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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI B.R. BASKARAN & SHRI RAHUL CHAUDHARY
PER B.R. BASKARAN, ACCOUNTANT MEMBER :
The assessee has filed this appeal challenging the revision order dated 23.03.2023 passed by the learned Principal Commissioner of Income Tax-17, Mumbai (in short ‘ld. PCIT’) and it relates to Assessment Year 2018-19. The assessee is challenging the validity of the order passed by the ld. PCIT under Section 263 of the Income Tax Act, 1961 (in short ‘the Act’).
We heard the parties and perused the record. The assessment in the hands of the assessee was completed by the Assessing Officer under Section 143(3) of the Act on 20.01.2021. On examination of the assessment record,
Vile Parle Prarthana CHSL the ld. PCIT noticed that the assessee has earned interest income of Rs.30,36,310/- from deposits kept with co-operative bank and claimed the same as deduction under Section 80P(2)(d) of the Act. The ld. PCIT noticed that the provisions of Section 80P(4) of the Act specifically state that the provisions of Section 80P of the Act will not apply to co-operative banks. Hence, the ld. PCIT took the view that the deduction under Section 80P(2)(d) of the Act claimed in respect of the interest income earned from deposits kept with co-operative bank is not correct and hence the assessment order is rendered erroneous and prejudicial to the interest of the Revenue. Accordingly, the ld. PCIT set-aside the assessment order and directed the Assessing Officer to do assessment de novo. Aggrieved, assessee has filed this appeal before the Tribunal.
The ld. AR placed reliance on the decision rendered by the co-ordinate bench in the case of M/s. Varma Chambers Premises Co-operative Society Limited vs. ITO (ITA No. 6030/Mum/2018) dated 16.03.2020 wherein the Tribunal has held that a co-operative society is entitled for deduction under Section 80P(2)(d) of the Act in respect of interest income earned from deposit kept with co-operative bank. The ld. AR submitted that the Tribunal, in the above said case, has referred to a plethora of decisions rendered by other co-ordinate benches in this regard. Accordingly, the ld. AR submitted that the view taken by the Assessing Officer in allowing deduction under Section 80P(2)(d) of the Act is a possible view and hence the impugned assessment order cannot be considered as erroneous and prejudicial to the interest of the Revenue. Accordingly, he contended that the impugned revision order passed by the ld. PCIT is liable to be quashed.
Vile Parle Prarthana CHSL 4. The ld. DR, on the contrary, supported the order passed by the ld. PCIT.
Having heard the rival contentions, we find that there is merit in the submissions made by the ld. AR. It is a well-settled proposition of law, which has been expounded by the Hon’ble Supreme Court of India in the case of Malabar Industrial Co. Ltd. vs CIT, 243 ITR 83 (SC) that the order cannot be termed as erroneous and prejudicial to the interest of Revenue if the Assessing Officer has taken a possible view of the matter. We noticed that the view taken by the Assessing Officer in allowing deduction under Section 80P(2)(d) of the Act in respect of interest income earned by the assessee from deposit kept with co-operative bank is supported by the various decisions of the Tribunal rendered on the issue. Hence, the view taken by Assessing Officer is a possible view. Accordingly, we agree with the contentions of the assessee that the assessment order cannot be termed as erroneous and prejudicial to the interest of the Revenue on the aforesaid reasoning. Accordingly, we are of the view that the revision order passed by the ld. PCIT is not sustainable in law. Accordingly, we quash the same.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 21st June, 2023.