THE COIMBATORE CO-OP HOUSING SOCIETY LIMITED, COIMBATORE V. PCIT-I, COIMBATORE

ITA 404/CHNY/2023

AI Insights

The case involves The Coimbatore Co-op Housing Society Ltd., which appealed against the revision order of the PCIT, Coimbatore-1. The PCIT had set aside the original assessment made by the AO for the assessment year 2017-18, which allowed a deduction for interest income from a savings bank account under section 80P(1). The PCIT found this deduction to be erroneous and prejudicial to the interest of the Revenue, as the income was not eligible for deduction under section 80P(1) in conjunction with section 80P(4), which restricts such deductions to income from specified sources, primarily cooperative banks and societies. The Tribunal dismissed the appeal, supporting the PCIT's decision and directing the AO to re-assess the matter after providing a fair hearing to the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132715 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-07-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 27-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3); 80P

Judgement Text

अपीलीय अिधकरण, ‘बी’ ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ एवं ᮰ी मनोज कुमार अᮕवाल, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 404/CHNY/2023 िनधाᭅरण वषᭅ /Assessment Year: 2017-18 The Coimbatore Co-op Housing Society Ltd., 15, Gopalapuram, Near Railway Station, Coimbatore – 641 018. PAN: AABAT 0297N v. The PCIT, Coimbatore-1 (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : None ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri S. Senthil Kumaran, CIT सुनवाई कᳱ तारीख/Date of Hearing : 19.07.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 19.07.2023 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: This appeal filed by the assessee is directed against the Revision order passed by the Principal Commissioner of Income Tax, Coimbatore-1 vide order No.ITBA/REV/F/REV5/2021-12/ 1039274713(1) dated 01.02.2022. The assessment was framed by the Assessing Officer, Non-Corporate Ward 1(1), Coimbatore for the 2 I.T.A. No.404/Chny/2023 assessment years 2017-18 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 18.12.2019. 2. The only issue in this appeal of assessee is as regards to the revision order passed by the PCIT u/s.263 of the Act revising the assessment framed by the AO u/s.143(3) of the Act and held the same as erroneous and prejudicial to the interest of Revenue for the reason that the AO has wrongly allowed the interest from savings bank account maintained with Axis Bank as deduction u/s.80P(1) of the Act. For this assessee has raised the following two grounds:- 1. The order of the learned PCIT is bad and erroneous in law. 2. The learned PCIT exceeded his powers by invoking Section 263, when the appellant filed all the details, very specifically indicating the interest receipts on Bank Savings account maintained for business operational purposes with Axis Bank called for which had been carefully considered and verified by the Assessing Officer. 3. At the outset, it is noticed that despite noting down of the fixation date by the assessee, he chose not to present on the date of hearing and hence, after hearing ld.CIT-DR, we have decided to hear the appeal ex-parte qua assessee. 4. The brief facts are that the assessee is a co-operative housing society filing its return of income for the assessment year 2017-18 3 I.T.A. No.404/Chny/2023 filed on 12.03.2018 declaring nil income after claiming exemption u/s.80P(1) of the Act. The AO framed the assessment u/s.143(3) of the Act vide order dated 18.12.2019. Subsequently, the PCIT perusing the records noticed that the assessee has earned interest from idle funds available with it by depositing the same with Axis Bank and thereby earned interest income of Rs.11,25,431/- which was claimed as deduction u/s.80P(2)(1) of the Act and erroneously allowed by the AO. According to PCIT, the AO is erroneous so far as prejudicial to the interest of Revenue. Hence, he set aside the assessment and directed the AO to re-do the assessment after allowing opportunity of hearing to the assessee by observing in para 7 as under:- “7. The Assessing Officer, is hereby, directed to re-do the assessment afresh after verification of the facts discussed above. The AO may satisfy himself in accordance with law and the Hon’ble Apex Court’s judgment cited supra and come to a logical conclusion in respect of the issue of claim of deductions u/s 80P of the Act and then, he shall proceed with the assessment and pass appropriate orders in the assessee’s case. The Assessing Officer shall give adequate opportunity of being heard to the assessee in this regard before passing the fresh assessment order.” Aggrieved, assessee is in appeal before the Tribunal. 5. We have heard rival contentions and gone through facts and circumstances of the case. Admittedly, the assessee has earned interest income from savings bank account maintained with Axis 4 I.T.A. No.404/Chny/2023 Bank i.e., a scheduled bank and not a co-operative bank, amounting to Rs.11,25,431/-. Admittedly, the assessee has earned interest income with deposits made with Axis Bank i.e., Savings bank account. Whether the assessee is eligible for claim of deduction u/s.80P(1) of the Act in term of section 80P(4) of the Act or not, is not examined by the AO. Hence, the PCIT has rightly set aside the assessment framed by AO and directed the AO to re-decide the issue afresh. Needless to say, the AO will not be influenced by any of our observations whether the assessee is eligible for deduction or not, he will independently examine this aspect after allowing reasonable opportunity of being heard to the assessee. 6. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open court on 19 th July, 2023 at Chennai. Sd/- Sd/- (मनोज कुमार अᮕवाल) (MANOJ KUMAR AGGARWAL) लेखा सद᭭य/ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 19 th July, 2023 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ /CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF.