OBEROI SKY HEIGHTS CO OPERATIVE HOUSING SOCIETY LIMITED ,MUMBAI V. PRINCIPAL COMMISSIONER OF INCOME TAX , MUMBAI

ITA 2372/MUM/2025

AI Insights

The case involves Oberoi Sky Heights Co-operative Housing Society Ltd., which appealed against the order of the PCIT, Mumbai - 20, challenging the invocation of jurisdiction under section 263 of the Income Tax Act, 1961. The PCIT had revised the assessment order for the assessment year 2021-22, claiming that the AO had not conducted proper inquiries before allowing a deduction under section 80P(2)(d). The Tribunal examined the notices and responses exchanged during the assessment proceedings and concluded that the AO had indeed made detailed inquiries and passed the assessment order based on a reasonable interpretation of the law. The Tribunal's decision was influenced by several precedents where it was held that if the AO has taken a possible view after due inquiries, the PCIT cannot revise the order merely because he has a different view.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714538 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2021-2022
• Other Referred Cases: Ramjharukha Co-op housing Society Ltd. Vs. PCIT, Principal Commissioner of Income-tax, Panaji VS Ramchandra Naidu, Grasim Industries Ltd. Vs Commissioner of Income-tax, Central-I, Kutch District Co-op. Milk Producers' Union Ltd. vs Principal Commissioner of Income-tax, Jagadhri Co-operative Marketing Cum Processing Society Ltd. vs Principal Commissioner of Income-tax, Bardoli Vibhag Gram Vikas Co.Op. Credit Society Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.A DHYANI
• Assessee Lawyers: DHARAN GANDHI
• Keywords: Set aside; Revision of order
• Section: 143(3); 142(1); 263

