiate proceedings under Section 147 of the Act. It is also equally well settled that if a notice under Section 148 has been issued without the jurisdict Section 147 being available to the Assessing Offcer, the notice and the subsequent proceedings will be without jurisdiction, liable to be struck down in exercise of writ jurisdiction of this court. If "reason to believe" be available exercise its power of judicial review to go into the suffciency or adequacy of the material available. However, the present one is not a case of testing the suffciency of material available. It is a case of absence of material and jurisdiction in the Assessing Offcer to initiate the proceedings under Section 147/148 of the Act.” 11. Even in the present case there appears to be no tangible material with the A.O. as can be seen from the reasons recorded and that of the assessment. It thus appears that between the date of the order of assessment and the date of the issuance of notice, nothing new had happened. There was no new information received by the Assessing Offcer to any new material on record. The A.O. was simply attempting to deduction under Section 80P of the Act claimed and allowed in favour of the Petitioner. 12. We cannot forget that the o the case of the assessee was under Section 143(3) of the Act. The Petitioner had specifcally claimed the deduction under Section 80P of the Act which was not only reflected in the return of income but also gone into specifcally from the notice issued under Section 142(1) of the Act where by the details of various deductions and exemptions along with documentary evidence had been sought for by the A.O., which fnally led to the passing of the order of assessment where by while certain disallowances were made in respect to certain items, the claim of deduction under Section 80P was allowed. It is settled law that if a query is raised during the Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to tax (Appeals) while recording reasons under Section 147 he could have said even in the original orders of assessment. Thus, it is a case of mere change of opinion which does not provide jurisdiction to the Assessing Offcer to initiate proceedings under Section 147 of the Act. It is also equally well settled that if a notice under Section 148 has been issued without the jurisdictional foundation under Section 147 being available to the Assessing Offcer, the notice and the subsequent proceedings will be without jurisdiction, liable to be struck down in exercise of writ jurisdiction of this court. If "reason to believe" be available, the writ court will not exercise its power of judicial review to go into the suffciency or adequacy of the material available. However, the present one is not a case of testing the suffciency of material available. It is a case of absence of material and hence the absence of jurisdiction in the Assessing Offcer to initiate the proceedings under Section 147/148 of the Act.” 11. Even in the present case there appears to be no tangible material with the A.O. as can be seen from the reasons recorded and that the reference was made only to the records of the assessment. It thus appears that between the date of the order of assessment and the date of the issuance of notice, nothing new had happened. There was no new information received by the Assessing Offcer nor was any reference made to any new material on record. The A.O. was simply attempting toaccord a fresh consideration on the issue of deduction under Section 80P of the Act claimed and allowed in favour of the Petitioner. 12. We cannot forget that the order of assessment passed in the case of the assessee was under Section 143(3) of the Act. The Petitioner had specifcally claimed the deduction under Section 80P of the Act which was not only reflected in the return of income but also gone into specifcally as can be seen from the notice issued under Section 142(1) of the Act where by the details of various deductions and exemptions along with documentary evidence had been sought for by the A.O., which fnally led to the passing of the order of assessment re by while certain disallowances were made in respect to certain items, the claim of deduction under Section 80P was allowed. It is settled law that if a query is raised during the Sai Prerana Co-op Credit Society Ltd. 11 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 tax (Appeals) while recording reasons under Section 147 he could have said even in the original orders of is a case of mere change of opinion which does not provide jurisdiction to the Assessing Offcer to It is also equally well settled that if a notice under Section 148 ional foundation under Section 147 being available to the Assessing Offcer, the notice and the subsequent proceedings will be without jurisdiction, liable to be struck down in exercise of writ jurisdiction of this , the writ court will not exercise its power of judicial review to go into the suffciency or adequacy of the material available. However, the present one is not a case of testing the suffciency of material available. It hence the absence of jurisdiction in the Assessing Offcer to initiate the proceedings 11. Even in the present case there appears to be no tangible material with the A.O. as can be seen from the reasons the reference was made only to the records of the assessment. It thus appears that between the date of the order of assessment and the date of the issuance of notice, nothing new had happened. There was no new information nor was any reference made to any new material on record. The A.O. was simply accord a fresh consideration on the issue of deduction under Section 80P of the Act claimed and allowed in rder of assessment passed in the case of the assessee was under Section 143(3) of the Act. The Petitioner had specifcally claimed the deduction under Section 80P of the Act which was not only reflected in the as can be seen from the notice issued under Section 142(1) of the Act where by the details of various deductions and exemptions along with documentary evidence had been sought for by the A.O., which fnally led to the passing of the order of assessment re by while certain disallowances were made in respect to certain items, the claim of deduction under Section 80P was allowed. It is settled law that if a query is raised during the assessment proceedings and the assessee submits a reply thereto, leading t reopening in the absence of any new tangible material would be nothing but a change of opinion, which would not furnish to the A.O. a basis for his ‘reasons to believe’ that income chargeable to tax had escaped a 13. Be that as it may, we are of the opinion that the impugned notice is unsustainable on account of these jurisdictional errors committed by the A.O.. Consequently, the petition is allowed. The impugned notice dated30th March, 2021 under Section 148 of the Act and the impugned order dated 10th March, 2022 are held to be unsustainable and are accordingly quashed.” 6.3 In the case of Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat) Court of Gujrat held that dividend income, interest assessment after four years was not satisfied of the Hon’ble High Court id reproduced asunder: “12. Having thus heard learned counsel for the parties and having perused the materials on record, we notice that in the return filed by the petitioner, in addition to claiming deduction of gross income of interest and dividend of Rs.1,81,27,606 under Section 8 provided various details. For example, in the Annexure the return, such deduction under Section 80P(2)(d) was bifurcated into dividend income of Rs.53,71,450 and interest income of Rs.1,27,56,156. Further, supplied the full details of the statement showing dividend and interest income received from cooperative societies along with dividend counters in the original. Additionally, along with Tax Audit Report under Section 44AB of the A had given details of the dividend income, interest income as well as interest expenses for the said year, which included Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to assessment proceedings and the assessee submits a reply thereto, leading to the passing of the order of assessment, a reopening in the absence of any new tangible material would be nothing but a change of opinion, which would not furnish to the A.O. a basis for his ‘reasons to believe’ that income chargeable to tax had escaped assessment. 13. Be that as it may, we are of the opinion that the impugned notice is unsustainable on account of these jurisdictional errors committed by the A.O.. Consequently, the petition is allowed. The impugned notice dated30th March, 2021 under on 148 of the Act and the impugned order dated 10th March, 2022 are held to be unsustainable and are accordingly In the case of Surat District Co-op Milk Producers Union Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat) ujrat held that when the assessee had given full details of interest income, essential requirement to reopen assessment after four years was not satisfied. The relevant finding of the Hon’ble High Court id reproduced asunder: Having thus heard learned counsel for the parties and having perused the materials on record, we notice that in the return filed by the petitioner, in addition to claiming deduction of gross income of interest and dividend of Rs.1,81,27,606 under Section 80P(2)(d) of the Act, the petitioner further provided various details. For example, in the Annexure the return, such deduction under Section 80P(2)(d) was bifurcated into dividend income of Rs.53,71,450 and interest income of Rs.1,27,56,156. Further, the petitioner had also supplied the full details of the statement showing dividend and interest income received from cooperative societies along with dividend counters in the original. Additionally, along with Tax Audit Report under Section 44AB of the Act the petitioner had given details of the dividend income, interest income as well as interest expenses for the said year, which included Sai Prerana Co-op Credit Society Ltd. 12 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 assessment proceedings and the assessee submits a reply o the passing of the order of assessment, a reopening in the absence of any new tangible material would be nothing but a change of opinion, which would not furnish to the A.O. a basis for his ‘reasons to believe’ that income 13. Be that as it may, we are of the opinion that the impugned notice is unsustainable on account of these jurisdictional errors committed by the A.O.. Consequently, the petition is allowed. The impugned notice dated30th March, 2021 under on 148 of the Act and the impugned order dated 10th March, 2022 are held to be unsustainable and are accordingly op Milk Producers Union Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat), Hon’ble high when the assessee had given full details of essential requirement to reopen . The relevant finding Having thus heard learned counsel for the parties and having perused the materials on record, we notice that in the return filed by the petitioner, in addition to claiming deduction of gross income of interest and dividend of Rs.1,81,27,606 0P(2)(d) of the Act, the petitioner further provided various details. For example, in the Annexure-VII to the return, such deduction under Section 80P(2)(d) was bifurcated into dividend income of Rs.53,71,450 and interest the petitioner had also supplied the full details of the statement showing dividend and interest income received from cooperative societies along with dividend counters in the original. Additionally, along with ct the petitioner had given details of the dividend income, interest income as well as interest expenses for the said year, which included interest expenditure on fixed deposit, interest expenditure on the Society Savings, Employee Savings, etc. 13. Thus, petitioner's claim for deduction under Section 80P(2)(d) of the Act was very much before the Assessing Officer in the original return accompanied by the audited accounts of the petitioner society. There was petitioner to disclose fully and truly all the material facts necessary for assessment. The essential requirement to enable the Assessing Officer to reopen the assessment and the period of four years is, thus, not sati without going into the further question of the very maintainability of the belief of the Assessing Officer that the assessee's income has escaped assessment within the meaning of section 147 of the Act, we find sufficient justification in process only on the ground that there was no failure on the part of the petitioner to disclose truly and fully all the material facts. 6.4 The contention of the ld DR that explanation below the section 147 of the Act prescribing‘ amount to full and true disclosure of material facts in the case as the AO has not pointed out an was not disclosed during regular assessment proceedings. 