Dr Dada Gujar Nagri Sahakari Patsanstha Ltd, Pune V. Principal Commissioner of Income-Tax -4, Pune

ITA 862/PUN/2022

AI Insights

The case involves Dr. Dada Gujar Nagri Sahakari Patsanstha Ltd., which appealed against the order of the Pr. CIT, Pune-4, which had declared the assessment order as erroneous and prejudicial to the interest of the revenue concerning the deduction claimed under section 80P(2)(d) of the Income-tax Act, 1961. The Tribunal examined whether the Pr. CIT was justified in invoking section 263, given that the Assessing Officer had conducted an inquiry and allowed the deduction based on the prevailing law and judicial precedents. The Tribunal referenced several precedents and rulings, particularly noting the lack of a direct judgment from the jurisdictional High Court on the specific point of contention, and upheld the decision of the Assessing Officer.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124373 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 30-11-2022
• Other Referred Cases: Sureshdada Jain Nagari Sahakari Patsanstha Maryadit Vs. The Pr. CIT, Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit Vs. ITO, Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO, Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT, The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order
• Section: 263; 80P; 2(19)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, PUNE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA No. 862/PUN/2022 : A.Y. 2017-18 Dr. Dada Gujar Nagri Sahakai Patsanstha Ltd., 01/02 Amar Palace, Pune Solapur Highway, Hadapsar Pune.- 411 028 PAN: AAAAD0295P Appellant Vs. The Pr. C.I.T. Pune-4. Respondent Appellant by : Smt. Deepa Khare Respondent by : Shri Mirtyunjoy Barnwal Date of Hearing :15-02-2023 Date of Pronouncement : 16-2-2023 ORDER PER SHRI PARTHA SARATHI CHAUDHURY, J.M. This appeal preferred by the assessee emanates from order of ld. Pr. C.I.T. Pune-4, dated 29-03-2022 for A.Y. 2017-18 as per the following grounds of appeal. “1. The ld. PCIT erred on facts and in law in failing to consider that the assessment order was passed by the ld. A.O after having conducted an inquiry on the deduction claimed under chapter VIA i.e. deduction u/s 80P(2)(d). 2. The ld. PCIT erred on facts and in law in failing to consider the ld. AO had adopted a plausible course of action with reference to the prevailing law regarding deduction under chapter VIA vis-à-vis the precedents set by the Supreme Court and High courts. 3. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds at the time of hearing of appeal.” 2. In this case, the assessment order was completed by the ld. A.O after having conducted inquiry on the deduction claimed under Chapter VIA i.e. deduction u/s 80P(2)(d) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”). The assessee is aggrieved with the decision of the ld. Pr. CIT 2 ITA No.862 of 2022 Dr. Dada Gujar Nagri Sahakari Patsanstha Ltd. A.Y. 2017-18 passing order u/s 263 of the Act holding the order erroneous and prejudicial to the interest of revenue on the said issue. 3. At the outset, we observe that the appeal is time-barred by 188 days. In this regard, the assessee has filed an Affidavit and condonation petition explaining the reasons for the delay. We have gone through the contents of the Affidavit and the condonation of delay petition and as per our considered view, the reasons of delay cannot be attributable to the deliberate or malafide conduct, if any, of the assessee. The delay caused is due to the circumstances and is not intentional on the part of the assessee. Therefore, even the ld. D.R raised strong objection regarding condonation of this delay, however, as per the aforestated reasons, we condone the delay of 188 days and the case is heard on merits. 