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No. 2372/Mum/2025 (Assessment Year: 2021-22) Oberoi Sky Heights Co- operative Housing Society Ltd Cts. No. 1/38/2 Oberoi Sky Heights, Lokhandwala Complex, Andheri (W) Mumbai. Vs. Pr. CIT Mumbai – 20 PAN/GIR No. AAAAO2095C (Applicant) (Respondent) Assessee by Shri Dharan Gandhi Revenue by Mr. R.A Dhyani, CIT DR Date of Hearing 02.07.2025 Date of Pronouncement 04.08.2025 आदेश / ORDER PER SANDEEP GOSAIN, JM: The present appeal has been filed by the assessee challenging the impugned order dt. 24.03.2025 passed u/s 263 of the Income Tax Act, 1961 (‘the Act’), by the PCIT, Mumbai - 20 for the assessment year 2021-22. 2. All the grounds raised by the assessee are interrelated and interconnected and relates to challenging the order of Printed from counselvise.com 2 ITA No.2372/Mum/2025 Oberoi Sky Heights Co-op Housing Society Ltd., Mumbai. Ld. PCIT in invoking the jurisdiction u/s 263 of the Act thereby passing order dated 24.03.20225. Therefore, we have decided to adjudicate all the grounds through the present consolidated order. 3. In this regard we have heard the counsels for both the parties, perused the material placed on record, judgemnets cited before us and also the orders passed by the revenue authorities. 4. From the record, we noticed that Ld. PCIT concluded that AO did not conducted proper enquiries and had passed an order of assessment u/s 143(3) of the Act, thereby allowing the deduction u/s 80P(2)(d) of the Act without any verifications. 5. Whereas on the contrary, Ld. AR has placed on record notices issued by AO during the course of assessment u/s 142(1) of the Act dt. 07.10.2022, wherein the following informations were called for by the AO. 2. Detailed computation of total income. 3. Calculation of amount of deduction and note on eligibility of deduction u/s 80P of the Act. 4. Please give details whether the entity falls under the category of Co-operative Bank /society or was constituted under Part V of the Banking Regulation Act 1949. 5. Detailed note on objectives of the entity Printed from counselvise.com 3 ITA No.2372/Mum/2025 Oberoi Sky Heights Co-op Housing Society Ltd., Mumbai. 8. Justification how the interest income earned from a banking company is eligible for deduction u/s 80P of the Act. 6. In respect to the above notice, assessee vide letter dt. 04.11.2022 placed on record the detailed break-up interest received and also the justification as to why the assessee is eligible for deduction u/s 80P(2)(d) of the Act. In this way it is submitted by Ld. AR that the detailed enquiries were carried out by assessee and only thereafter order of assessment was passed, the assessee also relied upon the decision of the Coordinate Bench in the case of Ramjharukha Co-op housing Society Ltd., Vs. PCIT dated 19.06.2025. 7. Be that as it may, after taking into consideration the entire facts and circumstances of the present case and also after having heard the arguments of both the parties at length, we noticed that the AO during the course of assessment had made detailed enquires on the allowability of deduction u/s 80P(2)(d) of the Act and thereafter passed assessment order. Thus in our view the AO had taken a reasonable and possible view which cannot be termed as “erroneous”. From the entire order of Ld. PCIT, we found that the proceedings u/s 263 of the Act were initiated only on the ground that AO had not conducted any enquiries and admitted claim of deduction u/s 80P(2)(d) of the Act. Thus while relying upon the decision of the Coordinate Printed from counselvise.com 4 ITA No.2372/Mum/2025 Oberoi Sky Heights Co-op Housing Society Ltd., Mumbai. Bench in the case of Ramjharukha Co-op Housing Society Ltd., (supra) and also keeping in view the decisions in the following cases: 1. [2017] 85 taxmann.com 127 (Bombay) Principal Commissioner of Income-tax, Panaji VS Ramchandra Naidu wherein it was held that 'when physical verification of stocks was carried out during regular assessment, revision to value stock on basis of last year G.P. of 10 per cent as against books which were accepted by Assessing officer could not be accepted'. 2. [2010] 188 Taxman 327 (Bombay) Grasim Industries Ltd. Vs Commissioner of Income-tax, Central-I wherein it was held that \"when judgment of High Court was delivered in early part of accounting year relevant to assessment year, liabilities, which ceased as a result of judgment, ought to have been written back in assessment year - Whether, on facts, Assessing Officer had taken a possible view and, therefore, Commissioner was not justified in exercising power under section 263\". 3. [2024] 159 taxmann.com 347 (Rajkot - Trib.) Kutch District Co-op. Milk Producers' Union Ltd. vs Principal Commissioner of Income-tax wherein it was held that where Assessing Officer had made due enquiries during course of assessment proceedings, with respect to details of interest received from cooperative banks by assessee on which deduction under section 80P was claimed and had taken a view, which was a legally possible view, Principal Commissioner could not have resorted to section 263 proceedings only to supplant his own view with view taken by Assessing Officer.\" Printed from counselvise.com 5 ITA No.2372/Mum/2025 Oberoi Sky Heights Co-op Housing Society Ltd., Mumbai. 4. [2024] 159 taxmann.com 1253 (Chandigarh Trib.) Jagadhri Co-operative Marketing Cum Processing Society Ltd. vs Principal Commissioner of Income-tax wherein it was held that \"Where assessee a co-operative society claimed deduction undersection 80P(2)(d) on interest income earned from deposits placed with a co-operative bank and Assessing Officer after due examination of facts allowed said claim, Principal Commissioner was not justified in invoking revisionary jurisdiction merely on ground that interest income was not earned from any other co- operative society but from scheduled commercial banks. 5. [2021] 127 taxmann.com 334 (Surat-Trib.) Bardoli Vibhag Gram Vikas Co.Op. Credit Society Ltd. wherein it was held that Where Assessing Officer had made enquiries on allowability of deduction under section 80P(2)(d) and passed assessment order in respect of gross interest received from co- operative bank and thus, had taken a reasonable and possible view which cannot be held as erroneous, Commissioner was not justified in revising said order. And after having gone through the facts of the case we are of the view that the AO made due enquiries on the allowability of the deduction u/s 80P(2)(d) of the Act and had passed assessment order in respect of gross interest received and thus had taken a reasonable and possible view which cannot be held as “erroneous”. Therefore the order of Ld. PCIT was not justified in revising the said order. Consequently, impugned order passed by the Ld. PCIT is set aside and quashed. Accordingly the grounds raised by the assessee are allowed. Printed from counselvise.com 6 ITA No.2372/Mum/2025 Oberoi Sky Heights Co-op Housing Society Ltd., Mumbai. 8. In the result, the appeal filed by the assessee stands allowed without any order as to cost. Order pronounced in the open court on 04.08.2025 Sd/- Sd/- (PRABHASH SHANKAR) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 04/08/2025 KRK, PS आदेश की \bितिलिप अ\u000eेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. \u000eथ / The Respondent. 3. संबंिधत आयकर आयु\u0019 / The CIT(A) 4. आयकर आयु\u0019(अपील) / Concerned CIT 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण,मु\u0003बई/ DR, ITAT, Mumbai 6. गाड फाईल / Guard file. आदेशानुसार/BY ORDER, स\u000eािपत ित //True Copy// 1. उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु\u0003बई मु\u0003बई मु\u0003बई मु\u0003बई / ITAT, Mumbai Printed from counselvise.com "