6.5 In view of the above discussion, the reassessment proceedings cannot be sustained, proceeding are based on mere disclosure of full and true material facts by the assessee before the assessing officer, has not been substantiated by the Assessing officer, thirdly, there being no internal or external material to trigger the reopening of assessment Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to interest expenditure on fixed deposit, interest expenditure on the Society Savings, Employee Savings, etc. it can be seen that full details with respect to petitioner's claim for deduction under Section 80P(2)(d) of the Act was very much before the Assessing Officer in the original return accompanied by the audited accounts of the petitioner society. There was, thus, no failure on the part of the petitioner to disclose fully and truly all the material facts necessary for assessment. The essential requirement to enable the Assessing Officer to reopen the assessment and the period of four years is, thus, not satisfied. Therefore, without going into the further question of the very maintainability of the belief of the Assessing Officer that the assessee's income has escaped assessment within the meaning of section 147 of the Act, we find sufficient justification in thepetitioner's questioning the reopening the process only on the ground that there was no failure on the part of the petitioner to disclose truly and fully all the material The contention of the ld DR that explanation below the section prescribing‘producing books of amount does not amount to full and true disclosure of material facts’ in the case as the AO has not pointed out any material fact was not disclosed during regular assessment proceedings. In view of the above discussion, the reassessment proceedings , firstly, due to the reason that reassessment based on mere ‘change of opinion disclosure of full and true material facts by the assessee before the assessing officer, has not been substantiated by the Assessing , there being no internal or external material to trigger the reopening of assessment or for recording Sai Prerana Co-op Credit Society Ltd. 13 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 interest expenditure on fixed deposit, interest expenditure on it can be seen that full details with respect to petitioner's claim for deduction under Section 80P(2)(d) of the Act was very much before the Assessing Officer in the original return accompanied by the audited accounts of the petitioner , thus, no failure on the part of the petitioner to disclose fully and truly all the material facts necessary for assessment. The essential requirement to enable the Assessing Officer to reopen the assessment and sfied. Therefore, without going into the further question of the very maintainability of the belief of the Assessing Officer that the assessee's income has escaped assessment within the meaning of section 147 of the Act, we find sufficient thepetitioner's questioning the reopening the process only on the ground that there was no failure on the part of the petitioner to disclose truly and fully all the material The contention of the ld DR that explanation below the section producing books of amount does not ’, is not relevant material fact, which was not disclosed during regular assessment proceedings. In view of the above discussion, the reassessment proceedings , due to the reason that reassessment ’, secondly, no disclosure of full and true material facts by the assessee before the assessing officer, has not been substantiated by the Assessing , there being no internal or external material to or for recording the reasons to believe that income escaped assessment review of assessment permitted. Hence, the reassessment proceeding u/s 147 of the is quashed as void ab initio the assessee are accordingly allowed. 7. In ground No. 3, the assessee is seeking deduction u/s 80P of the Act in respect of interest received from other banks.Since we have already quashed the reassessment proceedings , therefore, the issue is rendered merely academic and therefore, we are not adjudicating upon the same 8. Now we take up the appeal of the assessee in ITA No. 220/M/2023 for assessment year 2016 the assessee are reproduced as under: 1. On the facts and circumstances of the case in Law, CPC made disallowance of 80P deduction which is not permissible while passing order us 143(1) which is bad in Law. 2. On the facts and circumstances of the case in Law, no addition is permissible while processing return u/s 143(1) on debatable issue. 3. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in disallowing 80P deduction on account of interest re cooperative bank. 4. The Appellant keep its right reserve to add/modify/ delete the any grounds of appeal. Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to believe that income escaped assessment, the action is a kind of review of assessment already completed, for which the AO is not the reassessment proceeding u/s 147 of the void ab initio. The ground No. 1 and 2 of the appeal the assessee are accordingly allowed. In ground No. 3, the assessee is seeking deduction u/s 80P of the Act in respect of interest received from other than ince we have already quashed the reassessment therefore, the issue is rendered merely academic and therefore, we are not adjudicating upon the same in this appeal Now we take up the appeal of the assessee in ITA No. 220/M/2023 for assessment year 2016-17. The relevant grounds of assessee are reproduced as under: 1. On the facts and circumstances of the case in Law, CPC made disallowance of 80P deduction which is not permissible while passing order us 143(1) which is bad in the facts and circumstances of the case in Law, no addition is permissible while processing return u/s 143(1) on debatable issue. 3. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in disallowing 80P deduction on account of interest received from other than cooperative bank. 4. The Appellant keep its right reserve to add/modify/ delete the any grounds of appeal. Sai Prerana Co-op Credit Society Ltd. 14 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 , the action is a kind of which the AO is not the reassessment proceeding u/s 147 of the Act nd 2 of the appeal of In ground No. 3, the assessee is seeking deduction u/s 80P of than co-operative ince we have already quashed the reassessment therefore, the issue is rendered merely academic and in this appeal. Now we take up the appeal of the assessee in ITA No. 17. The relevant grounds of 1. On the facts and circumstances of the case in Law, CPC made disallowance of 80P deduction which is not permissible while passing order us 143(1) which is bad in the facts and circumstances of the case in Law, no addition is permissible while processing return u/s 143(1) on 3. On the facts and circumstances of the case in Law, Ld. ceived from other than 4. The Appellant keep its right reserve to add/modify/ delete 9. We find that the in the case, the (CPC) Bangalore of the Income return of income vide intimation order u/s 143(1) of the Act dated 12.01.2017,made adjustment u/s 80P of the Act sought rectification of the passed order u/s 154 of the assessee preferred appeal against the said rectification order u/s 154 of the Act also assessee against the observing as under: “5.0 It is found from records that the assessee had filed an appeal against a subsequent Order us 154 rectifying the instant Order underAppeal passed by the CPC, Bangalore for the same A. Yr. By virtue of the Doctrine of Merger, the intimation us 143(1) dated 12/01/2017 had merged with the rectification Order us 154 dated 06/07/2019. 10. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. We find that the Ld. CIT(A) has dismissed the appeal merely for the reason that issue-in-dispute has already been merged in the rectification order dated 06.07.2019 u/s 154 of the Act against which the assessee also filed appeal before against rectification order passed by the Assessing Officer, the assessee had already preferred appeal before the Ld. CIT(A), we concur with the finding of the Ld. CIT(A) Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to We find that the in the case, the Computer Processing of the Income-tax Department,while processing return of income vide intimation order u/s 143(1) of the Act dated adjustment to the returned income for u/s 80P of the Act amounting to Rs. 1,65,88,880/ rectification of the adjustment and the Assessing Of passed order u/s 154 of the Act dated 06.07.2019 assessee preferred appeal against the said rectification order u/s 154 of the Act also, the Ld. CIT(A) rejected the appeal of the assessee against the adjustment made u/s 143(1) of the Act 5.0 It is found from records that the assessee had filed an appeal against a subsequent Order us 154 rectifying the instant Order underAppeal passed by the CPC, Bangalore for the same A. Yr. By virtue of the Doctrine of Merger, the imation us 143(1) dated 12/01/2017 had merged with the rectification Order us 154 dated 06/07/2019.” We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. We find that dismissed the appeal merely for the reason that dispute has already been merged in the rectification order dated 06.07.2019 u/s 154 of the Act against which the assessee before the Ld. CIT(A). In view of the fact that tification order passed by the Assessing Officer, the assessee had already preferred appeal before the Ld. CIT(A), we concur with the finding of the Ld. CIT(A) that Sai Prerana Co-op Credit Society Ltd. 15 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 rocessing Center ,while processing the return of income vide intimation order u/s 143(1) of the Act dated to the returned income for deduction 1,65,88,880/-.Theassessee and the Assessing Officer ct dated 06.07.2019. Since the assessee preferred appeal against the said rectification order u/s the Ld. CIT(A) rejected the appeal of the made u/s 143(1) of the Act, 5.0 It is found from records that the assessee had filed an appeal against a subsequent Order us 154 rectifying the instant Order underAppeal passed by the CPC, Bangalore for the same A. Yr. By virtue of the Doctrine of Merger, the imation us 143(1) dated 12/01/2017 had merged with the We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. We find that dismissed the appeal merely for the reason that dispute has already been merged in the rectification order dated 06.07.2019 u/s 154 of the Act against which the assessee the Ld. CIT(A). In view of the fact that tification order passed by the Assessing Officer, the assessee had already preferred appeal before the Ld. CIT(A), we that no separate adjudication is required on 143(1) when the same adjustment for disallowance of deduction u/s 80P was raised in appeal filed with relation to consequent rectification order. The ground accordingly dismissed. 12. Now we take up the cross appeal Revenue against order to order u/s 154 of the Act passed by the Assessing Officer for assessment year 2016 ITA No. 192/mum/2023 1. "Whether on th in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the amendment made by Finance Act, 2015 in sectio of the Act which excludes the Cooperative Banks from the definition of "Co deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co operative Banks are not that specie of genus co society, which are entitled to claim deduction under the special provisions of Chapter VIA in the form of Section 80P of the Act." 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT( u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub Section 80P of the Act to exclude the 80P of the Act altogether to any co secondly, ignoring the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to required on the issue of adjustment made u/s me adjustment for disallowance of deduction u/s 80P was raised in appeal filed with relation to consequent The grounds of appeal of the assessee are accordingly dismissed. Now we take up the cross appeals of the assessee and the evenue against order of the ld CIT(A) dated 30/11/2022 in relation u/s 154 of the Act passed by the Assessing Officer for assessment year 2016-17. The grounds raised by the Revenue ITA No. 192/mum/2023 are reproduced as under: 1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the definition of "Co- operative Society" and requiring them to deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co anks are not that specie of genus co society, which are entitled to claim deduction under the special provisions of Chapter VIA in the form of Section 80P 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub-section (4) in Section 80P of the Act to exclude the applicability of Section 80P of the Act altogether to any co-operative bank and secondly, ignoring the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and Sai Prerana Co-op Credit Society Ltd. 16 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 the issue of adjustment made u/s me adjustment for disallowance of deduction u/s 80P was raised in appeal filed with relation to consequent of appeal of the assessee are of the assessee and the of the ld CIT(A) dated 30/11/2022 in relation u/s 154 of the Act passed by the Assessing Officer for 17. The grounds raised by the Revenue in e facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the n 194A(3)(v) of the Act which excludes the Cooperative Banks from the operative Society" and requiring them to deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co- anks are not that specie of genus co-operative society, which are entitled to claim deduction under the special provisions of Chapter VIA in the form of Section 80P 2. "Whether on the facts and circumstances of the case and A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the section (4) in applicability of Section operative bank and secondly, ignoring the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and scope even the interest income earned by the respondent assessee, a co and this exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction under Section 80P(2)( 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that whether the assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co operative Banks does not make a difference as far as the character of the income earned by assesse and it does not partake the character of its operational income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction /s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussin related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 IT 74) has specifically decided the Question of Law about the allowability of interest earned from deposits Income Tax Act in favour of the Revenue." 12.1 The grounds raised by the assessee 221/Mum/2023 are reproduced as under: 1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in disallowing80P deduction on account of interest receiv 2. The Appellant keep its right reserve to add/modify/ delete the any grounds of appeal. Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to scope even the interest income earned by the respondent assessee, a co-operative Society from a Co-operative Bank and this exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction under Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co operative Banks does not make a difference as far as the character of the income earned by assessee is concerned and it does not partake the character of its operational income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." ther on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction /s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 IT 74) has specifically decided the Question of Law about the allowability of interest earned from deposits- with Cooperative Bank u/s. 80P(2)(d) of the ome Tax Act in favour of the Revenue." The grounds raised by the assessee are reproduced as under: 1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in disallowing80P deduction on account of interest received from otherthan cooperative bank. 2. The Appellant keep its right reserve to add/modify/ delete the any grounds of appeal. Sai Prerana Co-op Credit Society Ltd. 17 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 scope even the interest income earned by the respondent operative Bank and this exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that deposits and investment of surplus funds of assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co- operative Banks does not make a difference as far as the e is concerned and it does not partake the character of its operational income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." ther on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction /s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court g the law and various related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 IT 74) has specifically decided the Question of Law about the allowability of interest earned with Cooperative Bank u/s. 80P(2)(d) of the The grounds raised by the assessee in ITA No. 1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in disallowing80P deduction on account of ed from otherthan cooperative bank. 2. The Appellant keep its right reserve to add/modify/ delete 13. Facts in brief of the case are that during the year under consideration, the assessee earned interest of Rs.2,85,18,226/ from deposits with co interest of Rs.4,53,592/ nationalized banks. The Assessing Officer in the rectification order rejected the claim of the assessee of deduction u/s 80P(2)(d) of t Act in respect of both interest from co nationalized bank. On further appeal, the Ld. CIT(A) allowed the claim of the assessee u/s 80P(2)(d) of the Act in respect of interest earned from deposits kept with co give any finding in respect of interest from nationalized banks. 14. Before us, the Revenue is aggrieved with respect to deduction allowed by the Ld. CIT(A) in respect of bank whereas the assessee is aggrieved with in respect of interest 15. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. As far as ground of appeal of the Revenue are Tribunal in the case of the assessee for assessment year 2014 ITA No. 5741/Mum/2018 Hon’ble Karnataka High Court in the case of Cooperative Sales Society (392 ITR 74) Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to Facts in brief of the case are that during the year under consideration, the assessee earned interest of Rs.2,85,18,226/ deposits with co-operative banks of Rs.39,28,73,877/ interest of Rs.4,53,592/- from deposits of Rs.46,03,225/ nationalized banks. The Assessing Officer in the rectification order rejected the claim of the assessee of deduction u/s 80P(2)(d) of t Act in respect of both interest from co-operative bank as well as nationalized bank. On further appeal, the Ld. CIT(A) allowed the claim of the assessee u/s 80P(2)(d) of the Act in respect of interest earned from deposits kept with co-operative banks ho give any finding in respect of interest from nationalized banks. Before us, the Revenue is aggrieved with respect to deduction allowed by the Ld. CIT(A) in respect of interest from cooperative bank whereas the assessee is aggrieved with deduction not allowed in respect of interest from the nationalized bank. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. As far as ground of appeal of the Revenue are concerned, we fin Tribunal in the case of the assessee for assessment year 2014 ITA No. 5741/Mum/2018, after considering the decision of the Hon’ble Karnataka High Court in the case of PCIT v. Totagar’s Cooperative Sales Society (392 ITR 74), which was reli Sai Prerana Co-op Credit Society Ltd. 18 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 Facts in brief of the case are that during the year under consideration, the assessee earned interest of Rs.2,85,18,226/- operative banks of Rs.39,28,73,877/- and from deposits of Rs.46,03,225/- with nationalized banks. The Assessing Officer in the rectification order rejected the claim of the assessee of deduction u/s 80P(2)(d) of the operative bank as well as nationalized bank. On further appeal, the Ld. CIT(A) allowed the claim of the assessee u/s 80P(2)(d) of the Act in respect of interest operative banks however did not give any finding in respect of interest from nationalized banks. Before us, the Revenue is aggrieved with respect to deduction interest from cooperative deduction not allowed We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. As far as concerned, we find that the Tribunal in the case of the assessee for assessment year 2014-15 in , after considering the decision of the PCIT v. Totagar’s which was relied upon by the Assessing Officer observing as under: “7. Having heard the rival contentions, we noticed that there is merit in the contentions of the assessee as it is supported by the order passed by the SMC Bench in Citiscape Co the decision rendered by the Division Bench in the case of Sea Grean Co sake of convenience, we extract below the operative portion of the order passed by the Division Bench in the case of Sea Grean Co-operative Housing Society Ltd.(supra): “5. We have carefully considered the rival submissions. The facts lie in a narrow compass, inasmuch as, the appellant is a Cooperative society, whos interest earned on deposits with another Cooperative bank. Accordingly, such income was claimed as exempt under section 80P(2)(d) of the Act. The claim has been denied primarily on account of the fact that section 80P(2)(d) o Act relates to the income earned from a Co In this context, the decision of the MumbaiTribunal in the case of Lands End Co is rendered under identical circumstances and the following discussion is relevant: “8.3 We have heard the rival submissions and perused the material on record. We find that the CIT(A) enhanced the income of the assessee by rejecting the deduction u/s 80P(2)(d) of the Act of Rs.14,88,107/ investment wit in the case of Bandra Samruddihi Cooperative Housing Society Ltd.(Supra) which was passed on the basis of the decision passed by the Hon’ble Supreme Court in the case of Totagar’s Cooperative Sale Society Ltd. Totagar’s Co Hon’ble Supreme Court while interpreting the section 80P(2)(a)(i) of the Act held that surplus funds not immediately required in the business and invested in the short term deposit would be assessable under the head “income from other sources” where the Cooperative society is engaged in Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to by the Assessing Officer, has allowed the claim of the assessee 7. Having heard the rival contentions, we noticed that there is merit in the contentions of the assessee as it is supported by the order passed by the SMC Bench in the case of Citiscape Co-operative Housing Society Ltd. (supra) and also the decision rendered by the Division Bench in the case of Sea Grean Co-operative Housing Society Ltd. (supra). For the sake of convenience, we extract below the operative portion the order passed by the Division Bench in the case of Sea operative Housing Society Ltd.(supra): “5. We have carefully considered the rival submissions. The facts lie in a narrow compass, inasmuch as, the appellant is operative society, whose income, inter-alia, included interest earned on deposits with another Cooperative bank. Accordingly, such income was claimed as exempt under section 80P(2)(d) of the Act. The claim has been denied primarily on account of the fact that section 80P(2)(d) o Act relates to the income earned from a Co-operative society. In this context, the decision of the MumbaiTribunal in the case of Lands End Co-operative Housing Society Ltd. (supra) is rendered under identical circumstances and the following n is relevant:- “8.3 We have heard the rival submissions and perused the material on record. We find that the CIT(A) enhanced the income of the assessee by rejecting the deduction u/s 80P(2)(d) of the Act of Rs.14,88,107/- being interest on investment with other Coop. banks by following the decision in the case of Bandra Samruddihi Cooperative Housing Society Ltd.(Supra) which was passed on the basis of the decision passed by the Hon’ble Supreme Court in the case of Totagar’s Cooperative Sale Society Ltd. In the case of Totagar’s Co-operative Sale Society Ltd v/s ITAT (supra) the Hon’ble Supreme Court while interpreting the section 80P(2)(a)(i) of the Act held that surplus funds not immediately required in the business and invested in the short term would be assessable under the head “income from other sources” where the Cooperative society is engaged in Sai Prerana Co-op Credit Society Ltd. 19 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 has allowed the claim of the assessee 7. Having heard the rival contentions, we noticed that there is merit in the contentions of the assessee as it is supported the case of operative Housing Society Ltd. (supra) and also the decision rendered by the Division Bench in the case of operative Housing Society Ltd. (supra). For the sake of convenience, we extract below the operative portion the order passed by the Division Bench in the case of Sea “5. We have carefully considered the rival submissions. The facts lie in a narrow compass, inasmuch as, the appellant is alia, included interest earned on deposits with another Cooperative bank. Accordingly, such income was claimed as exempt under section 80P(2)(d) of the Act. The claim has been denied primarily on account of the fact that section 80P(2)(d) of the operative society. In this context, the decision of the MumbaiTribunal in the operative Housing Society Ltd. (supra) is rendered under identical circumstances and the following “8.3 We have heard the rival submissions and perused the material on record. We find that the CIT(A) enhanced the income of the assessee by rejecting the deduction u/s being interest on h other Coop. banks by following the decision in the case of Bandra Samruddihi Cooperative Housing Society Ltd.(Supra) which was passed on the basis of the decision passed by the Hon’ble Supreme Court in the case of In the case of operative Sale Society Ltd v/s ITAT (supra) the Hon’ble Supreme Court while interpreting the section 80P(2)(a)(i) of the Act held that surplus funds not immediately required in the business and invested in the short term would be assessable under the head “income from other sources” where the Cooperative society is engaged in carrying on business of banking or providing credit facilities to its members and consequently no deduction is allowable u/s 80P(2)(a)(i) of the Act issue is whether a co income on investment with cooperative banks is entitled to deduction u/s 80P(2)(d). The provisions of Section 80P(2)(d) of the Act provide deduction in respect of interest or dividend on investments made with other Cooperative society. For the purposes of better proper understanding of these two provisions the relevant extract of the section are reproduced below: 80P: Deduction in respect of income of co 1. Where, in the case of an assesssee being a co society, the gross total income, includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this s specified in sub the assessee. 