4. The Pune Bench of the Tribunal in a group matters in ITA No. 303 to 398/PUN/2022 for A.Y. 2017-18, order dated 20-12-2022, where the assessee filed return claiming deduction u/s 80P in respect of interest income which was allowed by the A.O., the ld. Pr. CIT invoked jurisdiction u/s 263 of the Act and disputed allowability of claim of deduction u/s 80P(2)(a)(i) in some cases and u/s 80P(2)(d) of the Act. The facts and circumstances in these matters are pari materia with the facts and circumstances of the case before us. In the aforestated cases (supra), the Tribunal held as follows: 4. We have heard the rival submissions and gone through the relevant material on record. Insofar as the allowability of deduction u/s.8P(2)(a)(i) is concerned, we find that the Pune Benches of the Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit Vs. The Pr. CIT (ITA No.713/PUN/2016) decided the question of availability of deduction u/s 80P on interest income by noticing that the Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit Vs. ITO (ITA No.604/PN/2014) has allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed by the Hon’ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 Taxman 309 (Kar.) allowing deduction u/s. 80P on interest income and that of the Hon’ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT (2014) 110 DTR 89 (Delhi) not allowing deduction u/s.80P on interest income earned from banks. Both the Hon’ble High Courts took into consideration the ratio laid down in the case of 3 ITA No.862 of 2022 Dr. Dada Gujar Nagri Sahakari Patsanstha Ltd. A.Y. 2017-18 Totgar’s Cooperative Sale Society Ltd. (supra). No direct judgment from the Hon’ble jurisdictional High Court on the point having been pointed out, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). The position continues to remain the same before this Tribunal also. 5. Reliance of the ld. Pr. CIT in some of the cases under consideration on the decision of Pr. CIT and Another Vs. Totagars Cooperative Sales Society (2017) 395 ITR 611 (Kar.) is not relevant. The issue in that case was the eligibility of deduction u/s.80P(2)(d) of the Act on interest earned by the assessee cooperative society on investments made in co-operative banks. In that case, the assessee was engaged in the activity of marketing agricultural produce by its members; accepting deposits from its members and providing credit facility to its members; running stores, rice mills, live stocks, van section, medical shops, lodging, plying and hiring of goods and carriage etc. It was in that background of the facts that the Hon’ble High Court held that the assessee could not claim deduction u/s.80P(2)(d) of the Act. When we consider the effect of this decision, it turns out that the same is not germane to case under consideration in view of the position that the primary claim of the extant assessee is directly about the eligibility of deduction u/s.80P(2)(a)(i) of the Act. 6. Coming to the cases of eligibility of deduction u/s.80P(2)(d), the respective assessees are Cooperative credit societies engaged in providing credit facilities to its members. The ld. PCIT has held the assessment order to be erroneous and prejudicial to the interest of the Revenue only on the ground that the claim of deduction u/s.80P on interest income was not in order. In this regard, it is observed that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a cooperative society on interest income on investments/deposits parked with a co- operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessees are also Co-operative society registered. 7. Similar view has been taken by the Pune Benches of the Tribunal in several cases including The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT (ITA No.203/PUN/2019, order dated 16-11-2022). 8. In view of the fact that the Pune Benches of the Tribunal in series of decisions have held that the assessees are entitled to deduction u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income, we hold that the impugned orders cannot be sustained. All the orders are, therefore, overturned. 9. In the result, all the appeals are allowed.” 5. Resultantly on the same parity of reasoning, the present appeal of the assessee is allowed. 6. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 16 th day of February 2023. Sd/- SD/- (R.S. SYAL) (PARTHA SARATHI CHAUDHURY) VICE PRESIDENT JUDICIAL MEMBER Pune; Dated, the 16 th day of February 2023 Ankam 4 ITA No.862 of 2022 Dr. Dada Gujar Nagri Sahakari Patsanstha Ltd. A.Y. 2017-18 Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. D.R. ITAT „A‟ Bench 4. Guard File BY ORDER, Sr. Private Secretary ITAT, Pune. /// TRUE COPY /// 5 ITA No.862 of 2022 Dr. Dada Gujar Nagri Sahakari Patsanstha Ltd. A.Y. 2017-18 1 Draft dictated on 15-02-2023 Sr.PS 2 Draft placed before author 15-02-2023 Sr.PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS 6 Kept for pronouncement on 16-2-2023 Sr.PS 7 Date of uploading of order 16-2-2023 Sr.PS 8 File sent to Bench Clerk 16-2-2023 Sr.PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order