2. The sums referred to in sub following, namely: engaged in- (i) Carrying on the business of facilities to its members. The whole of the amount of profits and gains of business attributable to any one or more of much attributes. (d)In respect of any income by way of interest or dividends derived by the co any other co- From the close perusal of the provisions of u/s 80P(2)(a)(i) and 80P(2)(d) it is clear that the former deals with deduction in respect of profits and gain of busines operative society carrying on business of banking or providing credit facilities to its members if the said income is assessable as income from business whereas latter provides for deduction in respect of income by way interest and dividend derived by assessee from its investments with other cooperative society. Thus it is amply clear that a cooperative society can only avail deduction u/s 80P(2)(d)(i) in respect of Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to carrying on business of banking or providing credit facilities to its members and consequently no deduction is allowable u/s 80P(2)(a)(i) of the Act. Whereas in the case before us the issue is whether a co-operative society which has derived income on investment with cooperative banks is entitled to deduction u/s 80P(2)(d). The provisions of Section 80P(2)(d) of the Act provide deduction in respect of income by way of interest or dividend on investments made with other Cooperative society. For the purposes of better proper understanding of these two provisions the relevant extract of the section are reproduced below: 80P: Deduction in respect of co-operative Societies. 1. Where, in the case of an assesssee being a co society, the gross total income, includes any income referred section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. 2. The sums referred to in sub-section (1) shall be the following, namely:- (a)In the case of a co-operative society (i) Carrying on the business of banking or providing credit facilities to its members. The whole of the amount of profits and gains of business attributable to any one or more of much attributes. (d)In respect of any income by way of interest or dividends derived by the co-operative society from its investments with -operative society, the whole of such income.” From the close perusal of the provisions of u/s 80P(2)(a)(i) and 80P(2)(d) it is clear that the former deals with deduction in respect of profits and gain of business in case of the co operative society carrying on business of banking or providing credit facilities to its members if the said income is assessable as income from business whereas latter provides for deduction in respect of income by way interest and dend derived by assessee from its investments with other cooperative society. Thus it is amply clear that a cooperative society can only avail deduction u/s 80P(2)(d)(i) in respect of Sai Prerana Co-op Credit Society Ltd. 20 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 carrying on business of banking or providing credit facilities to its members and consequently no deduction is allowable . Whereas in the case before us the operative society which has derived income on investment with cooperative banks is entitled to deduction u/s 80P(2)(d). The provisions of Section 80P(2)(d) income by way of interest or dividend on investments made with other Cooperative society. For the purposes of better proper understanding of these two provisions the relevant extract of the section are reproduced below: 80P: Deduction in respect 1. Where, in the case of an assesssee being a co-operative society, the gross total income, includes any income referred section (2), there shall be deducted, in accordance ection, the sums section (2), in computing the total income of section (1) shall be the operative society banking or providing credit facilities to its members. The whole of the amount of profits and gains of business attributable to any one or more of (d)In respect of any income by way of interest or dividends iety from its investments with operative society, the whole of such income.” From the close perusal of the provisions of u/s 80P(2)(a)(i) and 80P(2)(d) it is clear that the former deals with deduction s in case of the co- operative society carrying on business of banking or providing credit facilities to its members if the said income is assessable as income from business whereas latter provides for deduction in respect of income by way interest and dend derived by assessee from its investments with other cooperative society. Thus it is amply clear that a cooperative society can only avail deduction u/s 80P(2)(d)(i) in respect of its income assessable as business income and not as income from other so providing credit facilities to its members and has income assessable under the head business whereas for claiming u/s 80P(2)(d) it must have income of interest and dividend on investments with other Co be engaged in the banking for providing credit facilities to its members and the head under which the income is assessable is not material for the claim of deduction under this section. Now will evaluate the assessee’s case in light of the decision of the Hon’ble Supreme court. The Honble Supreme Court in the case of Totagar’s Co Sale Society Ltd.(Supra) held that a society has surplus funds which are invested in short term deposits where the society is engaged in credit facilities to its members in that case the said income from short term deposits shall be treated and assessed as income from other sources and deduction u/s 80(P)(2)(a)(i) would not be available meaning thereby t 80(P)(2)(a)(i) is available only in respect of income which is assessable as business income and not as income from other sources. Whereas in distinction to this , the provisions of section 80(P)(2)(d) of the Act provides for deduction in of income of a coop society by way of interest or dividend from its investments with other coop society if such income is included in the gross total income of the such coop society. In view these facts and circumstances we are of the considered view that the assessee is entitled to the deduction of Rs. 14,88,107/- deposits with coop. banks and therefore the appeal of the assessee is allowed by reversing the order of the CIT(A). The AO is directed ac 5.1 It is clear that the Tribunal in the case of Lands End Cooperative Housing Society Ltd. (supra) has considered a similar situation and allowed the claim of the assessee. We find that the CIT(A) has placed reliance on the decision of the Ahmedabad Bench of the Tribunal in the case of State Bank of India Employees Co taxman.com 367. It is further noted by the CIT(A) that the said decision of the Ahmedabad Bench of the Tribunal has been referred to by the SMC Benc case of Shri Saidatta Cooperative Credit Society Ltd. (supra). Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to its income assessable as business income and not as income from other sources if it carries on business of the banking or providing credit facilities to its members and has income assessable under the head business whereas for claiming u/s 80P(2)(d) it must have income of interest and dividend on investments with other Co-operative society may or may not be engaged in the banking for providing credit facilities to its members and the head under which the income is assessable is not material for the claim of deduction under this section. Now will evaluate the assessee’s case in light of the decision of the Hon’ble Supreme court. The Honble Supreme Court in the case of Totagar’s Co Sale Society Ltd.(Supra) held that a society has surplus funds which are invested in short term deposits where the society is engaged in the business of banking or providing credit facilities to its members in that case the said income from short term deposits shall be treated and assessed as income from other sources and deduction u/s 80(P)(2)(a)(i) would not be available meaning thereby that deduction u/s 80(P)(2)(a)(i) is available only in respect of income which is assessable as business income and not as income from other sources. Whereas in distinction to this , the provisions of section 80(P)(2)(d) of the Act provides for deduction in of income of a coop society by way of interest or dividend from its investments with other coop society if such income is included in the gross total income of the such coop society. In view these facts and circumstances we are of the considered iew that the assessee is entitled to the deduction of Rs. in respect of interest received/derived by it on deposits with coop. banks and therefore the appeal of the assessee is allowed by reversing the order of the CIT(A). The AO is directed accordingly. 5.1 It is clear that the Tribunal in the case of Lands End Cooperative Housing Society Ltd. (supra) has considered a similar situation and allowed the claim of the assessee. We find that the CIT(A) has placed reliance on the decision of the dabad Bench of the Tribunal in the case of State Bank of India Employees Co-operative Credit Society Ltd 57 taxman.com 367. It is further noted by the CIT(A) that the said decision of the Ahmedabad Bench of the Tribunal has been referred to by the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd. (supra). Sai Prerana Co-op Credit Society Ltd. 21 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 its income assessable as business income and not as income urces if it carries on business of the banking or providing credit facilities to its members and has income assessable under the head business whereas for claiming u/s 80P(2)(d) it must have income of interest and dividend on ative society may or may not be engaged in the banking for providing credit facilities to its members and the head under which the income is assessable is not material for the claim of deduction under this section. Now will evaluate the assessee’s case in the light of the decision of the Hon’ble Supreme court. The Honble Supreme Court in the case of Totagar’s Co-operative Sale Society Ltd.(Supra) held that a society has surplus funds which are invested in short term deposits where the the business of banking or providing credit facilities to its members in that case the said income from short term deposits shall be treated and assessed as income from other sources and deduction u/s 80(P)(2)(a)(i) hat deduction u/s 80(P)(2)(a)(i) is available only in respect of income which is assessable as business income and not as income from other sources. Whereas in distinction to this , the provisions of section 80(P)(2)(d) of the Act provides for deduction in respect of income of a coop society by way of interest or dividend from its investments with other coop society if such income is included in the gross total income of the such coop society. In view these facts and circumstances we are of the considered iew that the assessee is entitled to the deduction of Rs. in respect of interest received/derived by it on deposits with coop. banks and therefore the appeal of the assessee is allowed by reversing the order of the CIT(A). The 5.1 It is clear that the Tribunal in the case of Lands End Cooperative Housing Society Ltd. (supra) has considered a similar situation and allowed the claim of the assessee. We find that the CIT(A) has placed reliance on the decision of the dabad Bench of the Tribunal in the case of State Bank operative Credit Society Ltd 57 taxman.com 367. It is further noted by the CIT(A) that the said decision of the Ahmedabad Bench of the Tribunal has h of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd. (supra). In our view, the reliance placed by the CIT(A) on the judgment of the Ahmedabad Bench of the Tribunal is quite untenable, inasmuch as, in the said case the interest in question was earned from deposits kept with State Bank of India. Obviously, State Bank of India is not a Co society so as to justify the claim that such interest earnings fall within the scope of section 80P(2)(d) of the Act. Further, the reliance placed by the CIT(A) on the decision of the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd.(supra) is also of no avail, inasmuch as, the Bench merely set file of the Assessing Of in the case of Lands End Co Ltd(supra), the claim of exemption under section 80P(2)(d) of the Act with respect to the interest earned from a Co operative bank has been upheld. Therefore, in vi said precedent, the claim of the assessee deserves to be allowed. We hold so. 8. In view of the foregoing, we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to allow deduction u/s 80P(2)(d) of the Act in respec earned by the assessee from the deposits kept with Co operative Banks. 15.1 Respectfully following the finding of the Tribunal case of the assessee itself the Ld CIT(A) on the precedents. The grounds of appeal of the Revenue are accordingly dismissed. 15.2 As far as grounds of the 80P(2)(d) of the Act for interest from other than cooperative bank i.e nationalized bank,are concerned, decision of the Tribunal in ITA No. 604/Pun/2014 in the case of Shri Laxmi Narayan NagriSahkari Pat SansthanMaryadait Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to In our view, the reliance placed by the CIT(A) on the judgment of the Ahmedabad Bench of the Tribunal is quite untenable, inasmuch as, in the said case the interest in question was earned from deposits kept with State Bank of India. Obviously, State Bank of India is not a Co society so as to justify the claim that such interest earnings fall within the scope of section 80P(2)(d) of the Act. Further, he reliance placed by the CIT(A) on the decision of the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd.(supra) is also of no avail, inasmuch as, the Bench merely set-aside the matter to the file of the Assessing Officer for examination afresh, whereas in the case of Lands End Co-operative Housing Society Ltd(supra), the claim of exemption under section 80P(2)(d) of the Act with respect to the interest earned from a Co operative bank has been upheld. Therefore, in vi said precedent, the claim of the assessee deserves to be allowed. We hold so. 8. In view of the foregoing, we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to allow deduction u/s 80P(2)(d) of the Act in respect of interest earned by the assessee from the deposits kept with Co operative Banks.” Respectfully following the finding of the Tribunal case of the assessee itself, we do not find any error in the order of the Ld CIT(A) on the issue-in-dispute for following the binding precedents. The grounds of appeal of the Revenue are accordingly As far as grounds of the assesseeseeking deduction u/s 80P(2)(d) of the Act for interest from other than cooperative bank i.e are concerned, the ld counsel relied on the Tribunal in ITA No. 604/Pun/2014 in the case of Shri Laxmi Narayan NagriSahkari Pat SansthanMaryadait Sai Prerana Co-op Credit Society Ltd. 22 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 In our view, the reliance placed by the CIT(A) on the judgment of the Ahmedabad Bench of the Tribunal is quite untenable, inasmuch as, in the said case the interest income in question was earned from deposits kept with State Bank of India. Obviously, State Bank of India is not a Co-operative society so as to justify the claim that such interest earnings fall within the scope of section 80P(2)(d) of the Act. Further, he reliance placed by the CIT(A) on the decision of the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd.(supra) is also of no avail, aside the matter to the ficer for examination afresh, whereas operative Housing Society Ltd(supra), the claim of exemption under section 80P(2)(d) of the Act with respect to the interest earned from a Co- operative bank has been upheld. Therefore, in view of the said precedent, the claim of the assessee deserves to be 8. In view of the foregoing, we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to allow t of interest earned by the assessee from the deposits kept with Co- Respectfully following the finding of the Tribunal (supra) in the , we do not find any error in the order of dispute for following the binding precedents. The grounds of appeal of the Revenue are accordingly assesseeseeking deduction u/s 80P(2)(d) of the Act for interest from other than cooperative bank i.e the ld counsel relied on the Tribunal in ITA No. 604/Pun/2014 in the case of Shri Laxmi Narayan NagriSahkari Pat SansthanMaryadait for assessment year 2010 Culcutta in the case of PCIT Vs Gunja Samabay Krishi Unnayan Samity Ltd reported in (2013) 147 taxmann.com 518 (Calcutta). On perusal of the said term deposits with scheduled bank has been held as eligible by the Tribunal (supra) and Calcutta High Court (supra) 80P(2)(a)(i) of the Act and not under the section 80P(2)(d) of the Act. We are of the view that the Ld. CIT(A) has not adjudicated the issue in dispute of eligibility of deduction of interest from scheduled b u/s 80P(2)(d) of the Act, more opportunity to appear before the Ld CIT(A) so that he can give his finding on the matter. I feel it appropriate to restore this issue bac CIT(A) for deciding after providing adequate opportunity of being heard to the assessee. of the assessee is accordingly 16. Now we take up the cross Revenue for assessment year 2017 193/M/2023 respectively reproduced as under: 1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was corre u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to assessment year 2010-11 and decision of hon’ble case of PCIT Vs Gunja Samabay Krishi Unnayan Samity Ltd reported in (2013) 147 taxmann.com 518 (Calcutta). On perusal of the said decisions, we find that interest from short term deposits with scheduled bank has been held as eligible by the and Calcutta High Court (supra) ct and not under the section 80P(2)(d) of the Act. view that the Ld. CIT(A) has not adjudicated the issue of eligibility of deduction of interest from scheduled b Act,therefore the assessee should be given one more opportunity to appear before the Ld CIT(A) so that he can give his finding on the matter. In the interest of the natural feel it appropriate to restore this issue back to the file of the Ld. CIT(A) for deciding after providing adequate opportunity of being to the assessee. In the circumstances, the ground of appeal of the assessee is accordingly allowed for statistical purposes Now we take up the cross-appeals of the assessee and the Revenue for assessment year 2017-18 in ITA No. 219 & respectively. The grounds raised by the Revenue are : 1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the Sai Prerana Co-op Credit Society Ltd. 23 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 and decision of hon’ble High Court of case of PCIT Vs Gunja Samabay Krishi Unnayan Samity Ltd reported in (2013) 147 taxmann.com 518 (Calcutta). we find that interest from short- term deposits with scheduled bank has been held as eligible by the and Calcutta High Court (supra) under section ct and not under the section 80P(2)(d) of the Act. view that the Ld. CIT(A) has not adjudicated the issue of eligibility of deduction of interest from scheduled bank the assessee should be given one more opportunity to appear before the Ld CIT(A) so that he can give natural justice, we k to the file of the Ld. CIT(A) for deciding after providing adequate opportunity of being In the circumstances, the ground of appeal allowed for statistical purposes. eals of the assessee and the 18 in ITA No. 219 & The grounds raised by the Revenue are 1. "Whether on the facts and circumstances of the case and ct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the definition of "Co deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co operative Banks are not that specie of genus co society, which are entitle special provisions of ChapterVIA in the form of Section 80P of the Act." 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act earned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub Section 80P of the Act to exclude the applicability of Section 80P of the Act altogether to any co secondly, ignoring the fact that words used in section 80P(4) are "in relation to that can include within its ambit and scope even the interest income earned by the respondent assessee, a co-operative Society from a Co exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction under Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of assessee not immediately requ with Scheduled Bank or Nationalized Banks or with co operative Banks does not make a difference as far as the character of the income earned by assessee is concerned and it does not partake the character of its operational income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to inition of "Co- operative Society" and requiring them to deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co operative Banks are not that specie of genus co society, which are entitled to claim deduction under the special provisions of ChapterVIA in the form of Section 80P of 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub-section (4) in Section 80P of the Act to exclude the applicability of Section 80P of the Act altogether to any co-operative ba secondly, ignoring the fact that words used in section 80P(4) are "in relation to that can include within its ambit and scope even the interest income earned by the respondent assessee, operative Society from a Co-operative Bank and this ion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction under Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co operative Banks does not make a difference as far as the character of the income earned by assessee is concerned and it does not partake the character of its operational come from its activity as cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various Sai Prerana Co-op Credit Society Ltd. 24 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 operative Society" and requiring them to deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co- operative Banks are not that specie of genus co-operative d to claim deduction under the special provisions of ChapterVIA in the form of Section 80P of 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction in respect of interest earned from deposits in cooperative bank ignoring firstly, the section (4) in Section 80P of the Act to exclude the applicability of Section operative bank and secondly, ignoring the fact that words used in section 80P(4) are "in relation to that can include within its ambit and scope even the interest income earned by the respondent assessee, operative Bank and this ion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction under Section 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of ired for its purposes, is made with Scheduled Bank or Nationalized Banks or with co- operative Banks does not make a difference as far as the character of the income earned by assessee is concerned and it does not partake the character of its operational come from its activity as cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various related issues in the case of PCIT Vs Totagar's Coo Sales Society(392 ITR 74) has specifically decided the Question of Law about the allowability of interest earned from deposits with Cooperative Bank u/s. 80P(2)(d) of the Income Tax Act in favour of the Revenue." 16.1 The ground raised by the asse 1. On the facts and circumstances of the case in law, Ld. CIT(A) erred in disallowing 80P deduction on account of interest received from other than cooperative bank. 17. The grounds raised by the assessee and Revenue appeals are identical to grounds raised in cross 2016-17 and therefore, same are adjudicated 18. Now we take up the appeal of the assessee No.218/Mum/2023 272A(1)(d) of the Act. The relevant ground 1. On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming penalty of Rs.50,000/ of the Act. 19. Briefly stated facts of the case are that during assessment proceedings u/s 143(3) of the Act statutory notices u/s 142(1) of the Act dated 09.08.2018 21.08.2018; 25.09.2018 the Assessing Officer those notices were not responded/complied the assessee. It was contended by the assessee that counsel of the assessee was busy on some occasion return/audit and on ot Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to related issues in the case of PCIT Vs Totagar's Coo Sales Society(392 ITR 74) has specifically decided the Question of Law about the allowability of interest earned from deposits with Cooperative Bank u/s. 80P(2)(d) of the Income Tax Act in favour of the Revenue." The ground raised by the assessee is reproduced as under: 1. On the facts and circumstances of the case in law, Ld. CIT(A) erred in disallowing 80P deduction on account of interest received from other than cooperative bank. The grounds raised by the assessee and Revenue are identical to grounds raised in cross- and therefore, same are adjudicated mutatis mutandis Now we take up the appeal of the assessee No.218/Mum/2023 for AY 2017-18 in relation to penalty u/s the Act. The relevant ground is reproduced as under: On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming penalty of Rs.50,000/ Briefly stated facts of the case are that during assessment u/s 143(3) of the Act,the Assessing Officer issued statutory notices u/s 142(1) of the Act dated 09.08.2018 25.09.2018; 28.01.2019 and 30.09.2019. According to the Assessing Officer those notices were not responded/complied assessee. It was contended by the assessee that counsel of the assessee was busy on some occasions in complying filing of on other occasions, he had undergone Sai Prerana Co-op Credit Society Ltd. 25 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 ITR 74) has specifically decided the Question of Law about the allowability of interest earned from deposits with Cooperative Bank u/s. 80P(2)(d) of the ssee is reproduced as under: 1. On the facts and circumstances of the case in law, Ld. CIT(A) erred in disallowing 80P deduction on account of interest received from other than cooperative bank. The grounds raised by the assessee and Revenue in above -appeals for AY mutatis mutandis. Now we take up the appeal of the assessee bearing ITA 18 in relation to penalty u/s reproduced as under: On the facts and circumstances of the case in law, Ld. CIT(A) erred in confirming penalty of Rs.50,000/- u/s 270A Briefly stated facts of the case are that during assessment he Assessing Officer issued statutory notices u/s 142(1) of the Act dated 09.08.2018; 28.01.2019 and 30.09.2019. According to the Assessing Officer those notices were not responded/complied by assessee. It was contended by the assessee that counsel of the in complying filing of had undergone eye operation and therefore, no compliance was rejected the contention of the assessee and imposed penalty of Rs.10,000/- for each default totaling to Rs.50,000/ 20. On further appeal, the Ld. CIT( observing that there was no reasonable cause for failure on the part of the assessee. The relevant finding of the Ld. CIT(A) is reproduced as under: “4.0 The records of the assessee and its submissions were duly perused.It is fou and served on the assessee on 09/8/2018, 21/08/2018, 25/09/2018, 28/01/2019 and 30/09/2019, fixing the dates for hearing on 23/8/2018, 10/10/2018, 06/02/2019, 07/10/2019 and 12/12/2019 respectively but there was no compliance on the part of the assessee. As per Page 2 of the assessment order, assessment proceedings were completed as per provisions of Section 144 of the I.T. Act, 1961. Show cause notice u/s 274 r.w.s. 272A(1)(d) dated 17/12/2019 was issued and served on t was provided by issue of notice u/s 274 r.w.s. 272A(1)(d) dated 22/12/2020 and 25/03/2021. However, the assessee had put in a reply only on 06/01/2020 which reads inter alia as follows: "Dear Sir Our advocate went throught eye Operation therefore he did not appeared same time he submitted reply for the A. Yr 2012 2013-14." 4.1 The assessee also submitted a prescription from an eye specialist, perusal of which reveals that the purported Authorized Representative of cataract operation on 26/01/2019 and was advised rest for 3 weeks. 5.0 The plea taken by the assessee that the purported Authorized Representative was busy in finalization of accounts etc. or that he had undergone a cataract s does not appear to be a reasonable cause for failure on the Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to operation and therefore, no compliance was made. But the ld AO the contention of the assessee and imposed penalty of for each default totaling to Rs.50,000/-. On further appeal, the Ld. CIT(A) also upheld the penalty observing that there was no reasonable cause for failure on the part of the assessee. The relevant finding of the Ld. CIT(A) is reproduced 4.0 The records of the assessee and its submissions were duly perused.It is found that Notice us 142(1) were issued and served on the assessee on 09/8/2018, 21/08/2018, 25/09/2018, 28/01/2019 and 30/09/2019, fixing the dates for hearing on 23/8/2018, 10/10/2018, 06/02/2019, 07/10/2019 and 12/12/2019 respectively but there was no liance on the part of the assessee. As per Page 2 of the assessment order, assessment proceedings were completed as per provisions of Section 144 of the I.T. Act, 1961. Show cause notice u/s 274 r.w.s. 272A(1)(d) dated 17/12/2019 was issued and served on the assessee. Fresh opportunity was provided by issue of notice u/s 274 r.w.s. 272A(1)(d) dated 22/12/2020 and 25/03/2021. However, the assessee had put in a reply only on 06/01/2020 which reads inter alia as follows: "Dear Sir Our advocate went e Operation therefore he did not appeared same time he submitted reply for the A. Yr 2012-13 and A. Yr 4.1 The assessee also submitted a prescription from an eye specialist, perusal of which reveals that the purported Authorized Representative of the assessee had undergone a cataract operation on 26/01/2019 and was advised rest for 5.0 The plea taken by the assessee that the purported Authorized Representative was busy in finalization of accounts etc. or that he had undergone a cataract s does not appear to be a reasonable cause for failure on the Sai Prerana Co-op Credit Society Ltd. 26 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 made. But the ld AO the contention of the assessee and imposed penalty of @ of . A) also upheld the penalty observing that there was no reasonable cause for failure on the part of the assessee. The relevant finding of the Ld. CIT(A) is reproduced 4.0 The records of the assessee and its submissions were nd that Notice us 142(1) were issued and served on the assessee on 09/8/2018, 21/08/2018, 25/09/2018, 28/01/2019 and 30/09/2019, fixing the dates for hearing on 23/8/2018, 10/10/2018, 06/02/2019, 07/10/2019 and 12/12/2019 respectively but there was no liance on the part of the assessee. As per Page 2 of the assessment order, assessment proceedings were completed as per provisions of Section 144 of the I.T. Act, 1961. Show cause notice u/s 274 r.w.s. 272A(1)(d) dated 17/12/2019 he assessee. Fresh opportunity was provided by issue of notice u/s 274 r.w.s. 272A(1)(d) dated 22/12/2020 and 25/03/2021. However, the assessee had put in a reply only on 06/01/2020 which reads inter alia as follows: "Dear Sir Our advocate went e Operation therefore he did not appeared same 13 and A. Yr 4.1 The assessee also submitted a prescription from an eye specialist, perusal of which reveals that the purported the assessee had undergone a cataract operation on 26/01/2019 and was advised rest for 5.0 The plea taken by the assessee that the purported Authorized Representative was busy in finalization of accounts etc. or that he had undergone a cataract surgery does not appear to be a reasonable cause for failure on the part of the assessee / purported authorized representative to comply with the Notices issued over a period of more than one year and /or request for online adjournments. Even this basic work was not carried out. The reasons for non compliance to Notices are general in nature and without sufficient cause. The assessee had thus not demonstrated with documentary evidence any reasonable and just cause for failure on its part to carry out its dut There was a total non assessee during the entire course of assessment proceedings and the reasons put forth are not sufficient enough to exempt the assessee from the clutches of the provisions of section 272A(1)(d). 5.2 In the facts and under the circumstances of the case, I do not find any merit in the submissions of the assessee and as such the instant appeal is hereby disposed off as "DISMISSED." 21. We have heard rival submission of the parties on the is dispute and perused the relevant material on record. We find that the Assessing Officer has levied penalty u/s 272A of the Act for non-compliance on the part of the assessee for various notices issued u/s 142(1) of the Act. We find that regarding th 142(1) of the Act dated 09.08.2018, 21.08.2018 and 25.09.2018 was submitted by the assessee that the authorized the assessee was busy in and balance sheet income-tax return for assessment year 2018 tax audit taxes was on 30.09.2018 ,therefore, due to he could not respond to the Assessi dated 28.01.2019, it was submitted that representative of the Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to part of the assessee / purported authorized representative to comply with the Notices issued over a period of more than one year and /or request for online adjournments. Even this k was not carried out. The reasons for non compliance to Notices are general in nature and without sufficient cause. The assessee had thus not demonstrated with documentary evidence any reasonable and just cause for failure on its part to carry out its duties of compliance. There was a total non-cooperation on the part of the assessee during the entire course of assessment proceedings and the reasons put forth are not sufficient enough to exempt the assessee from the clutches of the provisions of section 5.2 In the facts and under the circumstances of the case, I do not find any merit in the submissions of the assessee and as such the instant appeal is hereby disposed off as "DISMISSED." We have heard rival submission of the parties on the is dispute and perused the relevant material on record. We find that the Assessing Officer has levied penalty u/s 272A of the Act for compliance on the part of the assessee for various notices issued u/s 142(1) of the Act. We find that regarding th 142(1) of the Act dated 09.08.2018, 21.08.2018 and 25.09.2018 was submitted by the assessee that the authorized representative of was busy in preparation of profit and loss account and balance sheet for tax payers as the due date of filing for tax return for assessment year 2018-19 in the case of non was 31.07.2019 and in the case of tax audit therefore, due to rush of filing income he could not respond to the Assessing Officer. Regarding the notice it was submitted that representative of the Sai Prerana Co-op Credit Society Ltd. 27 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 part of the assessee / purported authorized representative to comply with the Notices issued over a period of more than one year and /or request for online adjournments. Even this k was not carried out. The reasons for non- compliance to Notices are general in nature and without sufficient cause. The assessee had thus not demonstrated with documentary evidence any reasonable and just cause ies of compliance. cooperation on the part of the assessee during the entire course of assessment proceedings and the reasons put forth are not sufficient enough to exempt the assessee from the clutches of the provisions of section 5.2 In the facts and under the circumstances of the case, I do not find any merit in the submissions of the assessee and as such the instant appeal is hereby disposed off as We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. We find that the Assessing Officer has levied penalty u/s 272A of the Act for compliance on the part of the assessee for various notices issued u/s 142(1) of the Act. We find that regarding the notices u/s 142(1) of the Act dated 09.08.2018, 21.08.2018 and 25.09.2018, it representative of preparation of profit and loss account date of filing for 19 in the case of non- in the case of tax audit , was filing income-tax returns, ng Officer. Regarding the notice it was submitted that representative of the assessee was operated by a doctor for eye surgery said notice could not be 21.1 Regarding the notice due to date of filing of return of income for non could not respond to the notice. It was submitted on the part of the assessee that there was no deliberate intention to non the Assessing officer relied on the decision of the Tribunal in the case of International Finance India Ltd The relevant finding of the Tribunal “4. We have heard the submis Assessing Officer vide order dated 21/12/2019 has levied penalty of Rs.10,000/ non-compliance of the notice issued under section. 142(1) of the Act. Undisputedly, no explanation was fu assessee before the Assessing Officer for non the notice under section 142(1) of the Act. As per the contentions of ld. Authorized Representative of the assessee, the notice under section 142(1) of the Act was served on the assessee electronically. The Department was gradually moving towards e served to the assessee online/electronically and the year 2019 being the first year of this shift from physical to electronic mode coupled with the f carrying out any business operations during the relevant period and hence, was working on minimal employees, the employees of the assessee failed to take not of the notice issued electronically. We are satisfied that the assessee been able to show reasonable cause for not responding to the initial notice issued under section 142(1) of the Act. It is pertinent to mention here that subsequently on learning about ongoing assessment proceedings, the assessee appeared before the Ass Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to operated by a doctor for eye surgery said notice could not be complied. Regarding the notice for 30.09.2019, it was submitted that due to date of filing of return of income for non-tax audit cases could not respond to the notice. It was submitted on the part of the assessee that there was no deliberate intention to non Assessing officer. Before us, the Ld. Counsel of the assessee relied on the decision of the Tribunal in the case of International Finance India Ltd in ITA No. 1870/Mum/2020 The relevant finding of the Tribunal(supra) is reproduced as under: 4. We have heard the submissions made by rival sides. The Assessing Officer vide order dated 21/12/2019 has levied penalty of Rs.10,000/- under section 272A(1)(d) of the Act for compliance of the notice issued under section. 142(1) of the Act. Undisputedly, no explanation was furnished by the assessee before the Assessing Officer for non-compliance of the notice under section 142(1) of the Act. As per the contentions of ld. Authorized Representative of the assessee, the notice under section 142(1) of the Act was served on the essee electronically. The Department was gradually moving towards e-assessments and the notices were being served to the assessee online/electronically and the year 2019 being the first year of this shift from physical to electronic mode coupled with the fact that assessee was not carrying out any business operations during the relevant period and hence, was working on minimal employees, the employees of the assessee failed to take not of the notice issued electronically. We are satisfied that the assessee been able to show reasonable cause for not responding to the initial notice issued under section 142(1) of the Act. It is pertinent to mention here that subsequently on learning about ongoing assessment proceedings, the assessee appeared before the Assessing Officer and furnished the Sai Prerana Co-op Credit Society Ltd. 28 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 operated by a doctor for eye surgery and therefore it was submitted that tax audit cases, he could not respond to the notice. It was submitted on the part of the assessee that there was no deliberate intention to non-cooperate to ore us, the Ld. Counsel of the assessee relied on the decision of the Tribunal in the case of Triumph in ITA No. 1870/Mum/2020. is reproduced as under: sions made by rival sides. The Assessing Officer vide order dated 21/12/2019 has levied under section 272A(1)(d) of the Act for compliance of the notice issued under section. 142(1) of rnished by the compliance of the notice under section 142(1) of the Act. As per the contentions of ld. Authorized Representative of the assessee, the notice under section 142(1) of the Act was served on the essee electronically. The Department was gradually assessments and the notices were being served to the assessee online/electronically and the year 2019 being the first year of this shift from physical to act that assessee was not carrying out any business operations during the relevant period and hence, was working on minimal employees, the employees of the assessee failed to take not of the notice issued electronically. We are satisfied that the assessee has been able to show reasonable cause for not responding to the initial notice issued under section 142(1) of the Act. It is pertinent to mention here that subsequently on learning about ongoing assessment proceedings, the assessee essing Officer and furnished the requisite details. The Assessing Officer after taking note of the documents/submissions of the assessee has passed the assessment order under section 143(3) of the Act . It is not a case of absolute non Assessing Officer. 5. The first appellate authority has rejected the explanation furnished by the assessee for non issued under section 142(1) of the Act merely for the reason that during penalty proceedings unde the Act, the assessee has not stated the reasonable cause. We are not in agreement with the findings of CIT(A). The assessee has explained that about ongoing assessment proceedings the assessee came to know only on receipt of order u/s. 272A(1)(d) of the Act and demand notice. The explanation furnished by the assessee before the CIT(A) and before the Tribunal is consistent. We are satisfied that nonappearance of the assessee in response to the initial notice under section 142(1) of t year 2019 being the initial year of shift towards digital and electronic mode, the mistake appears to be bonafide. The assessee has been able to show reasonable cause for the failure to comply with statutory notice u/s. 142(1 Thus, in our view penalty levied u/s. 272A(1)(d) of the Act is unsustainable. The Assessing Officer is directed to delete the penalty.” 21.1.1 In the case of BU Bhandari Auto P ltd in ITA No. 324/PUN/2022 also the Tribunal deleted the penalty observing as under: “6. We have carefully gone through the impugned orders and find that on receipt of notice u/s 142(1) dated 05.09.2019, the appellant sought time for 15 days to file the required details and the requisite details were fi From the material on record, it appears that when the appellant sought time to file the details, thesaid application was not disposed of by the Assessing Officer either rejecting the said application or granting time. We also find that ultimately the assessment was completed by the Assessing Officer u/s 143(3) of the Act accepting the returned income. Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to requisite details. The Assessing Officer after taking note of the documents/submissions of the assessee has passed the assessment order under section 143(3) of the Act . It is not a case of absolute non-appearance of the assessee before the Assessing Officer. 5. The first appellate authority has rejected the explanation furnished by the assessee for non-compliance of the notice issued under section 142(1) of the Act merely for the reason that during penalty proceedings under section 272A(1)(d) of the Act, the assessee has not stated the reasonable cause. We are not in agreement with the findings of CIT(A). The assessee has explained that about ongoing assessment proceedings the assessee came to know only on receipt of u/s. 272A(1)(d) of the Act and demand notice. The explanation furnished by the assessee before the CIT(A) and before the Tribunal is consistent. We are satisfied that nonappearance of the assessee in response to the initial notice under section 142(1) of the Act was not deliberate. The year 2019 being the initial year of shift towards digital and electronic mode, the mistake appears to be bonafide. The assessee has been able to show reasonable cause for the failure to comply with statutory notice u/s. 142(1 Thus, in our view penalty levied u/s. 272A(1)(d) of the Act is unsustainable. The Assessing Officer is directed to delete the In the case of BU Bhandari Auto P ltd in ITA No. 324/PUN/2022 also the Tribunal deleted the penalty 6. We have carefully gone through the impugned orders and find that on receipt of notice u/s 142(1) dated 05.09.2019, the appellant sought time for 15 days to file the required details and the requisite details were filed on 04.11.2019. From the material on record, it appears that when the appellant sought time to file the details, thesaid application was not disposed of by the Assessing Officer either rejecting the said application or granting time. We also find that ltimately the assessment was completed by the Assessing Officer u/s 143(3) of the Act accepting the returned income. Sai Prerana Co-op Credit Society Ltd. 29 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 requisite details. The Assessing Officer after taking note of the documents/submissions of the assessee has passed the assessment order under section 143(3) of the Act . It is not a sessee before the 5. The first appellate authority has rejected the explanation compliance of the notice issued under section 142(1) of the Act merely for the reason r section 272A(1)(d) of the Act, the assessee has not stated the reasonable cause. We are not in agreement with the findings of CIT(A). The assessee has explained that about ongoing assessment proceedings the assessee came to know only on receipt of u/s. 272A(1)(d) of the Act and demand notice. The explanation furnished by the assessee before the CIT(A) and before the Tribunal is consistent. We are satisfied that nonappearance of the assessee in response to the initial he Act was not deliberate. The year 2019 being the initial year of shift towards digital and electronic mode, the mistake appears to be bonafide. The assessee has been able to show reasonable cause for the failure to comply with statutory notice u/s. 142(1) of the Act. Thus, in our view penalty levied u/s. 272A(1)(d) of the Act is unsustainable. The Assessing Officer is directed to delete the In the case of BU Bhandari Auto P ltd in ITA No. 324/PUN/2022 also the Tribunal deleted the penalty u/s 272A(1)(d) 6. We have carefully gone through the impugned orders and find that on receipt of notice u/s 142(1) dated 05.09.2019, the appellant sought time for 15 days to file the required led on 04.11.2019. From the material on record, it appears that when the appellant sought time to file the details, thesaid application was not disposed of by the Assessing Officer either rejecting the said application or granting time. We also find that ltimately the assessment was completed by the Assessing Officer u/s 143(3) of the Act accepting the returned income. Thus, it will conclusively prove that no prejudice was caused to the Assessing Officer on account of non notice u/s 142( Assessing Officer on the adjournment petition moved by the assessee would also enable the appellant to believe that the time to comply with the extension of time as prayed was granted. Therefore, in the circumsta considered opinion that it cannot be said that the appellant is guilty of contumacious conduct to comply with the notice u/s 142(1) of the Act. Thus, it is not a fit case for levy of penalty u/s 272A(1)(d) of the Act. Accordingly, we di Assessing Officer to delete the penalty of Rs.10,000/ Hence, the ground of appeal raised by the assessee in the present appeal stands allowed. 21.2 In the instant case before us also the assessee could not comply with the issue of notice authorized representative compliance on some respond due to medical emergency. In our opinion, the assessee should not be penalized for any part of the authorized representative of the assessee. The assessee has duly explained the reasons for non the failure in compliance to the notices is of the assessee. The reasons ci compliance of the statutory notices u/s 142(1) of the Act malafide. Also, we note that ultimately the assessment order has been passed u/s 143(3) of the Act. case being identical t assessee. Therefore, respectfully following the same, we set aside the order of the Ld. CIT(A) on the issue Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to Thus, it will conclusively prove that no prejudice was caused to the Assessing Officer on account of non-complying with the notice u/s 142(1) issued on 05.09.2019 and inaction of the Assessing Officer on the adjournment petition moved by the assessee would also enable the appellant to believe that the time to comply with the extension of time as prayed was granted. Therefore, in the circumstances, we are of the considered opinion that it cannot be said that the appellant is guilty of contumacious conduct to comply with the notice u/s 142(1) of the Act. Thus, it is not a fit case for levy of penalty u/s 272A(1)(d) of the Act. Accordingly, we di Assessing Officer to delete the penalty of Rs.10,000/ Hence, the ground of appeal raised by the assessee in the present appeal stands allowed.” In the instant case before us also the assessee could not issue of noticesdue to the reason that the authorized representative of assessee was occupied in some occasions and on one occasion, respond due to medical emergency. In our opinion, the assessee should not be penalized for any bonafide non-compliance on the part of the authorized representative of the assessee. The assessee has duly explained the reasons for non-compliance. In our the failure in compliance to the notices is not deliberate on the part of the assessee. The reasons cited by the assessee for of the statutory notices u/s 142(1) of the Act Also, we note that ultimately the assessment order has been passed u/s 143(3) of the Act. The circumstances of the instant case being identical to the cases cited by the Ld. Counsel of the assessee. Therefore, respectfully following the same, we set aside the order of the Ld. CIT(A) on the issue-in-dispute and direct to Sai Prerana Co-op Credit Society Ltd. 30 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 Thus, it will conclusively prove that no prejudice was caused complying with the 1) issued on 05.09.2019 and inaction of the Assessing Officer on the adjournment petition moved by the assessee would also enable the appellant to believe that the time to comply with the extension of time as prayed was nces, we are of the considered opinion that it cannot be said that the appellant is guilty of contumacious conduct to comply with the notice u/s 142(1) of the Act. Thus, it is not a fit case for levy of penalty u/s 272A(1)(d) of the Act. Accordingly, we direct the Assessing Officer to delete the penalty of Rs.10,000/-. Hence, the ground of appeal raised by the assessee in the In the instant case before us also the assessee could not the reason that the was occupied in regulatory occasion, he could not respond due to medical emergency. In our opinion, the assessee compliance on the part of the authorized representative of the assessee. The assessee compliance. In our opinion, not deliberate on the part assessee for failure in of the statutory notices u/s 142(1) of the Act are not Also, we note that ultimately the assessment order has The circumstances of the instant cited by the Ld. Counsel of the assessee. Therefore, respectfully following the same, we set aside dispute and direct to delete the penalty levied u/s 272A of the Act by the Assessing Officer. 22. Now we take up the cross Revenue for AY 2018 reproduced as under: “1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the definition of "Co deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co operative Banks are not that specie of genus co society, which are entitled to claim deduction unde special provisions of Chapter VIA in the form of Section 80P of the Act." 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub Section 80P of the Act to exclude the applicability of Section 80P of the Act altogether to any co secondly, ignoring are "in relation to" that can include within its ambit and scope even the interest income earned by the respondent assessee, a co and this exclusion by Section 80P(4) of without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction under Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) w Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to delete the penalty levied u/s 272A of the Act by the Assessing we take up the cross-appeals of the assessee and the Revenue for AY 2018-19. The grounds raised by the Revenue are : 1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the definition of "Co- operative Society" and requiring them to deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co operative Banks are not that specie of genus co society, which are entitled to claim deduction unde special provisions of Chapter VIA in the form of Section 80P 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest rned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub-section (4) in Section 80P of the Act to exclude the applicability of Section 80P of the Act altogether to any co-operative bank and secondly, ignoring the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and scope even the interest income earned by the respondent assessee, a co-operative Society from a Co-operative Bank and this exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction under Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction Sai Prerana Co-op Credit Society Ltd. 31 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 delete the penalty levied u/s 272A of the Act by the Assessing appeals of the assessee and the grounds raised by the Revenue are 1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the Society" and requiring them to deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co- operative Banks are not that specie of genus co-operative society, which are entitled to claim deduction under the special provisions of Chapter VIA in the form of Section 80P 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest rned from deposits in cooperative bank ignoring firstly, the section (4) in Section 80P of the Act to exclude the applicability of Section operative bank and the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and scope even the interest income earned by the respondent operative Bank the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction 3. "Whether on the facts and circumstances of the case and as correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, i with Scheduled Bank or Nationalized Banks or with co operative Banks does not make a difference as far as the character of the income earned by assessee is concerned and it does not partake the character of its operational income from its activity a same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(3 Question of Law about the allowability of interest earned from deposits with Cooperative Bank u/s. 80P(2)(d) of the Income Tax Act in favour of the Revenue.' 22.1 The grounds raised by the assessee are reproduced as u 1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming disallowing 80P deduction on account of interest received from other than cooperative bank. 2. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in 23. As far as ground No. 1 of the appeal of the assessee and ground No. 1 to 4 of the appeal of the Revenue are concerned same are identical to the cross year 2016-17 and theref mutandis. Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, i with Scheduled Bank or Nationalized Banks or with co operative Banks does not make a difference as far as the character of the income earned by assessee is concerned and it does not partake the character of its operational income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 IT 74) has specifically decided the Question of Law about the allowability of interest earned from deposits with Cooperative Bank u/s. 80P(2)(d) of the Income Tax Act in favour of the Revenue.' The grounds raised by the assessee are reproduced as u 1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming disallowing 80P deduction on account of interest received from other than cooperative 2. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming addition of Rs. 16,53,669/ As far as ground No. 1 of the appeal of the assessee and ground No. 1 to 4 of the appeal of the Revenue are concerned same are identical to the cross-appeals of the assessee for assessment 17 and therefore, same are adjudicated Sai Prerana Co-op Credit Society Ltd. 32 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co- operative Banks does not make a difference as far as the character of the income earned by assessee is concerned and it does not partake the character of its operational s cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various related issues in the case of PCIT Vs Totagar's Cooperative 92 IT 74) has specifically decided the Question of Law about the allowability of interest earned from deposits with Cooperative Bank u/s. 80P(2)(d) of the The grounds raised by the assessee are reproduced as under: 1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming disallowing 80P deduction on account of interest received from other than cooperative 2. On the facts and circumstances of the case in Law, Ld. confirming addition of Rs. 16,53,669/- As far as ground No. 1 of the appeal of the assessee and ground No. 1 to 4 of the appeal of the Revenue are concerned same appeals of the assessee for assessment ore, same are adjudicated mutatis 23.1 As far as ground No. 2 of the appeal of the assessee is concerned, the assessee has raised the issue of addition of Rs.16,53,669/-as other receipts shown under the from other sources”. The rele Officer in para 5, is extracted as under: Sr. No. Particulars 1. Interest from FD in Bank 2. Interest on bank savings 3. Dividend received from Mumbai Dist. Central Co 4. Other receipts 24. However, we find that ultimately in the assessment order, the Assessing Officer has assessed income u/s 56 of the Act in respect of interest earned from deposits with bank amounting to Rs.3,50,60,858/- and Rs.1,20,70,152/- , he Therefore, no addition has been made by the Assessing Officer in respect of other receipts of Rs.16,53,669/ ground No. 2 raised by the rejected. 25. Now, we take up the cross appeals filed the Revenue for AY 2020 reproduced as under: 1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction us.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to As far as ground No. 2 of the appeal of the assessee is the assessee has raised the issue of addition of s other receipts shown under the . The relevant table reproduced by the Assessing is extracted as under: Particulars Amount (in Rs.) Interest from FD in Bank Interest on bank savings Dividend received from Mumbai Dist. Central Co-op. Bank Other receipts However, we find that ultimately in the assessment order, the Assessing Officer has assessed income u/s 56 of the Act in respect of interest earned from deposits with bank amounting to and after reducing the corresponding expenses of , he made addition of Rs.2,46,59,438/ Therefore, no addition has been made by the Assessing Officer in respect of other receipts of Rs.16,53,669/- and therefore, the raised by the assessee being infructuous we take up the cross appeals filed by the assessee and the Revenue for AY 2020-21.The grounds raised by the Revenue are reproduced as under: 1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction us.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the Sai Prerana Co-op Credit Society Ltd. 33 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 As far as ground No. 2 of the appeal of the assessee is the assessee has raised the issue of addition of s other receipts shown under the head “ income vant table reproduced by the Assessing Amount (in Rs.) 3,50,60,858/- 9,817/- 5,246/- 16,53,669/- However, we find that ultimately in the assessment order, the Assessing Officer has assessed income u/s 56 of the Act in respect of interest earned from deposits with bank amounting to after reducing the corresponding expenses of made addition of Rs.2,46,59,438/-. Therefore, no addition has been made by the Assessing Officer in and therefore, the infructuous, same is by the assessee and .The grounds raised by the Revenue are 1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction us.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the amendment made by Finance Act of the Act which excludes the Cooperative Banks from the definition of "Co deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that th operative Banks are not that specie of genus co society, which are entitled to claim deduction under the special provisions of Chapter VIA in the form of Section 80P of the Act." 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub Section 80P of the Act 80P of the Act altogether to any co secondly, ignoring the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and scope even the interest income earned b assessee, a co and this exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction under Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co operative Banks does not make a difference as far as the character of the income e and it does not partake the character of its operational income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of t 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction us.80P(2)(d) of the Income Tax Act in respect of interest Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the definition of "Co- operative Society" and requiring them to deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that th operative Banks are not that specie of genus co society, which are entitled to claim deduction under the special provisions of Chapter VIA in the form of Section 80P 2. "Whether on the facts and circumstances of the case and law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub-section (4) in Section 80P of the Act to exclude the applicability of Section 80P of the Act altogether to any co-operative bank and secondly, ignoring the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and scope even the interest income earned by the respondent assessee, a co-operative Society from a Co-operative Bank and this exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co operative Banks does not make a difference as far as the character of the income earned by assessee is concerned and it does not partake the character of its operational income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction us.80P(2)(d) of the Income Tax Act in respect of interest Sai Prerana Co-op Credit Society Ltd. 34 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 , 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the operative Society" and requiring them to deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co- operative Banks are not that specie of genus co-operative society, which are entitled to claim deduction under the special provisions of Chapter VIA in the form of Section 80P 2. "Whether on the facts and circumstances of the case and law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the section (4) in to exclude the applicability of Section operative bank and secondly, ignoring the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and y the respondent operative Bank and this exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co- operative Banks does not make a difference as far as the arned by assessee is concerned and it does not partake the character of its operational income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be he Act." 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction us.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court in a detailed ju related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 IT 74) has specifically decided the Questionof Law about the allowability of interest earned from deposits. with Cooperative Bank u/s. 80P(2 Tax Act in favour of the Revenue." 25.1 The ground raised by the assessee is reproduced as under: “1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming disallowing 80P deduction on account of interest rece bank. 2. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming addition of Rs. 23,16,155/ 26. The grounds raised by the assessee and the Revenue in the above appeals are identical 2018-19 therefore, same are adjudicated 27. In the result, appeals of the assessee and the Revenue are decided as under: Sr. No. ITA No. 1. 217/M/2023 2. 220 /M/2023 3. 221/M/2023 4. 218/M/2023 5. 219/M/2023 6. 214M/2023 Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 IT 74) has specifically decided the Questionof Law about the allowability of interest earned from deposits. with Cooperative Bank u/s. 80P(2)(d) of the Income Tax Act in favour of the Revenue." The ground raised by the assessee is reproduced as under: 1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming disallowing 80P deduction on account of interest received from other than cooperative 2. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming addition of Rs. 23,16,155/ The grounds raised by the assessee and the Revenue in the above appeals are identical to grounds raised in assessment year 19 therefore, same are adjudicated mutatis mutandis In the result, appeals of the assessee and the Revenue are ITA No. Assessment Year 217/M/2023 2013-14 allowed 220 /M/2023 2016-17 dismissed 221/M/2023 2016-17 Allowed for statistical purposes 218/M/2023 2017-18 allowed 219/M/2023 2017-18 Allowed for statistical purposes 214M/2023 2020-21 Allowed partly for Sai Prerana Co-op Credit Society Ltd. 35 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 earned from deposits, though Hon'ble Karnataka High Court dgment discussing the law and various related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 IT 74) has specifically decided the Questionof Law about the allowability of interest earned from )(d) of the Income The ground raised by the assessee is reproduced as under: 1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming disallowing 80P deduction on ived from other than cooperative 2. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming addition of Rs. 23,16,155/-.” The grounds raised by the assessee and the Revenue in the aised in assessment year mutatis mutandis. In the result, appeals of the assessee and the Revenue are Result allowed dismissed Allowed for statistical purposes allowed Allowed for statistical purposes Allowed partly for 7. 215/M/2023 8. 192/M/2023 9. 193/M/2023 10. 194/M/2023 11. 195/M/2023 Order pronounced in the open Court on Sd/- (KULDIP SINGH JUDICIAL MEMBER Mumbai; Dated: 27/04/2023 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// Sai Prerana Co ITA Nos. 217, 220, 221, 192/M/2023& 192 to statistical purposes 215/M/2023 2018-19 Allowed partly for statistical purposes 192/M/2023 2016-17 dismissed 193/M/2023 2017-18 dismissed 194/M/2023 2018-19 dismissed 195/M/2023 2020-21 dismissed nounced in the open Court on 27/04/2023. Sd/ KULDIP SINGH) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Sai Prerana Co-op Credit Society Ltd. 36 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023 statistical purposes Allowed partly for statistical purposes dismissed dismissed dismissed dismissed /04/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai