ITO-26(2)(1) , MUMBAI vs. SAI PRERANA CO-OP CREDIT SOCIETY LTD, MUMBAI

PER BENCH

These appeals by the assessee and the Revenue are directed These appeals by the assessee and the Revenue are directed These appeals by the assessee and the Revenue are directed against separate orders passed by the Ld. First against separate orders passed by the Ld. First Appellate Authority Appellate Authority i.e. the Commissioner of Income i.e. the Commissioner of Income-tax (appeals) -National Faceless National Faceless Appeal Centre, Delhi [ in short the ld CIT(A)] , Appeal Centre, Delhi [ in short the ld CIT(A)] , for assessment years for assessment years from AY 2013-14 to AY 2020 14 to AY 2020-21 except AY 2014-15 15 , 2015-16 and 2019-20. These appeals being connecte These appeals being connected with same same assessee and involving common issue, same involving common issue, same were heard together and disposed off were heard together and disposed off by way of this consolidated order for convenience and avoid by way of this consolidated order for convenience and avoid by way of this consolidated order for convenience and avoid repetition of facts.

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 3 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 4 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

vs. Totgars Cooperative Society limited 83 taxmann.com 140 vs. Totgars Cooperative Society limited 83 taxmann.com 140 vs. Totgars Cooperative Society limited 83 taxmann.com 140 (2017) dated 16/06/2017 (2017) dated 16/06/2017, a SLP filed against which has been , a SLP filed against which has been rejected by the Hon’ble Supreme Court. rejected by the Hon’ble Supreme Court.

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 5 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

completion of assessment. In the case assessment. In the case, in the regular regular assessment year completed u/s 143(3) of the Act, the assessee was allowed year completed u/s 143(3) of the Act, the assessee was allowed 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 deduction u/s 80P of the Act in respect of interest income earned deduction u/s 80P of the Act in respect of interest income earned from the nationalized as well as c from the nationalized as well as co-operative bank. T . The Assessing Officer has reopened the assessment based on the same material Officer has reopened the assessment based on the same material Officer has reopened the assessment based on the same material which was available which was available before the Assessing Officer during original the Assessing Officer during original assessment proceedings, which proceedings, which is evident from the reasons is evident from the reasons recorded by the Assessing recorded by the Assessing Officer ( i.e. reproduced by the Assessing reproduced by the Assessing Officer on page 1 of the assessment order Officer on page 1 of the assessment order). For ready reference For ready reference same is reproduced as under: same is reproduced as under:

"The assessee, Sai Prerna Co "The assessee, Sai Prerna Co-op. Credit Society Ltd., is op. Credit Society Ltd., is assessed to tax in this charge. Assessee e filed its return of assessed to tax in this charge. Assessee e filed its return of assessed to tax in this charge. Assessee e filed its return of income for AY 2013 r AY 2013-14 on 08.09.2012 showing income of Rs. 08.09.2012 showing income of Rs. Nil.The case was duly concluded vide order us 143(3) dated .The case was duly concluded vide order us 143(3) dated .The case was duly concluded vide order us 143(3) dated 07.03.2016 at Rs NIL/ 07.03.2016 at Rs NIL/-. Assessee is a co operative credit . Assessee is a co operative credit society. 2. Subsequently, in this case, it is found that assessee has 2. Subsequently, in this case, it is found that assessee has 2. Subsequently, in this case, it is found that assessee has claimed deduction un claimed deduction under section 80P(2) of the Act of R$ der section 80P(2) of the Act of R$ 97,49,7071- and the same was also allowed in the order. and the same was also allowed in the order. 3. As per the records from Profit & Loss Alc, it was noticed 3. As per the records from Profit & Loss Alc, it was noticed 3. As per the records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 163,45,298/ that assessee received interest on FD of Rs 163,45,298/ that assessee received interest on FD of Rs 163,45,298/-. The FD's as seen from the Balance sheet were FD's as seen from the Balance sheet were mainty with co mainty with co operative banks and not with co operative society. This clearly operative banks and not with co operative society. This clearly operative banks and not with co operative society. This clearly showed that assessee has earned income from co operative showed that assessee has earned income from co operative showed that assessee has earned income from co operative banks and not from society. Section 80P(2)(d) does not extend banks and not from society. Section 80P(2)(d) does not extend banks and not from society. Section 80P(2)(d) does not extend the benefit of deduction for interest received from invest the benefit of deduction for interest received from invest the benefit of deduction for interest received from investments made with co operative banks, hence the deduction was made with co operative banks, hence the deduction was made with co operative banks, hence the deduction was required to be disallowed. required to be disallowed. 4. Assessee claimed deduction u/s 800(2) which is clearly in 4. Assessee claimed deduction u/s 800(2) which is clearly in 4. Assessee claimed deduction u/s 800(2) which is clearly in contravention to provisions of the Act. The income from FD contravention to provisions of the Act. The income from FD contravention to provisions of the Act. The income from FD was required to be offered under the head "income was required to be offered under the head "income was required to be offered under the head "income from other

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 6 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 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 sources" as per the provisions of the Act as, co operative bank sources" as per the provisions of the Act as, co operative bank is a urban commercial bank and does not fall under the is a urban commercial bank and does not fall under the is a urban commercial bank and does not fall under the purview of co operative society referred to section 80P(2)(d) of purview of co operative society referred to section 80P(2)(d) of purview of co operative society referred to section 80P(2)(d) of the Act. The claim of assessee for deduction clearly shows the Act. The claim of assessee for deduction clearly shows the Act. The claim of assessee for deduction clearly shows that there is failure on part of assessee in making true and full hat there is failure on part of assessee in making true and full hat there is failure on part of assessee in making true and full disclosure of its particulars of income for AY 2012 disclosure of its particulars of income for AY 2012- -13. 5. Section 147 of the Act states that If AO has reason to 5. Section 147 of the Act states that If AO has reason to 5. Section 147 of the Act states that If AO has reason to believe that any income chargeable to tax has escaped believe that any income chargeable to tax has escaped believe that any income chargeable to tax has escaped assessment for any asse assessment for any assessment year, he may subject to ssment year, he may subject to provisions of section 148 to 153, assessee or reassess such provisions of section 148 to 153, assessee or reassess such provisions of section 148 to 153, assessee or reassess such income and also any other income which has escaped income and also any other income which has escaped income and also any other income which has escaped assessment and which comes to his notice subsequently in assessment and which comes to his notice subsequently in assessment and which comes to his notice subsequently in the course of proceedings under this section." the course of proceedings under this section." 6.1 On perusal of the above reasons usal of the above reasons recorded, it is recorded, it is evident that there is no tangible new information there is no tangible new information or material or material from either ‘internal’ or ‘external’ ’ source to form reasons to believe that income source to form reasons to believe that income escaped assessment escaped assessment. The Assessing Officer has merely re has merely re- appreciated the information which was available before him in he information which was available before him in he information which was available before him in original assessment proceedings and therefore, the reasons original assessment proceedings and therefore, the reasons original assessment proceedings and therefore, the reasons recorded are based on merely on merely ‘change of opinion’. In para 4 of the . In para 4 of the reasons recorded though the Assessing Officer reasons recorded though the Assessing Officer mentioned that there mentioned that there was a failure on the part of the assessee in making true and fully on the part of the assessee in making true and fully on the part of the assessee in making true and fully disclosure, however, he has not pointed out which information was owever, he has not pointed out which information was owever, he has not pointed out which information was not disclosed fully and truly and truly by the assessee. The interest income by the assessee. The interest income earned by the assessee from fixed deposits was duly explained earned by the assessee from fixed deposits was duly explained earned by the assessee from fixed deposits was duly explained before the Assessing Officer he Assessing Officer in original assessment proceedings in original assessment proceedings and therefore, contention of the Assessing Officer therefore, contention of the Assessing Officer in reason recorded in reason recorded of failure on the part of the assessee in making full and true failure on the part of the assessee in making failure on the part of the assessee in making disclosure,is devoid of merit and devoid of merit and in the nature of an in the nature of an incorrect

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 7 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

allegation only. Relying on the decision of the Hon’ble Jurisdictional allegation only. Relying on the decision of the Hon’ble Jurisdictional allegation only. Relying on the decision of the Hon’ble Jurisdictional High Court in the case of High Court in the case of Sunjewels India (P.) Ltd. reported in Sunjewels India (P.) Ltd. reported in [2022] 141 taxmann.com 72 (Bombay) [2022] 141 taxmann.com 72 (Bombay)reassessments reassessments based on appreciating same facts appreciating same facts, which were available during original which were available during original assessment proceedings sessment proceedings,is bad in law on the reason of bad in law on the reason of ‘change of opinion’. In writ petition no. 3048 of 202 In writ petition no. 3048 of 2022 in the case of 2 in the case of Mumbai Postal Employees Co Postal Employees Co-operative Credit Society Ltd Vs ITO ative Credit Society Ltd Vs ITO, the Hon’ble Bombay High Court Hon’ble Bombay High Court held that satisfaction recorded by the that satisfaction recorded by the AO in the reasons recorded was not based upon any material other O in the reasons recorded was not based upon any material other 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 than obtained on amount of ‘perusal of the record’, and hence it was 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 . The relevant finding of the Hon’ble High based on change of opinion Court is reproduced as under: Court is reproduced as under:

“8. We have heard learne 8. We have heard learned Counsel for the parties. d Counsel for the parties. 9. It is no longer res integra that the action of the A.O. 9. It is no longer res integra that the action of the A.O. 9. It is no longer res integra that the action of the A.O. ininitiating reassessment proceedings have to be tested on the ininitiating reassessment proceedings have to be tested on the ininitiating reassessment proceedings have to be tested on the touch stone of the reasons recorded. On a perusal of the touch stone of the reasons recorded. On a perusal of the touch stone of the reasons recorded. On a perusal of the reasons recorded as have been reproduced partially in the reasons recorded as have been reproduced partially in the reasons recorded as have been reproduced partially in the preceding paragraph preceding paragraphs, it is clear that the A.O. felt that the s, it is clear that the A.O. felt that the claim of deduction under Section 80P(2)(d) of the Act which claim of deduction under Section 80P(2)(d) of the Act which claim of deduction under Section 80P(2)(d) of the Act which had been allowed in favour of the Petitioner was not in had been allowed in favour of the Petitioner was not in had been allowed in favour of the Petitioner was not in conformity with the provisions of the said section, which conformity with the provisions of the said section, which conformity with the provisions of the said section, which consequently had resulted in an under a consequently had resulted in an under assessment of income ssessment of income of Rs.92,08,876/ of Rs.92,08,876/- and a consequent short levy of tax of and a consequent short levy of tax of Rs.28,45,542/ Rs.28,45,542/-. This satisfaction recorded by the A.O. in the . This satisfaction recorded by the A.O. in the reasons was not based upon any material other than obtained reasons was not based upon any material other than obtained reasons was not based upon any material other than obtained on account of ‘perusal of the record’. on account of ‘perusal of the record’. 10. It can be noti 10. It can be noticed that in the present case the assessment ced that in the present case the assessment was under Section 143(3) of the Act, during which the was under Section 143(3) of the Act, during which the was under Section 143(3) of the Act, during which the Petitioner had been served with the notice under Section Petitioner had been served with the notice under Section Petitioner had been served with the notice under Section 142(1) of the Act dated 27th September, 2016 asking the 142(1) of the Act dated 27th September, 2016 asking the 142(1) of the Act dated 27th September, 2016 asking the Petitioner to explain with documentary eviden Petitioner to explain with documentary evidence the claim of ce the claim of

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 8 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

deduction under Chapter VI deduction under Chapter VI-A of the Act, reply thereto was A of the Act, reply thereto was submitted by the Petitioner on 10th October, 2016 with an submitted by the Petitioner on 10th October, 2016 with an submitted by the Petitioner on 10th October, 2016 with an explanation that the Petitioner get fulflled the conditions of explanation that the Petitioner get fulflled the conditions of explanation that the Petitioner get fulflled the conditions of eligibility under Section 80P of the Act, whereafter the ord eligibility under Section 80P of the Act, whereafter the ord eligibility under Section 80P of the Act, whereafter the order of assessment came to be passed on 23rd November, 2016. It is assessment came to be passed on 23rd November, 2016. It is assessment came to be passed on 23rd November, 2016. It is therefore clear that the issue stood considered as only a part therefore clear that the issue stood considered as only a part therefore clear that the issue stood considered as only a part ofthe deduction under Section 80P of the Act while disallowing the deduction under Section 80P of the Act while disallowing the deduction under Section 80P of the Act while disallowing the same in regard to income from holiday home charges. the same in regard to income from holiday home charges. the same in regard to income from holiday home charges. 11. The A.O. therefore did not have any tangible material with A.O. therefore did not have any tangible material with A.O. therefore did not have any tangible material with him based upon which he could form his reason to believe that him based upon which he could form his reason to believe that him based upon which he could form his reason to believe that income had escaped assessment. The entire basis for income had escaped assessment. The entire basis for income had escaped assessment. The entire basis for reopening is nothing but a change of opinion on the part of the reopening is nothing but a change of opinion on the part of the reopening is nothing but a change of opinion on the part of the A.O. that the beneft of A.O. that the beneft of deduction under Section 80P of the Act deduction under Section 80P of the Act of Rs.92,08,876/ of Rs.92,08,876/- ought not to have been allowed at all. As ought not to have been allowed at all. As between the date of the assessment order under Section between the date of the assessment order under Section between the date of the assessment order under Section 143(3) of the Act and the date when the reasons were 143(3) of the Act and the date when the reasons were 143(3) of the Act and the date when the reasons were recorded, there has been neither any change in l recorded, there has been neither any change in l recorded, there has been neither any change in law nor any new material has been shown to have come to the knowledge new material has been shown to have come to the knowledge new material has been shown to have come to the knowledge of the A.O.. This therefore is nothing but a clear case of of the A.O.. This therefore is nothing but a clear case of of the A.O.. This therefore is nothing but a clear case of change of opinion as was rightly urged by Mr. Mistry and, change of opinion as was rightly urged by Mr. Mistry and, change of opinion as was rightly urged by Mr. Mistry and, therefore, impermissible for reopening the assessment. Apart therefore, impermissible for reopening the assessment. Apart therefore, impermissible for reopening the assessment. Apart from this, the assessment is sought to be reopened beyond the , the assessment is sought to be reopened beyond the , the assessment is sought to be reopened beyond the period of four years from the end of the relevant assessment period of four years from the end of the relevant assessment period of four years from the end of the relevant assessment year 2014-15 and, therefore, it was incumbent upon the A.O. 15 and, therefore, it was incumbent upon the A.O. 15 and, therefore, it was incumbent upon the A.O. to establish that the Petitioner had failed to disclose fully and to establish that the Petitioner had failed to disclose fully and to establish that the Petitioner had failed to disclose fully and truly all materi truly all material facts necessary for assessment during the al facts necessary for assessment during the relevant assessment proceedings. No such averment is made relevant assessment proceedings. No such averment is made relevant assessment proceedings. No such averment is made in the 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, Assistant Commissi Assistant Commissioner of Income-Tax and others 1 Tax and others 1, it was held: “…...The reasons recorded should be clear and unambiguous “…...The reasons recorded should be clear and unambiguous “…...The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons and should not suffer from any vagueness. The reasons and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the recorded must disclose his mind. The reasons are the recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing Offcer. The reasons manifestation of the mind of the Assessing Offcer. The reasons manifestation of the mind of the Assessing Offcer. The reasons recorded should be self recorded should be self-explanatory and should not keep the anatory and should not keep the assessee guessing for the reasons. Reasons provide the link assessee guessing for the reasons. Reasons provide the link assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must between conclusion and evidence. The reasons recorded must between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Offcer, in the event of be based on evidence. The Assessing Offcer, in the event of be based on evidence. The Assessing Offcer, in the event of challenge to the reasons, must be able to jus challenge to the reasons, must be able to justify the same tify the same

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 9 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

based on material available on record. He must disclose in the based on material available on record. He must disclose in the based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the reasons as to which fact or material was not disclosed by the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessee fully and truly necessary for assessment of that assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between assessment year, so as to establish the vital link between assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against reasons and evidence. That vital link is the safeguard against reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. arbitrary reopening of the concluded assessment. arbitrary reopening of the concluded assessment. In the aforementioned case the Court set aside the notice In the aforementioned case the Court set aside the notice In the aforementioned case the Court set aside the notice under Section 148 of the Act impugned therein, on the ground under Section 148 of the Act impugned therein, on the ground under Section 148 of the Act impugned therein, on the ground that the jurisdictio that the jurisdictional requirement of the proviso to Section nal requirement of the proviso to Section 147 of the Act had not been complied with as the A.O. had 147 of the Act had not been complied with as the A.O. had 147 of the Act had not been complied with as the A.O. had nowhere stated in the reasons recorded that there was failure nowhere stated in the reasons recorded that there was failure nowhere stated in the reasons recorded that there was failure on the part of the assessee to disclose fully and truly all on the part of the assessee to disclose fully and truly all on the part of the assessee to disclose fully and truly all material facts. Similar facts situ material facts. Similar facts situation exists even in the ation exists even in the present case where the reasons recorded do not at all alleged present case where the reasons recorded do not at all alleged present case where the reasons recorded do not at all alleged any such failure on the part of the assessee which was a any such failure on the part of the assessee which was a any such failure on the part of the assessee which was a condition prerequisite for invoking jurisdiction for reopening in condition prerequisite for invoking jurisdiction for reopening in condition prerequisite for invoking jurisdiction for reopening in addition to the condition of ‘reasons tobeliev addition to the condition of ‘reasons tobelieve’ as this was a e’ as this was a case of reopening beyond the period of four years. case of reopening beyond the period of four years. case of reopening beyond the period of four years. 13. For the reasons mentioned hereinabove, we have no 13. For the reasons mentioned hereinabove, we have no 13. For the reasons mentioned hereinabove, we have no hesitation in holding that in the facts and circumstances of the hesitation in holding that in the facts and circumstances of the hesitation in holding that in the facts and circumstances of the present present present case, case, case, the the the reopening reopening reopening of of of the the the assessment assessment assessment is is is unsustainable. Be t unsustainable. Be that as it may, the present petition is hat as it may, the present petition is allowed. The notice under Section 148 of the Act as also the allowed. The notice under Section 148 of the Act as also the allowed. The notice under Section 148 of the Act as also the order of assessment dated 30th March, 2022 passed under order of assessment dated 30th March, 2022 passed under order of assessment dated 30th March, 2022 passed under Section 147 r/w Section 144B of the Act are set aside. Section 147 r/w Section 144B of the Act are set aside. Section 147 r/w Section 144B of the Act are set aside.” 6.2 Similar finding has been given by the Ho Similar finding has been given by the Hon’ble Bombay High n’ble Bombay High Court while deciding the writpetition no. 1809 of 2022 in the writpetition no. 1809 of 2022 in the Court while deciding the case of Tahnee Heights CHS Ltd Vs ITO case of Tahnee Heights CHS Ltd Vs ITO. The relevant finding of . The relevant finding of the Hon’ble High Court is reproduced as under: the Hon’ble High Court is reproduced as under:

“8. In the present case although the A.O. has recorded in the 8. In the present case although the A.O. has recorded in the 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 sons that there was failure on the part of the assessee to sons that there was failure on the part of the assessee to disclosefully and truly material facts, it failed to identify as to disclosefully and truly material facts, it failed to identify as to disclosefully and truly material facts, it failed to identify as to what was that material fact which was not disclosed by the what was that material fact which was not disclosed by the what was that material fact which was not disclosed by the assessee which if so disclosed could have prevented the assessee which if so disclosed could have prevented the assessee which if so disclosed could have prevented the escapement of escapement of income. The alleged failure to disclose appears income. The alleged failure to disclose appears

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 10 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

to be nothing but a statement to somehow overcome the hurdle to be nothing but a statement to somehow overcome the hurdle to be nothing but a statement to somehow overcome the hurdle of reopening the assessment beyond four years. of reopening the assessment beyond four years. Apart from the above, the A.O. could have proceeded to reopen Apart from the above, the A.O. could have proceeded to reopen Apart from the above, the A.O. could have proceeded to reopen the assessment only if he had reason the assessment only if he had reason to believe that ‘income to believe that ‘income had escaped assessment’. had escaped assessment’. 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court 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 “ The Assessing Offcer has no power to review; he has the “ The Assessing Offcer has no power to review; he has the power to reassess. But reassessment has to be based on power to reassess. But reassessment has to be based on power to reassess. But reassessment has to be based on fulfllment of certain prec fulfllment of certain precondition and if the concept of “change ondition and if the concept of “change of opinion” is removed, as contended on behalf of the of opinion” is removed, as contended on behalf of the of opinion” is removed, as contended on behalf of the Department, then, in the garb of re Department, then, in the garb of re-opening the assessment, opening the assessment, review would take place. One must treat the concept of review would take place. One must treat the concept of review would take place. One must treat the concept of “change of opinion” as an in “change of opinion” as an in-built test to check abuse of power abuse of power by the Assessing Offcer. Hence, after 1 by the Assessing Offcer. Hence, after 1-4-1989, Assessing 1989, Assessing Offcer has power to reopen, provided there is “tangible Offcer has power to reopen, provided there is “tangible Offcer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of material” to come to the conclusion that there is escapement of material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with income from assessment. Reasons must have a live link with income from assessment. Reasons must have a live link with the formation of the belief.” formation of the belief.” 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of Income Tax 3 , the Court, in the light of the facts before it and Income Tax 3 , the Court, in the light of the facts before it and Income Tax 3 , the Court, in the light of the facts before it and in the background of section 147 of the Act, observed : in the background of section 147 of the Act, observed : in the background of section 147 of the Act, observed : “……………….all that the Income “……………….all that the Income-tax Offcer has said is that he has said is that he was not right in allowing deduction under Section 80I because was not right in allowing deduction under Section 80I because was not right in allowing deduction under Section 80I because he had allowed the deductions wrongly and, therefore, he he had allowed the deductions wrongly and, therefore, he he had allowed the deductions wrongly and, therefore, he was of the opinion that the income had escaped assessment. was of the opinion that the income had escaped assessment. was of the opinion that the income had escaped assessment. Though he has used the phrase "reason to believe" in his Though he has used the phrase "reason to believe" in his Though he has used the phrase "reason to believe" in his order, admittedly, between the date of the orders of order, admittedly, between the date of the orders of order, admittedly, between the date of the orders of assessment sought to be reopened and the date of forming of assessment sought to be reopened and the date of forming of assessment sought to be reopened and the date of forming of opinion by the Income opinion by the Income-tax Offcer nothing new has happened. tax Offcer nothing new has happened. There is no change of law. No new material has come on There is no change of law. No new material has come on There is no change of law. No new material has come on record. No information has be record. No information has been received. It is merely a fresh en received. It is merely a fresh application of mind by the same Assessing Offcer to the same application of mind by the same Assessing Offcer to the same application of mind by the same Assessing Offcer to the same set of facts. While passing the original orders of assessment set of facts. While passing the original orders of assessment set of facts. While passing the original orders of assessment the order dated February 28, 1994, passed by the the order dated February 28, 1994, passed by the the order dated February 28, 1994, passed by the Commissioner of Income Commissioner of Income-tax (Appeals) was before th tax (Appeals) was before the Assessing Offcer. That order stands till today. What the Assessing Offcer. That order stands till today. What the Assessing Offcer. That order stands till today. What the Assessing Offce has said about the order of the Commissioner Assessing Offce has said about the order of the Commissioner Assessing Offce has said about the order of the Commissioner

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 11 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

of Income-tax (Appeals) while recording reasons under Section tax (Appeals) while recording reasons under Section tax (Appeals) while recording reasons under Section 147 he could have said even in the original orders of 147 he could have said even in the original orders of 147 he could have said even in the original orders of assessment. Thus, it assessment. Thus, it is a case of mere change of opinion is a case of mere change of opinion which does not provide jurisdiction to the Assessing Offcer to which does not provide jurisdiction to the Assessing Offcer to which does not provide jurisdiction to the Assessing Offcer to initiate proceedings under Section 147 of the Act. initiate proceedings under Section 147 of the Act. It is also equally well settled that if a notice under Section 148 It is also equally well settled that if a notice under Section 148 It is also equally well settled that if a notice under Section 148 has been issued without the jurisdict has been issued without the jurisdictional foundation under ional foundation under Section 147 being available to the Assessing Offcer, the notice Section 147 being available to the Assessing Offcer, the notice Section 147 being available to the Assessing Offcer, the notice and the subsequent proceedings will be without jurisdiction, and the subsequent proceedings will be without jurisdiction, and the subsequent proceedings will be without jurisdiction, liable to be struck down in exercise of writ jurisdiction of this liable to be struck down in exercise of writ jurisdiction of this liable to be struck down in exercise of writ jurisdiction of this court. If "reason to believe" be available court. If "reason to believe" be available, the writ court will not , the writ court will not exercise its power of judicial review to go into the suffciency or exercise its power of judicial review to go into the suffciency or exercise its power of judicial review to go into the suffciency or adequacy of the material available. However, the present one adequacy of the material available. However, the present one adequacy of the material available. However, the present one is not a case of testing the suffciency of material available. It is not a case of testing the suffciency of material available. It is not a case of testing the suffciency of material available. It is a case of absence of material and is a case of absence of material and hence the absence of hence the absence of jurisdiction in the Assessing Offcer to initiate the proceedings jurisdiction in the Assessing Offcer to initiate the proceedings jurisdiction in the Assessing Offcer to initiate the proceedings under Section 147/148 of the Act.” under Section 147/148 of the Act.” 11. Even in the present case there appears to be no tangible 11. Even in the present case there appears to be no tangible 11. Even in the present case there appears to be no tangible material with the A.O. as can be seen from the reasons material with the A.O. as can be seen from the reasons material with the A.O. as can be seen from the reasons recorded and that recorded and that the reference was made only to the records the reference was made only to the records of the assessment. It thus appears that between the date of of the assessment. It thus appears that between the date of of the assessment. It thus appears that between the date of the order of assessment and the date of the issuance of notice, the order of assessment and the date of the issuance of notice, the order of assessment and the date of the issuance of notice, nothing new had happened. There was no new information nothing new had happened. There was no new information nothing new had happened. There was no new information received by the Assessing Offcer received by the Assessing Offcer nor was any reference made nor was any reference made to any new material on record. The A.O. was simply to any new material on record. The A.O. was simply to any new material on record. The A.O. was simply attempting to attempting toaccord a fresh consideration on the issue of accord a fresh consideration on the issue of deduction under Section 80P of the Act claimed and allowed in deduction under Section 80P of the Act claimed and allowed in deduction under Section 80P of the Act claimed and allowed in favour of the Petitioner. favour of the Petitioner. 12. We cannot forget that the o 12. We cannot forget that the order of assessment passed in rder of assessment passed in the case of the assessee was under Section 143(3) of the Act. the case of the assessee was under Section 143(3) of the Act. the case of the assessee was under Section 143(3) of the Act. The Petitioner had specifcally claimed the deduction under The Petitioner had specifcally claimed the deduction under The Petitioner had specifcally claimed the deduction under Section 80P of the Act which was not only reflected in the Section 80P of the Act which was not only reflected in the Section 80P of the Act which was not only reflected in the return of income but also gone into specifcally return of income but also gone into specifcally as can be seen as can be seen from the notice issued under Section 142(1) of the Act where from the notice issued under Section 142(1) of the Act where from the notice issued under Section 142(1) of the Act where by the details of various deductions and exemptions along by the details of various deductions and exemptions along by the details of various deductions and exemptions along with documentary evidence had been sought for by the A.O., with documentary evidence had been sought for by the A.O., with documentary evidence had been sought for by the A.O., which fnally led to the passing of the order of assessment which fnally led to the passing of the order of assessment which fnally led to the passing of the order of assessment where by while certain disallowances were made in respect to re by while certain disallowances were made in respect to re by while certain disallowances were made in respect to certain items, the claim of deduction under Section 80P was certain items, the claim of deduction under Section 80P was certain items, the claim of deduction under Section 80P was allowed. It is settled law that if a query is raised during the allowed. It is settled law that if a query is raised during the allowed. It is settled law that if a query is raised during the

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 12 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

assessment proceedings and the assessee submits a reply assessment proceedings and the assessee submits a reply assessment proceedings and the assessee submits a reply thereto, leading t thereto, leading to the passing of the order of assessment, a o the passing of the order of assessment, a reopening in the absence of any new tangible material would reopening in the absence of any new tangible material would reopening in the absence of any new tangible material would be nothing but a change of opinion, which would not furnish to be nothing but a change of opinion, which would not furnish to be nothing but a change of opinion, which would not furnish to the A.O. a basis for his ‘reasons to believe’ that income the A.O. a basis for his ‘reasons to believe’ that income the A.O. a basis for his ‘reasons to believe’ that income chargeable to tax had escaped a chargeable to tax had escaped assessment. 13. Be that as it may, we are of the opinion that the impugned 13. Be that as it may, we are of the opinion that the impugned 13. Be that as it may, we are of the opinion that the impugned notice is unsustainable on account of these jurisdictional notice is unsustainable on account of these jurisdictional notice is unsustainable on account of these jurisdictional errors committed by the A.O.. Consequently, the petition is errors committed by the A.O.. Consequently, the petition is errors committed by the A.O.. Consequently, the petition is allowed. The impugned notice dated30th March, 2021 under allowed. The impugned notice dated30th March, 2021 under allowed. The impugned notice dated30th March, 2021 under Section 148 of the Act and the impugned order dated 10th on 148 of the Act and the impugned order dated 10th on 148 of the Act and the impugned order dated 10th March, 2022 are held to be unsustainable and are accordingly March, 2022 are held to be unsustainable and are accordingly March, 2022 are held to be unsustainable and are accordingly quashed.” In the case of Surat District Co-op Milk Producers Union op Milk Producers Union 6.3 In the case of Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat), Hon’ble high Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat) Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat) Court of Gujrat held that ujrat held that when the assessee had given full details of when the assessee had given full details of dividend income, interest interest income, essential requirement to reopen essential requirement to reopen assessment after four years was not satisfied assessment after four years was not satisfied. The relevant finding . The relevant finding of the Hon’ble High Court id reproduced asunder: of the Hon’ble High Court id reproduced asunder:

“12. Having thus heard learned counsel for the parties and Having thus heard learned counsel for the parties and Having thus heard learned counsel for the parties and having perused the materials on record, we notice that in the having perused the materials on record, we notice that in the having perused the materials on record, we notice that in the return filed by the petitioner, in addition to claiming deduction return filed by the petitioner, in addition to claiming deduction return filed by the petitioner, in addition to claiming deduction of gross income of interest and dividend of Rs.1,81,27,606 of gross income of interest and dividend of Rs.1,81,27,606 of gross income of interest and dividend of Rs.1,81,27,606 under Section 8 under Section 80P(2)(d) of the Act, the petitioner further 0P(2)(d) of the Act, the petitioner further provided various details. For example, in the Annexure provided various details. For example, in the Annexure provided various details. For example, in the Annexure-VII to the return, such deduction under Section 80P(2)(d) was the return, such deduction under Section 80P(2)(d) was the return, such deduction under Section 80P(2)(d) was bifurcated into dividend income of Rs.53,71,450 and interest bifurcated into dividend income of Rs.53,71,450 and interest bifurcated into dividend income of Rs.53,71,450 and interest income of Rs.1,27,56,156. Further, income of Rs.1,27,56,156. Further, the petitioner had also the petitioner had also supplied the full details of the statement showing dividend supplied the full details of the statement showing dividend supplied the full details of the statement showing dividend and interest income received from cooperative societies along and interest income received from cooperative societies along and interest income received from cooperative societies along with dividend counters in the original. Additionally, along with with dividend counters in the original. Additionally, along with with dividend counters in the original. Additionally, along with Tax Audit Report under Section 44AB of the A Tax Audit Report under Section 44AB of the Act the petitioner ct the petitioner had given details of the dividend income, interest income as had given details of the dividend income, interest income as had given details of the dividend income, interest income as well as interest expenses for the said year, which included well as interest expenses for the said year, which included well as interest expenses for the said year, which included

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 13 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

interest expenditure on fixed deposit, interest expenditure on interest expenditure on fixed deposit, interest expenditure on interest expenditure on fixed deposit, interest expenditure on the Society Savings, Employee Savings, etc. the Society Savings, Employee Savings, etc. 13. Thus, it can be seen that full details with respect to it can be seen that full details with respect to petitioner's claim for deduction under Section 80P(2)(d) of the petitioner's claim for deduction under Section 80P(2)(d) of the petitioner's claim for deduction under Section 80P(2)(d) of the Act was very much before the Assessing Officer in the original Act was very much before the Assessing Officer in the original Act was very much before the Assessing Officer in the original return accompanied by the audited accounts of the petitioner return accompanied by the audited accounts of the petitioner return accompanied by the audited accounts of the petitioner society. There was society. There was, thus, no failure on the part of the , thus, no failure on the part of the petitioner to disclose fully and truly all the material facts petitioner to disclose fully and truly all the material facts petitioner to disclose fully and truly all the material facts necessary for assessment. The essential requirement to necessary for assessment. The essential requirement to necessary for assessment. The essential requirement to enable the Assessing Officer to reopen the assessment and enable the Assessing Officer to reopen the assessment and enable the Assessing Officer to reopen the assessment and the period of four years is, thus, not sati the period of four years is, thus, not satisfied. Therefore, sfied. Therefore, without without without going going going into into into the further the further the further question question question of of of the the the very very very maintainability of the belief of the Assessing Officer that the maintainability of the belief of the Assessing Officer that the maintainability of the belief of the Assessing Officer that the assessee's income has escaped assessment within the assessee's income has escaped assessment within the assessee's income has escaped assessment within the meaning of section 147 of the Act, we find sufficient meaning of section 147 of the Act, we find sufficient meaning of section 147 of the Act, we find sufficient justification in justification in thepetitioner's questioning the reopening the thepetitioner's questioning the reopening the process only on the ground that there was no failure on the process only on the ground that there was no failure on 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 part of the petitioner to disclose truly and fully all the material 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 The contention of the ld DR that explanation below the section The contention of the ld DR that explanation below the section 147 of the Act prescribing‘ prescribing‘producing books of amount does not producing books of amount does not amount to full and true disclosure of material facts amount to full and true disclosure of material facts’ ’, is not relevant in the case as the AO has not pointed out an in the case as the AO has not pointed out any material fact material fact, which was not disclosed during regular assessment proceedings. was not disclosed during regular assessment proceedings. was not disclosed during regular assessment proceedings.

6.5 In view of the above discussion, the reassessment proceedings In view of the above discussion, the reassessment proceedings In view of the above discussion, the reassessment proceedings , firstly, due to the reason that reassessment cannot be sustained, , due to the reason that reassessment ’, secondly, no proceeding are based on mere based on mere ‘change of opinion disclosure of full and true material facts by the assessee before the disclosure of full and true material facts by the assessee before the disclosure of full and true material facts by the assessee before the assessing officer, has not been substantiated by the Assessing assessing officer, has not been substantiated by the Assessing assessing officer, has not been substantiated by the Assessing officer, thirdly, there being no internal or external material to , there being no internal or external material to , there being no internal or external material to trigger the reopening of assessment trigger the reopening of assessment or for recording or for recording the reasons to

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 14 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

believe that income escaped assessment believe that income escaped assessment, the action is a kind of , the action is a kind of review of assessment review of assessment already completed, for which the AO is not which the AO is not permitted. Hence, the reassessment proceeding u/s 147 of the the reassessment proceeding u/s 147 of the the reassessment proceeding u/s 147 of the Act is quashed as void ab initio void ab initio. The ground No. 1 and 2 of the appeal nd 2 of the appeal of the assessee are accordingly allowed. the assessee are accordingly allowed.

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 15 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

“5.0 It is found from records that the assessee had filed an 5.0 It is found from records that the assessee had filed an 5.0 It is found from records that the assessee had filed an appeal against a subsequent Order us 154 rectifying the appeal against a subsequent Order us 154 rectifying the appeal against a subsequent Order us 154 rectifying the instant Order underAppeal passed by the CPC, Bangalore for instant Order underAppeal passed by the CPC, Bangalore for instant Order underAppeal passed by the CPC, Bangalore for the same A. Yr. By virtue of the Doctrine of Merger, the the same A. Yr. By virtue of the Doctrine of Merger, the the same A. Yr. By virtue of the Doctrine of Merger, the intimation us 143(1) dated 12/01/2017 had merged with the imation us 143(1) dated 12/01/2017 had merged with the imation us 143(1) dated 12/01/2017 had merged with the rectification Order us 154 dated 06/07/2019. rectification Order us 154 dated 06/07/2019.” 10. We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that the Ld. CIT(A) has dismissed the appeal merely for the reason that dismissed the appeal merely for the reason that dismissed the appeal merely for the reason that issue-in-dispute has already been merged in the rectification order dispute has already been merged in the rectification order dispute has already been merged in the rectification order dated 06.07.2019 u/s 154 of the Act against which the assessee dated 06.07.2019 u/s 154 of the Act against which the assessee dated 06.07.2019 u/s 154 of the Act against which the assessee also filed appeal before before the Ld. CIT(A). In view of the fact that the Ld. CIT(A). In view of the fact that against rectification order passed by the Assessing Officer, the tification order passed by the Assessing Officer, the tification order passed by the Assessing Officer, the assessee had already preferred appeal before the Ld. CIT(A), we assessee had already preferred appeal before the Ld. CIT(A), we assessee had already preferred appeal before the Ld. CIT(A), we concur with the finding of the Ld. CIT(A) concur with the finding of the Ld. CIT(A) that that no separate

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 16 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

adjudication is required on required on the issue of adjustment made u/s the issue of adjustment made u/s 143(1) when the same adjustment for disallowance of deduction u/s me adjustment for disallowance of deduction u/s me adjustment for disallowance of deduction u/s 80P was raised in appeal filed with relation to consequent 80P was raised in appeal filed with relation to consequent 80P was raised in appeal filed with relation to consequent rectification order. The ground The grounds of appeal of the assessee are of appeal of the assessee are accordingly dismissed. accordingly dismissed.

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 17 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

scope even the interest income earned by the respondent scope even the interest income earned by the respondent scope even the interest income earned by the respondent assessee, a co assessee, a co-operative Society from a Co-operative Bank operative Bank and this exclusion by Section 80P(4) of the Act even though and this exclusion by Section 80P(4) of the Act even though and this exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is without any amendment in Section 80P(2)(d) of the Act is without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction sufficient to deny the claim of the assessee for deduction sufficient to deny the claim of the assessee for deduction under Section 80P(2)( under Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and 3. "Whether on the facts and circumstances of the case and 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction 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 u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that earned from deposits in cooperative bank ignoring that earned from deposits in cooperative bank ignoring that whether the whether the deposits and investment of surplus funds of deposits and investment of surplus funds of assessee not immediately required for its purposes, is made assessee not immediately required for its purposes, is made assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co with Scheduled Bank or Nationalized Banks or with co with Scheduled Bank or Nationalized Banks or with co- operative Banks does not make a difference as far as the operative Banks does not make a difference as far as the operative Banks does not make a difference as far as the character of the income earned by assesse character of the income earned by assessee is concerned e is concerned and it does not partake the character of its operational and it does not partake the character of its operational and it does not partake the character of its operational income from its activity as cooperative housing society, the income from its activity as cooperative housing society, the income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be same would continue to be fully taxable and will not be same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." eligible for deduction under section 80P(2)(d) of the Act." eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and ther on the facts and circumstances of the case and ther on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction /s.80P(2)(d) of the Income Tax Act in respect of interest /s.80P(2)(d) of the Income Tax Act in respect of interest /s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court earned from deposits, though Hon'ble Karnataka High Court earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussin in a detailed judgment discussing the law and various g the law and various related issues in the case of PCIT Vs Totagar's Cooperative related issues in the case of PCIT Vs Totagar's Cooperative related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 IT 74) has specifically decided the Sales Society(392 IT 74) has specifically decided the Sales Society(392 IT 74) has specifically decided the Question of Law about the allowability of interest earned Question of Law about the allowability of interest earned Question of Law about the allowability of interest earned from deposits from deposits- with Cooperative Bank u/s. 80P(2)(d) of the with Cooperative Bank u/s. 80P(2)(d) of the Income Tax Act in favour of the Revenue." ome Tax Act in favour of the Revenue." 12.1 The The The grounds grounds grounds raised raised raised by by by the the the assessee assessee assessee in ITA No. 221/Mum/2023 are reproduced as under: are reproduced as under:

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 18 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 19 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

by the Assessing Officer by the Assessing Officer, has allowed the claim of the assessee has allowed the claim of the assessee observing as under:

“7. Having heard the rival contentions, we noticed that there 7. Having heard the rival contentions, we noticed that there 7. Having heard the rival contentions, we noticed that there is merit in the contentions of the assessee as it is supported is merit in the contentions of the assessee as it is supported is merit in the contentions of the assessee as it is supported by the order passed by the SMC Bench in by the order passed by the SMC Bench in the case of the case of Citiscape Co Citiscape Co-operative Housing Society Ltd. (supra) and also operative Housing Society Ltd. (supra) and also the decision rendered by the Division Bench in the case of the decision rendered by the Division Bench in the case of the decision rendered by the Division Bench in the case of Sea Grean Co Sea Grean Co-operative Housing Society Ltd. (supra). For the operative Housing Society Ltd. (supra). For the sake of convenience, we extract below the operative portion sake of convenience, we extract below the operative portion sake of convenience, we extract below the operative portion of the order passed by the Division Bench in the case of Sea the order passed by the Division Bench in the case of Sea the order passed by the Division Bench in the case of Sea Grean Co-operative Housing Society Ltd.(supra): operative Housing Society Ltd.(supra): “5. We have carefully considered the rival submissions. The “5. We have carefully considered the rival submissions. The “5. We have carefully considered the rival submissions. The facts lie in a narrow compass, inasmuch as, the appellant is facts lie in a narrow compass, inasmuch as, the appellant is facts lie in a narrow compass, inasmuch as, the appellant is a Cooperative society, whos operative society, whose income, inter-alia, included alia, included interest earned on deposits with another Cooperative bank. interest earned on deposits with another Cooperative bank. interest earned on deposits with another Cooperative bank. Accordingly, such income was claimed as exempt under Accordingly, such income was claimed as exempt under Accordingly, such income was claimed as exempt under section 80P(2)(d) of the Act. The claim has been denied section 80P(2)(d) of the Act. The claim has been denied section 80P(2)(d) of the Act. The claim has been denied primarily on account of the fact that section 80P(2)(d) o primarily on account of the fact that section 80P(2)(d) o primarily on account of the fact that section 80P(2)(d) of the Act relates to the income earned from a Co Act relates to the income earned from a Co-operative society. operative society. In this context, the decision of the MumbaiTribunal in the In this context, the decision of the MumbaiTribunal in the In this context, the decision of the MumbaiTribunal in the case of Lands End Co case of Lands End Co-operative Housing Society Ltd. (supra) operative Housing Society Ltd. (supra) is rendered under identical circumstances and the following is rendered under identical circumstances and the following is rendered under identical circumstances and the following discussion is relevant: n is relevant:- “8.3 We have heard the rival submissions and perused the “8.3 We have heard the rival submissions and perused the “8.3 We have heard the rival submissions and perused the material on record. We find that the CIT(A) enhanced the material on record. We find that the CIT(A) enhanced the material on record. We find that the CIT(A) enhanced the income of the assessee by rejecting the deduction u/s income of the assessee by rejecting the deduction u/s income of the assessee by rejecting the deduction u/s 80P(2)(d) of the Act of Rs.14,88,107/ 80P(2)(d) of the Act of Rs.14,88,107/- being interest on being interest on investment wit investment with other Coop. banks by following the decision h other Coop. banks by following the decision in the case of Bandra Samruddihi Cooperative Housing in the case of Bandra Samruddihi Cooperative Housing in the case of Bandra Samruddihi Cooperative Housing Society Ltd.(Supra) which was passed on the basis of the Society Ltd.(Supra) which was passed on the basis of the Society Ltd.(Supra) which was passed on the basis of the decision passed by the Hon’ble Supreme Court in the case of decision passed by the Hon’ble Supreme Court in the case of decision passed by the Hon’ble Supreme Court in the case of Totagar’s Cooperative Sale Society Ltd. Totagar’s Cooperative Sale Society Ltd. In the case of In the case of Totagar’s Co Totagar’s Co-operative Sale Society Ltd v/s ITAT (supra) the operative Sale Society Ltd v/s ITAT (supra) the Hon’ble Supreme Court while interpreting the section Hon’ble Supreme Court while interpreting the section Hon’ble Supreme Court while interpreting the section 80P(2)(a)(i) of the Act held that surplus funds not immediately 80P(2)(a)(i) of the Act held that surplus funds not immediately 80P(2)(a)(i) of the Act held that surplus funds not immediately required in the business and invested in the short term required in the business and invested in the short term required in the business and invested in the short term deposit would be assessable under the head “income from would be assessable under the head “income from would be assessable under the head “income from other sources” where the Cooperative society is engaged in other sources” where the Cooperative society is engaged in other sources” where the Cooperative society is engaged in

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 20 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

carrying on business of banking or providing credit facilities carrying on business of banking or providing credit facilities carrying on business of banking or providing credit facilities to its members and consequently no deduction is allowable to its members and consequently no deduction is allowable to its members and consequently no deduction is allowable u/s 80P(2)(a)(i) of the Act u/s 80P(2)(a)(i) of the Act. Whereas in the case before us the . Whereas in the case before us the issue is whether a co issue is whether a co-operative society which has derived operative society which has derived income on investment with cooperative banks is entitled to income on investment with cooperative banks is entitled to income on investment with cooperative banks is entitled to deduction u/s 80P(2)(d). The provisions of Section 80P(2)(d) deduction u/s 80P(2)(d). The provisions of Section 80P(2)(d) deduction u/s 80P(2)(d). The provisions of Section 80P(2)(d) of the Act provide deduction in respect of of the Act provide deduction in respect of income by way of income by way of interest or dividend on investments made with other interest or dividend on investments made with other interest or dividend on investments made with other Cooperative society. For the purposes of better proper Cooperative society. For the purposes of better proper Cooperative society. For the purposes of better proper understanding of these two provisions the relevant extract of understanding of these two provisions the relevant extract of understanding of these two provisions the relevant extract of the section are reproduced below: 80P: Deduction in respect the section are reproduced below: 80P: Deduction in respect the section are reproduced below: 80P: Deduction in respect of income of co of co-operative Societies. 1. Where, in the case of an assesssee being a co 1. Where, in the case of an assesssee being a co 1. Where, in the case of an assesssee being a co-operative society, the gross total income, includes any income referred society, the gross total income, includes any income referred society, the gross total income, includes any income referred to in sub-section (2), there shall be deducted, in accordance section (2), there shall be deducted, in accordance section (2), there shall be deducted, in accordance with and subject to the provisions of this s with and subject to the provisions of this section, the sums ection, the sums specified in sub specified in sub-section (2), in computing the total income of section (2), in computing the total income of the assessee. the assessee. 2. The sums referred to in sub 2. The sums referred to in sub-section (1) shall be the section (1) shall be the following, namely: following, namely:- (a)In the case of a co-operative society operative society engaged in- (i) Carrying on the business of (i) Carrying on the business of banking or providing credit banking or providing credit facilities to its members. The whole of the amount of profits facilities to its members. The whole of the amount of profits facilities to its members. The whole of the amount of profits and gains of business attributable to any one or more of and gains of business attributable to any one or more of and gains of business attributable to any one or more of much attributes. much attributes. (d)In respect of any income by way of interest or dividends (d)In respect of any income by way of interest or dividends (d)In respect of any income by way of interest or dividends derived by the co derived by the co-operative society from its investments with iety from its investments with any other co- -operative society, the whole of such income.” operative society, the whole of such income.” From the close perusal of the provisions of u/s 80P(2)(a)(i) From the close perusal of the provisions of u/s 80P(2)(a)(i) 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 and 80P(2)(d) it is clear that the former deals with deduction and 80P(2)(d) it is clear that the former deals with deduction in respect of profits and gain of busines in respect of profits and gain of business in case of the co s in case of the co- operative society carrying on business of banking or operative society carrying on business of banking or operative society carrying on business of banking or providing credit facilities to its members if the said income is providing credit facilities to its members if the said income is providing credit facilities to its members if the said income is assessable as income from business whereas latter provides assessable as income from business whereas latter provides assessable as income from business whereas latter provides for deduction in respect of income by way interest and for deduction in respect of income by way interest and for deduction in respect of income by way interest and dividend derived by assessee from its investments with other dend derived by assessee from its investments with other dend derived by assessee from its investments with other cooperative society. Thus it is amply clear that a cooperative cooperative society. Thus it is amply clear that a cooperative cooperative society. Thus it is amply clear that a cooperative society can only avail deduction u/s 80P(2)(d)(i) in respect of society can only avail deduction u/s 80P(2)(d)(i) in respect of society can only avail deduction u/s 80P(2)(d)(i) in respect of

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 21 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

its income assessable as business income and not as income its income assessable as business income and not as income its income assessable as business income and not as income from other so from other sources if it carries on business of the banking or urces if it carries on business of the banking or providing credit facilities to its members and has income providing credit facilities to its members and has income providing credit facilities to its members and has income assessable under the head business whereas for claiming assessable under the head business whereas for claiming assessable under the head business whereas for claiming u/s 80P(2)(d) it must have income of interest and dividend on u/s 80P(2)(d) it must have income of interest and dividend on u/s 80P(2)(d) it must have income of interest and dividend on investments with other Co investments with other Co-operative society may or may not ative society may or may not be engaged in the banking for providing credit facilities to its be engaged in the banking for providing credit facilities to its be engaged in the banking for providing credit facilities to its members and the head under which the income is members and the head under which the income is members and the head under which the income is assessable is not material for the claim of deduction under assessable is not material for the claim of deduction under assessable is not material for the claim of deduction under this section. Now will evaluate the assessee’s case in this section. Now will evaluate the assessee’s case in this section. Now will evaluate the assessee’s case in the light of the decision of the Hon’ble Supreme court. The light of the decision of the Hon’ble Supreme court. The light of the decision of the Hon’ble Supreme court. The Honble Supreme Court in the case of Totagar’s Co Honble Supreme Court in the case of Totagar’s Co Honble Supreme Court in the case of Totagar’s Co-operative Sale Society Ltd.(Supra) held that a society has surplus Sale Society Ltd.(Supra) held that a society has surplus Sale Society Ltd.(Supra) held that a society has surplus funds which are invested in short term deposits where the funds which are invested in short term deposits where the funds which are invested in short term deposits where the society is engaged in society is engaged in the business of banking or providing the business of banking or providing credit facilities to its members in that case the said income credit facilities to its members in that case the said income credit facilities to its members in that case the said income from short term deposits shall be treated and assessed as from short term deposits shall be treated and assessed as from short term deposits shall be treated and assessed as income from other sources and deduction u/s 80(P)(2)(a)(i) income from other sources and deduction u/s 80(P)(2)(a)(i) income from other sources and deduction u/s 80(P)(2)(a)(i) would not be available meaning thereby t would not be available meaning thereby that deduction u/s hat deduction u/s 80(P)(2)(a)(i) is available only in respect of income which is 80(P)(2)(a)(i) is available only in respect of income which is 80(P)(2)(a)(i) is available only in respect of income which is assessable as business income and not as income from other assessable as business income and not as income from other assessable as business income and not as income from other sources. Whereas in distinction to this , the provisions of sources. Whereas in distinction to this , the provisions of sources. Whereas in distinction to this , the provisions of section 80(P)(2)(d) of the Act provides for deduction in section 80(P)(2)(d) of the Act provides for deduction in 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 of income of a coop society by way of interest or dividend of income of a coop society by way of interest or dividend from its investments with other coop society if such income is from its investments with other coop society if such income is from its investments with other coop society if such income is included in the gross total income of the such coop society. In included in the gross total income of the such coop society. In included in the gross total income of the such coop society. In view these facts and circumstances we are of the considered view these facts and circumstances we are of the considered view these facts and circumstances we are of the considered view that the assessee is entitled to the deduction of Rs. iew that the assessee is entitled to the deduction of Rs. iew that the assessee is entitled to the deduction of Rs. 14,88,107/- in respect of interest received/derived by it on in respect of interest received/derived by it on deposits with coop. banks and therefore the appeal of the deposits with coop. banks and therefore the appeal of the deposits with coop. banks and therefore the appeal of the assessee is allowed by reversing the order of the CIT(A). The assessee is allowed by reversing the order of the CIT(A). The assessee is allowed by reversing the order of the CIT(A). The AO is directed ac AO is directed accordingly. 5.1 It is clear that the Tribunal in the case of Lands End 5.1 It is clear that the Tribunal in the case of Lands End 5.1 It is clear that the Tribunal in the case of Lands End Cooperative Housing Society Ltd. (supra) has considered a Cooperative Housing Society Ltd. (supra) has considered a Cooperative Housing Society Ltd. (supra) has considered a similar situation and allowed the claim of the assessee. We similar situation and allowed the claim of the assessee. We similar situation and allowed the claim of the assessee. We find that the CIT(A) has placed reliance on the decision of the find that the CIT(A) has placed reliance on the decision of the find that the CIT(A) has placed reliance on the decision of the Ahmedabad Bench of the Tribunal in the case of State Bank dabad Bench of the Tribunal in the case of State Bank dabad Bench of the Tribunal in the case of State Bank of India Employees Co of India Employees Co-operative Credit Society Ltd 57 operative Credit Society Ltd 57 taxman.com 367. It is further noted by the CIT(A) that the taxman.com 367. It is further noted by the CIT(A) that the taxman.com 367. It is further noted by the CIT(A) that the said decision of the Ahmedabad Bench of the Tribunal has said decision of the Ahmedabad Bench of the Tribunal has said decision of the Ahmedabad Bench of the Tribunal has been referred to by the SMC Benc been referred to by the SMC Bench of Mumbai Tribunal in the h of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd. (supra). case of Shri Saidatta Cooperative Credit Society Ltd. (supra). case of Shri Saidatta Cooperative Credit Society Ltd. (supra).

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 22 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 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 In our view, the reliance placed by the CIT(A) on the In our view, the reliance placed by the CIT(A) on the judgment of the Ahmedabad Bench of the Tribunal is quite judgment of the Ahmedabad Bench of the Tribunal is quite judgment of the Ahmedabad Bench of the Tribunal is quite untenable, inasmuch as, in the said case the interest untenable, inasmuch as, in the said case the interest untenable, inasmuch as, in the said case the interest income in question was earned from deposits kept with State Bank in question was earned from deposits kept with State Bank in question was earned from deposits kept with State Bank of India. Obviously, State Bank of India is not a Co of India. Obviously, State Bank of India is not a Co of India. Obviously, State Bank of India is not a Co-operative society so as to justify the claim that such interest earnings society so as to justify the claim that such interest earnings society so as to justify the claim that such interest earnings fall within the scope of section 80P(2)(d) of the Act. Further, fall within the scope of section 80P(2)(d) of the Act. Further, 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 he reliance placed by the CIT(A) on the decision of the SMC he reliance placed by the CIT(A) on the decision of the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Bench of Mumbai Tribunal in the case of Shri Saidatta Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd.(supra) is also of no avail, Cooperative Credit Society Ltd.(supra) is also of no avail, Cooperative Credit Society Ltd.(supra) is also of no avail, inasmuch as, the Bench merely set inasmuch as, the Bench merely set-aside the matter to the aside the matter to the file of the Assessing Of file of the Assessing Officer for examination afresh, whereas ficer for examination afresh, whereas in the case of Lands End Co in the case of Lands End Co-operative Housing Society operative Housing Society Ltd(supra), the claim of exemption under section 80P(2)(d) of Ltd(supra), the claim of exemption under section 80P(2)(d) of Ltd(supra), the claim of exemption under section 80P(2)(d) of the Act with respect to the interest earned from a Co the Act with respect to the interest earned from a Co the Act with respect to the interest earned from a Co- operative bank has been upheld. Therefore, in vi operative bank has been upheld. Therefore, in vi operative bank has been upheld. Therefore, in view of the said precedent, the claim of the assessee deserves to be said precedent, the claim of the assessee deserves to be said precedent, the claim of the assessee deserves to be allowed. We hold so. allowed. We hold so. 8. In view of the foregoing, we set aside the order passed by 8. In view of the foregoing, we set aside the order passed by 8. In view of the foregoing, we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to allow the learned CIT(A) and direct the Assessing Officer to allow the learned CIT(A) and direct the Assessing Officer to allow deduction u/s 80P(2)(d) of the Act in respec deduction u/s 80P(2)(d) of the Act in respect of interest t of interest earned by the assessee from the deposits kept with Co earned by the assessee from the deposits kept with Co earned by the assessee from the deposits kept with Co- operative Banks. operative Banks.” 15.1 Respectfully following the finding of the Tribunal Respectfully following the finding of the Tribunal Respectfully following the finding of the Tribunal (supra) in the case of the assessee itself case of the assessee itself, we do not find any error in the order of , we do not find any error in the order of the Ld CIT(A) on the the Ld CIT(A) on the issue-in-dispute for following the binding dispute for following the binding precedents. The grounds of appeal of the Revenue are accordingly precedents. The grounds of appeal of the Revenue are accordingly precedents. The grounds of appeal of the Revenue are accordingly dismissed.

15.2 As far as grounds of the As far as grounds of the assesseeseeking deduction u/s assesseeseeking deduction u/s 80P(2)(d) of the Act for interest from other than cooperative bank i.e 80P(2)(d) of the Act for interest from other than cooperative bank i.e 80P(2)(d) of the Act for interest from other than cooperative bank i.e nationalized bank,are concerned, are concerned, the ld counsel relied on the the ld counsel relied on the decision of the Tribunal in ITA No. 604/Pun/2014 in the case of Tribunal in ITA No. 604/Pun/2014 in the case of Tribunal in ITA No. 604/Pun/2014 in the case of Shri Laxmi Narayan NagriSahkari Pat SansthanMaryadait for Shri Laxmi Narayan NagriSahkari Pat SansthanMaryadait Shri Laxmi Narayan NagriSahkari Pat SansthanMaryadait

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 23 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

assessment year 2010 assessment year 2010-11 and decision of hon’ble and decision of hon’ble High Court of Culcutta in the case of PCIT Vs Gunja Samabay Krishi Unnayan case of PCIT Vs Gunja Samabay Krishi Unnayan case of PCIT Vs Gunja Samabay Krishi Unnayan Samity Ltd reported in (2013) 147 taxmann.com 518 (Calcutta). Samity Ltd reported in (2013) 147 taxmann.com 518 (Calcutta). Samity Ltd reported in (2013) 147 taxmann.com 518 (Calcutta). On perusal of the said On perusal of the said decisions, we find that interest from short we find that interest from short- term deposits with scheduled bank has been held as eligible by the term deposits with scheduled bank has been held as eligible by the term deposits with scheduled bank has been held as eligible by the Tribunal (supra) and Calcutta High Court (supra) and Calcutta High Court (supra) under section and Calcutta High Court (supra) 80P(2)(a)(i) of the Act and not under the section 80P(2)(d) of the Act. ct and not under the section 80P(2)(d) of the Act. ct 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 view that the Ld. CIT(A) has not adjudicated the issue view that the Ld. CIT(A) has not adjudicated the issue in dispute of eligibility of deduction of interest from scheduled b of eligibility of deduction of interest from scheduled bank of eligibility of deduction of interest from scheduled b u/s 80P(2)(d) of the Act, Act,therefore the assessee should be given one the assessee should be given one more opportunity to appear before the Ld CIT(A) so that he can give more opportunity to appear before the Ld CIT(A) so that he can give more opportunity to appear before the Ld CIT(A) so that he can give his finding on the matter. I his finding on the matter. In the interest of the natural natural justice, we feel it appropriate to restore this issue bac feel it appropriate to restore this issue back to the file of the Ld. k to the file of the Ld. CIT(A) for deciding after providing adequate opportunity of being CIT(A) for deciding after providing adequate opportunity of being CIT(A) for deciding after providing adequate opportunity of being heard to the assessee. to the assessee. In the circumstances, the ground of appeal In the circumstances, the ground of appeal of the assessee is accordingly of the assessee is accordingly allowed for statistical purposes allowed for statistical purposes.

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 24 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

definition of "Co inition of "Co- operative Society" and requiring them to operative Society" and requiring them to deduct income tax at source under Section 194A of the Act deduct income tax at source under Section 194A of the Act deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co that also makes the legislative intent clear that the Co that also makes the legislative intent clear that the Co- operative Banks are not that specie of genus co operative Banks are not that specie of genus co operative Banks are not that specie of genus co-operative society, which are entitle society, which are entitled to claim deduction under the d to claim deduction under the special provisions of ChapterVIA in the form of Section 80P of special provisions of ChapterVIA in the form of Section 80P of special provisions of ChapterVIA in the form of Section 80P of the Act." 2. "Whether on the facts and circumstances of the case and 2. "Whether on the facts and circumstances of the case and 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act u/s.80P(2)(d) of the Income Tax Act in respect of interest in respect of interest earned from deposits in cooperative bank ignoring firstly, the earned from deposits in cooperative bank ignoring firstly, the earned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub purpose of bringing on the statute book sub-section (4) in section (4) in Section 80P of the Act to exclude the applicability of Section Section 80P of the Act to exclude the applicability of Section Section 80P of the Act to exclude the applicability of Section 80P of the Act altogether to any co 80P of the Act altogether to any co-operative ba operative bank and secondly, ignoring the fact that words used in section 80P(4) secondly, ignoring the fact that words used in section 80P(4) secondly, ignoring the fact that words used in section 80P(4) are "in relation to that can include within its ambit and scope are "in relation to that can include within its ambit and scope are "in relation to that can include within its ambit and scope even the interest income earned by the respondent assessee, even the interest income earned by the respondent assessee, even the interest income earned by the respondent assessee, a co-operative Society from a Co operative Society from a Co-operative Bank and this operative Bank and this exclusion by Section 80P(4) of the Act even though without ion by Section 80P(4) of the Act even though without ion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to any amendment in Section 80P(2)(d) of the Act is sufficient to any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction under Section deny the claim of the assessee for deduction under Section deny the claim of the assessee for deduction under Section 80P(2)(d) of the Act." 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and 3. "Whether on the facts and circumstances of the case and 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction 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 u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that earned from deposits in cooperative bank ignoring that earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of whether the deposits and investment of surplus funds of whether the deposits and investment of surplus funds of assessee not immediately requ assessee not immediately required for its purposes, is made ired for its purposes, is made with Scheduled Bank or Nationalized Banks or with co with Scheduled Bank or Nationalized Banks or with co with Scheduled Bank or Nationalized Banks or with co- operative Banks does not make a difference as far as the operative Banks does not make a difference as far as the operative Banks does not make a difference as far as the character of the income earned by assessee is concerned character of the income earned by assessee is concerned character of the income earned by assessee is concerned and it does not partake the character of its operational and it does not partake the character of its operational and it does not partake the character of its operational income from its activity as cooperative housing society, the come from its activity as cooperative housing society, the come from its activity as cooperative housing society, the same would continue to be fully taxable and will not be same would continue to be fully taxable and will not be same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." eligible for deduction under section 80P(2)(d) of the Act." eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and 4. "Whether on the facts and circumstances of the case and 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) in law, the Ld.CIT(A) was correct in allowing deduction was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court earned from deposits, though Hon'ble Karnataka High Court earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various in a detailed judgment discussing the law and various in a detailed judgment discussing the law and various

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 25 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

related issues in the case of PCIT Vs Totagar's Coo related issues in the case of PCIT Vs Totagar's Coo related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 ITR 74) has specifically decided the Sales Society(392 ITR 74) has specifically decided the Sales Society(392 ITR 74) has specifically decided the Question of Law about the allowability of interest earned Question of Law about the allowability of interest earned Question of Law about the allowability of interest earned from deposits with Cooperative Bank u/s. 80P(2)(d) of the from deposits with Cooperative Bank u/s. 80P(2)(d) of the from deposits with Cooperative Bank u/s. 80P(2)(d) of the Income Tax Act in favour of the Revenue." Income Tax Act in favour of the Revenue." 16.1 The ground raised by the asse The ground raised by the assessee is reproduced as under: ssee is reproduced as under:

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 26 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

operation and therefore, no compliance was operation and therefore, no compliance was made. But the ld AO made. But the ld AO rejected the contention of the assessee and imposed penalty of the contention of the assessee and imposed penalty of @ of the contention of the assessee and imposed penalty of Rs.10,000/- for each default totaling to Rs.50,000/ for each default totaling to Rs.50,000/-. .

“4.0 The records of the assessee and its submissions were 4.0 The records of the assessee and its submissions were 4.0 The records of the assessee and its submissions were duly perused.It is fou duly perused.It is found that Notice us 142(1) were issued nd that Notice us 142(1) were issued and served on the assessee on 09/8/2018, 21/08/2018, and served on the assessee on 09/8/2018, 21/08/2018, and served on the assessee on 09/8/2018, 21/08/2018, 25/09/2018, 28/01/2019 and 30/09/2019, fixing the 25/09/2018, 28/01/2019 and 30/09/2019, fixing the 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, dates for hearing on 23/8/2018, 10/10/2018, 06/02/2019, 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 07/10/2019 and 12/12/2019 respectively but there was no 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 liance on the part of the assessee. As per Page 2 of the liance on the part of the assessee. As per Page 2 of the assessment order, assessment proceedings were completed assessment order, assessment proceedings were completed assessment order, assessment proceedings were completed as per provisions of Section 144 of the I.T. Act, 1961. Show as per provisions of Section 144 of the I.T. Act, 1961. Show 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 cause notice u/s 274 r.w.s. 272A(1)(d) dated 17/12/2019 cause notice u/s 274 r.w.s. 272A(1)(d) dated 17/12/2019 was issued and served on t was issued and served on the assessee. Fresh opportunity he assessee. Fresh opportunity was provided by issue of notice u/s 274 r.w.s. 272A(1)(d) was provided by issue of notice u/s 274 r.w.s. 272A(1)(d) was provided by issue of notice u/s 274 r.w.s. 272A(1)(d) dated dated dated 22/12/2020 22/12/2020 22/12/2020 and and and 25/03/2021. 25/03/2021. 25/03/2021. However, However, However, the the the assessee had put in a reply only on 06/01/2020 which assessee had put in a reply only on 06/01/2020 which assessee had put in a reply only on 06/01/2020 which reads inter alia as follows: "Dear Sir Our advocate went reads inter alia as follows: "Dear Sir Our advocate went reads inter alia as follows: "Dear Sir Our advocate went throught eye Operation therefore he did not appeared same e Operation therefore he did not appeared same e Operation therefore he did not appeared same time he submitted reply for the A. Yr 2012 time he submitted reply for the A. Yr 2012-13 and A. Yr 13 and A. Yr 2013-14." 4.1 The assessee also submitted a prescription from an eye 4.1 The assessee also submitted a prescription from an eye 4.1 The assessee also submitted a prescription from an eye specialist, perusal of which reveals that the purported specialist, perusal of which reveals that the purported specialist, perusal of which reveals that the purported Authorized Representative of Authorized Representative of the assessee had undergone a the assessee had undergone a cataract operation on 26/01/2019 and was advised rest for cataract operation on 26/01/2019 and was advised rest for cataract operation on 26/01/2019 and was advised rest for 3 weeks. 5.0 The plea taken by the assessee that the purported 5.0 The plea taken by the assessee that the purported 5.0 The plea taken by the assessee that the purported Authorized Representative was busy in finalization of Authorized Representative was busy in finalization of Authorized Representative was busy in finalization of accounts etc. or that he had undergone a cataract s accounts etc. or that he had undergone a cataract s accounts etc. or that he had undergone a cataract surgery does not appear to be a reasonable cause for failure on the does not appear to be a reasonable cause for failure on the does not appear to be a reasonable cause for failure on the

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 27 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

part of the assessee / purported authorized representative to part of the assessee / purported authorized representative to part of the assessee / purported authorized representative to comply with the Notices issued over a period of more than comply with the Notices issued over a period of more than comply with the Notices issued over a period of more than one year and /or request for online adjournments. Even this one year and /or request for online adjournments. Even this one year and /or request for online adjournments. Even this basic work was not carried out. The reasons for non k was not carried out. The reasons for non k was not carried out. The reasons for non- compliance to Notices are general in nature and without compliance to Notices are general in nature and without compliance to Notices are general in nature and without sufficient cause. The assessee had thus not demonstrated sufficient cause. The assessee had thus not demonstrated sufficient cause. The assessee had thus not demonstrated with documentary evidence any reasonable and just cause with documentary evidence any reasonable and just cause with documentary evidence any reasonable and just cause for failure on its part to carry out its dut for failure on its part to carry out its duties of compliance. ies of compliance. There was a total non There was a total non-cooperation on the part of the cooperation on the part of the assessee during the entire course of assessment proceedings assessee during the entire course of assessment proceedings assessee during the entire course of assessment proceedings and the reasons put forth are not sufficient enough to exempt and the reasons put forth are not sufficient enough to exempt and the reasons put forth are not sufficient enough to exempt the assessee from the clutches of the provisions of section the assessee from the clutches of the provisions of section 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 5.2 In the facts and under the circumstances of the case, I do 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 not find any merit in the submissions of the assessee and as not find any merit in the submissions of the assessee and as such the instant appeal is hereby disposed off as such the instant appeal is hereby disposed off as such the instant appeal is hereby disposed off as "DISMISSED." "DISMISSED." 21. We have heard rival submission of the parties on the is We have heard rival submission of the parties on the is We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that the Assessing Officer has levied penalty u/s 272A of the Act for the Assessing Officer has levied penalty u/s 272A of the Act for the Assessing Officer has levied penalty u/s 272A of the Act for non-compliance on the part of the assessee for various notices compliance on the part of the assessee for various notices 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 issued u/s 142(1) of the Act. We find that regarding th 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, it 142(1) of the Act dated 09.08.2018, 21.08.2018 and 25.09.2018 142(1) of the Act dated 09.08.2018, 21.08.2018 and 25.09.2018 was submitted by the assessee that the authorized was submitted by the assessee that the authorized representative of representative of the assessee was busy in was busy in preparation of profit and loss account preparation of profit and loss account and balance sheet and balance sheet for tax payers as the due date of filing for date of filing for income-tax return for assessment year 2018 tax return for assessment year 2018-19 in the case of non 19 in the case of non- tax audit taxes was was 31.07.2019 and in the case of tax audit in the case of tax audit , was on 30.09.2018 ,therefore, due to therefore, due to rush of filing income filing income-tax returns, he could not respond to the Assessi he could not respond to the Assessing Officer. Regarding the notice ng Officer. Regarding the notice dated 28.01.2019, it was submitted that representative of the it was submitted that representative of the it was submitted that representative of the

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 28 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

assessee was operated by a doctor for eye surgery operated by a doctor for eye surgery operated by a doctor for eye surgery and therefore said notice could not be said notice could not be complied.

21.1 Regarding the notice Regarding the notice for 30.09.2019, it was submitted that it was submitted that due to date of filing of return of income for non due to date of filing of return of income for non-tax audit cases tax audit cases, he could not respond to the notice. It was submitted on the part of the could not respond to the notice. It was submitted on the part of the 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 assessee that there was no deliberate intention to non assessee that there was no deliberate intention to non the Assessing officer Assessing officer. Before us, the Ld. Counsel of the assessee ore us, the Ld. Counsel of the assessee relied on the decision of the Tribunal in the case of Triumph relied on the decision of the Tribunal in the case of relied on the decision of the Tribunal in the case of International Finance India Ltd International Finance India Ltd in ITA No. 1870/Mum/2020 in ITA No. 1870/Mum/2020. The relevant finding of the Tribunal The relevant finding of the Tribunal(supra) is reproduced as under: is reproduced as under:

“4. We have heard the submis 4. We have heard the submissions made by rival sides. The sions made by rival sides. The Assessing Officer vide order dated 21/12/2019 has levied Assessing Officer vide order dated 21/12/2019 has levied Assessing Officer vide order dated 21/12/2019 has levied penalty of Rs.10,000/ penalty of Rs.10,000/- under section 272A(1)(d) of the Act for under section 272A(1)(d) of the Act for non-compliance of the notice issued under section. 142(1) of compliance of the notice issued under section. 142(1) of compliance of the notice issued under section. 142(1) of the Act. Undisputedly, no explanation was fu the Act. Undisputedly, no explanation was furnished by the rnished by the assessee before the Assessing Officer for non assessee before the Assessing Officer for non-compliance of compliance of the notice under section 142(1) of the Act. As per the the notice under section 142(1) of the Act. As per the the notice under section 142(1) of the Act. As per the contentions of ld. Authorized Representative of the assessee, contentions of ld. Authorized Representative of the assessee, contentions of ld. Authorized Representative of the assessee, the notice under section 142(1) of the Act was served on the the notice under section 142(1) of the Act was served on the the notice under section 142(1) of the Act was served on the assessee electronically. The Department was gradually essee electronically. The Department was gradually essee electronically. The Department was gradually moving towards e moving towards e-assessments and the notices were being assessments and the notices were being served to the assessee online/electronically and the year served to the assessee online/electronically and the year served to the assessee online/electronically and the year 2019 being the first year of this shift from physical to 2019 being the first year of this shift from physical to 2019 being the first year of this shift from physical to electronic mode coupled with the f electronic mode coupled with the fact that assessee was not act that assessee was not carrying out any business operations during the relevant carrying out any business operations during the relevant carrying out any business operations during the relevant period and hence, was working on minimal employees, the period and hence, was working on minimal employees, the period and hence, was working on minimal employees, the employees of the assessee failed to take not of the notice employees of the assessee failed to take not of the notice employees of the assessee failed to take not of the notice issued electronically. We are satisfied that the assessee issued electronically. We are satisfied that the assessee issued electronically. We are satisfied that the assessee has been able to show reasonable cause for not responding to the been able to show reasonable cause for not responding to the been able to show reasonable cause for not responding to the initial notice issued under section 142(1) of the Act. It is initial notice issued under section 142(1) of the Act. It is initial notice issued under section 142(1) of the Act. It is pertinent to mention here that subsequently on learning pertinent to mention here that subsequently on learning pertinent to mention here that subsequently on learning about ongoing assessment proceedings, the assessee about ongoing assessment proceedings, the assessee about ongoing assessment proceedings, the assessee appeared before the Ass appeared before the Assessing Officer and furnished the essing Officer and furnished the

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 29 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

requisite details. The Assessing Officer after taking note of requisite details. The Assessing Officer after taking note of requisite details. The Assessing Officer after taking note of the documents/submissions of the assessee has passed the the documents/submissions of the assessee has passed the the documents/submissions of the assessee has passed the assessment order under section 143(3) of the Act . It is not a assessment order under section 143(3) of the Act . It is not a assessment order under section 143(3) of the Act . It is not a case of absolute non case of absolute non-appearance of the assessee before the sessee before the Assessing Officer. Assessing Officer. 5. The first appellate authority has rejected the explanation 5. The first appellate authority has rejected the explanation 5. The first appellate authority has rejected the explanation furnished by the assessee for non furnished by the assessee for non-compliance of the notice compliance of the notice issued under section 142(1) of the Act merely for the reason issued under section 142(1) of the Act merely for the reason issued under section 142(1) of the Act merely for the reason that during penalty proceedings unde that during penalty proceedings under section 272A(1)(d) of r section 272A(1)(d) of the Act, the assessee has not stated the reasonable cause. the Act, the assessee has not stated the reasonable cause. the Act, the assessee has not stated the reasonable cause. We are not in agreement with the findings of CIT(A). The We are not in agreement with the findings of CIT(A). The We are not in agreement with the findings of CIT(A). The assessee has explained that about ongoing assessment assessee has explained that about ongoing assessment assessee has explained that about ongoing assessment proceedings the assessee came to know only on receipt of proceedings the assessee came to know only on receipt of proceedings the assessee came to know only on receipt of order u/s. 272A(1)(d) of the Act and demand notice. The u/s. 272A(1)(d) of the Act and demand notice. The u/s. 272A(1)(d) of the Act and demand notice. The explanation furnished by the assessee before the CIT(A) and explanation furnished by the assessee before the CIT(A) and explanation furnished by the assessee before the CIT(A) and before the Tribunal is consistent. We are satisfied that before the Tribunal is consistent. We are satisfied that before the Tribunal is consistent. We are satisfied that nonappearance of the assessee in response to the initial nonappearance of the assessee in response to the initial nonappearance of the assessee in response to the initial notice under section 142(1) of t notice under section 142(1) of the Act was not deliberate. The he Act was not deliberate. The year 2019 being the initial year of shift towards digital and year 2019 being the initial year of shift towards digital and year 2019 being the initial year of shift towards digital and electronic mode, the mistake appears to be bonafide. The electronic mode, the mistake appears to be bonafide. The electronic mode, the mistake appears to be bonafide. The assessee has been able to show reasonable cause for the assessee has been able to show reasonable cause for the assessee has been able to show reasonable cause for the failure to comply with statutory notice u/s. 142(1 failure to comply with statutory notice u/s. 142(1 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 Thus, in our view penalty levied u/s. 272A(1)(d) of the Act is Thus, in our view penalty levied u/s. 272A(1)(d) of the Act is unsustainable. The Assessing Officer is directed to delete the unsustainable. The Assessing Officer is directed to delete the 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. In the case of BU Bhandari Auto P ltd in ITA No. 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) 324/PUN/2022 also the Tribunal deleted the penalty 324/PUN/2022 also the Tribunal deleted the penalty observing as under:

“6. We have carefully gone through the impugned orders and 6. We have carefully gone through the impugned orders and 6. We have carefully gone through the impugned orders and find that on receipt of notice u/s 142(1) dated 05.09.2019, find that on receipt of notice u/s 142(1) dated 05.09.2019, 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 the appellant sought time for 15 days to file the required the appellant sought time for 15 days to file the required details and the requisite details were fi details and the requisite details were filed on 04.11.2019. led on 04.11.2019. From the material on record, it appears that when the From the material on record, it appears that when the From the material on record, it appears that when the appellant sought time to file the details, thesaid application appellant sought time to file the details, thesaid application appellant sought time to file the details, thesaid application was not disposed of by the Assessing Officer either rejecting was not disposed of by the Assessing Officer either rejecting was not disposed of by the Assessing Officer either rejecting the said application or granting time. We also find that the said application or granting time. We also find that the said application or granting time. We also find that ultimately the assessment was completed by the Assessing ltimately the assessment was completed by the Assessing ltimately the assessment was completed by the Assessing Officer u/s 143(3) of the Act accepting the returned income. Officer u/s 143(3) of the Act accepting the returned income. Officer u/s 143(3) of the Act accepting the returned income.

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 30 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

Thus, it will conclusively prove that no prejudice was caused Thus, it will conclusively prove that no prejudice was caused Thus, it will conclusively prove that no prejudice was caused to the Assessing Officer on account of non to the Assessing Officer on account of non-complying with the complying with the notice u/s 142( notice u/s 142(1) issued on 05.09.2019 and inaction of the 1) issued on 05.09.2019 and inaction of the Assessing Officer on the adjournment petition moved by the Assessing Officer on the adjournment petition moved by the Assessing Officer on the adjournment petition moved by the assessee would also enable the appellant to believe that the assessee would also enable the appellant to believe that the assessee would also enable the appellant to believe that the time to comply with the extension of time as prayed was time to comply with the extension of time as prayed was time to comply with the extension of time as prayed was granted. Therefore, in the circumsta granted. Therefore, in the circumstances, we are of the nces, we are of the considered opinion that it cannot be said that the appellant is considered opinion that it cannot be said that the appellant is considered opinion that it cannot be said that the appellant is guilty of contumacious conduct to comply with the notice u/s guilty of contumacious conduct to comply with the notice u/s 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 142(1) of the Act. Thus, it is not a fit case for levy of penalty 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 u/s 272A(1)(d) of the Act. Accordingly, we di u/s 272A(1)(d) of the Act. Accordingly, we direct the Assessing Officer to delete the penalty of Rs.10,000/ Assessing Officer to delete the penalty of Rs.10,000/ Assessing Officer to delete the penalty of Rs.10,000/-. Hence, the ground of appeal raised by the assessee in the Hence, the ground of appeal raised by the assessee in the Hence, the ground of appeal raised by the assessee in the present appeal stands allowed. present appeal stands allowed.” 21.2 In the instant case before us also the assessee could not In the instant case before us also the assessee could not In the instant case before us also the assessee could not comply with the issue of notice issue of noticesdue to the reason that the the reason that the authorized representative authorized representative of assessee was occupied in was occupied in regulatory compliance on some some occasions and on one occasion, occasion, he could not respond due to medical emergency. In our opinion, the assessee respond due to medical emergency. In our opinion, the assessee respond due to medical emergency. In our opinion, the assessee should not be penalized for any should not be penalized for any bonafide non-compliance on the compliance on the part of the authorized representative of the assessee. The assessee part of the authorized representative of the assessee. The assessee part of the authorized representative of the assessee. The assessee has duly explained the reasons for non has duly explained the reasons for non-compliance. In our compliance. In our opinion, the failure in compliance to the notices is the failure in compliance to the notices is not deliberate on the part not deliberate on the part of the assessee. The reasons ci of the assessee. The reasons cited by the assessee for assessee for failure in compliance of the statutory notices u/s 142(1) of the Act of the statutory notices u/s 142(1) of the Act of the statutory notices u/s 142(1) of the Act are not malafide. Also, we note that ultimately the assessment order has Also, we note that ultimately the assessment order has Also, we note that ultimately the assessment order has been passed u/s 143(3) of the Act. been passed u/s 143(3) of the Act. The circumstances of the instant The circumstances of the instant case being identical t case being identical to the cases cited by the Ld. Counsel of the cited by the Ld. Counsel of the assessee. Therefore, respectfully following the same, we set aside assessee. Therefore, respectfully following the same, we set aside assessee. Therefore, respectfully following the same, we set aside the order of the Ld. CIT(A) on the issue the order of the Ld. CIT(A) on the issue-in-dispute and direct to dispute and direct to

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 31 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 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 delete the penalty levied u/s 272A of the Act by the Assessing delete the penalty levied u/s 272A of the Act by the Assessing Officer.

“1. "Whether on the facts and circumstances of the case and 1. "Whether on the facts and circumstances of the case and 1. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction 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 u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring the earned from deposits in cooperative bank ignoring the earned from deposits in cooperative bank ignoring the amendment made by Finance Act, 2015 in section 194A(3)(v) amendment made by Finance Act, 2015 in section 194A(3)(v) amendment made by Finance Act, 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the of the Act which excludes the Cooperative Banks from the of the Act which excludes the Cooperative Banks from the definition of "Co definition of "Co- operative Society" and requiring them to Society" and requiring them to deduct income tax at source under Section 194A of the Act deduct income tax at source under Section 194A of the Act deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that the Co that also makes the legislative intent clear that the Co that also makes the legislative intent clear that the Co- operative Banks are not that specie of genus co operative Banks are not that specie of genus co operative Banks are not that specie of genus co-operative society, which are entitled to claim deduction unde society, which are entitled to claim deduction unde society, which are entitled to claim deduction under the special provisions of Chapter VIA in the form of Section 80P special provisions of Chapter VIA in the form of Section 80P 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 2. "Whether on the facts and circumstances of the case and 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction 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 u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the rned from deposits in cooperative bank ignoring firstly, the rned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub purpose of bringing on the statute book sub-section (4) in section (4) in Section 80P of the Act to exclude the applicability of Section Section 80P of the Act to exclude the applicability of Section Section 80P of the Act to exclude the applicability of Section 80P of the Act altogether to any co 80P of the Act altogether to any co-operative bank and operative bank and secondly, ignoring secondly, ignoring the fact that words used in section 80P(4) the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and are "in relation to" that can include within its ambit and are "in relation to" that can include within its ambit and scope even the interest income earned by the respondent scope even the interest income earned by the respondent scope even the interest income earned by the respondent assessee, a co assessee, a co-operative Society from a Co-operative Bank operative Bank and this exclusion by Section 80P(4) of and this exclusion by Section 80P(4) of the Act even though the Act even though without any amendment in Section 80P(2)(d) of the Act is without any amendment in Section 80P(2)(d) of the Act is without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction sufficient to deny the claim of the assessee for deduction sufficient to deny the claim of the assessee for deduction under Section 80P(2)(d) of the Act." under Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and 3. "Whether on the facts and circumstances of the case and 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) w in law, the Ld.CIT(A) was correct in allowing deduction as correct in allowing deduction

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 32 ITA Nos. 217, 220, 221, 192/M/2023& 192 to 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 u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring that earned from deposits in cooperative bank ignoring that earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of whether the deposits and investment of surplus funds of whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, i assessee not immediately required for its purposes, i assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co with Scheduled Bank or Nationalized Banks or with co with Scheduled Bank or Nationalized Banks or with co- operative Banks does not make a difference as far as the operative Banks does not make a difference as far as the operative Banks does not make a difference as far as the character of the income earned by assessee is concerned character of the income earned by assessee is concerned character of the income earned by assessee is concerned and it does not partake the character of its operational and it does not partake the character of its operational and it does not partake the character of its operational income from its activity a income from its activity as cooperative housing society, the s cooperative housing society, the same would continue to be fully taxable and will not be same would continue to be fully taxable and will not be same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of the Act." eligible for deduction under section 80P(2)(d) of the Act." eligible for deduction under section 80P(2)(d) of the Act." 4. "Whether on the facts and circumstances of the case and 4. "Whether on the facts and circumstances of the case and 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing in law, the Ld.CIT(A) was correct in allowing 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 u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits, though Hon'ble Karnataka High Court earned from deposits, though Hon'ble Karnataka High Court earned from deposits, though Hon'ble Karnataka High Court in a detailed judgment discussing the law and various in a detailed judgment discussing the law and various in a detailed judgment discussing the law and various related issues in the case of PCIT Vs Totagar's Cooperative related issues in the case of PCIT Vs Totagar's Cooperative related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(3 Sales Society(392 IT 74) has specifically decided the 92 IT 74) has specifically decided the Question of Law about the allowability of interest earned Question of Law about the allowability of interest earned Question of Law about the allowability of interest earned from deposits with Cooperative Bank u/s. 80P(2)(d) of the from deposits with Cooperative Bank u/s. 80P(2)(d) of the from deposits with Cooperative Bank u/s. 80P(2)(d) of the Income Tax Act in favour of the Revenue.' Income Tax Act in favour of the Revenue.' 22.1 The grounds raised by the assessee are reproduced as u The grounds raised by the assessee are reproduced as u The grounds raised by the assessee are reproduced as under:

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 33 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

23.1 As far as ground No. 2 of the appeal of the assessee is As far as ground No. 2 of the appeal of the assessee is As far as ground No. 2 of the appeal of the assessee is concerned, the assessee has raised the issue of addition of the assessee has raised the issue of addition of the assessee has raised the issue of addition of Rs.16,53,669/-as other receipts shown under the s other receipts shown under the head “ income s other receipts shown under the from other sources”. The rele . The relevant table reproduced by the Assessing vant table reproduced by the Assessing Officer in para 5, is extracted as under: is extracted as under: Sr. No. Particulars Particulars Amount (in Rs.) Amount (in Rs.) 1. Interest from FD in Bank Interest from FD in Bank 3,50,60,858/- 2. Interest on bank savings Interest on bank savings 9,817/- 3. Dividend received from Mumbai Dist. Dividend received from Mumbai Dist. 5,246/- Central Co-op. Bank Central Co 4. Other receipts Other receipts 16,53,669/- 24. However, we find that ultimately in the assessment order, the However, we find that ultimately in the assessment order, the However, we find that ultimately in the assessment order, the Assessing Officer has assessed income u/s 56 of the Act in respect Assessing Officer has assessed income u/s 56 of the Act in respect Assessing Officer has assessed income u/s 56 of the Act in respect of interest earned from deposits with bank amounting to of interest earned from deposits with bank amounting to of interest earned from deposits with bank amounting to Rs.3,50,60,858/- and and after reducing the corresponding expenses of after reducing the corresponding expenses of Rs.1,20,70,152/- , , he he made made addition addition of of Rs.2,46,59,438/-. Rs.2,46,59,438/ Therefore, no addition has been made by the Assessing Officer in Therefore, no addition has been made by the Assessing Officer in Therefore, no addition has been made by the Assessing Officer in respect of other receipts of Rs.16,53,669/ respect of other receipts of Rs.16,53,669/- and therefore, the and therefore, the ground No. 2 raised by the raised by the assessee being infructuous infructuous, same is rejected.

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 34 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

amendment made by Finance Act amendment made by Finance Act, 2015 in section 194A(3)(v) , 2015 in section 194A(3)(v) of the Act which excludes the Cooperative Banks from the of the Act which excludes the Cooperative Banks from the of the Act which excludes the Cooperative Banks from the definition of "Co definition of "Co- operative Society" and requiring them to operative Society" and requiring them to deduct income tax at source under Section 194A of the Act deduct income tax at source under Section 194A of the Act deduct income tax at source under Section 194A of the Act that also makes the legislative intent clear that th that also makes the legislative intent clear that th that also makes the legislative intent clear that the Co- operative Banks are not that specie of genus co operative Banks are not that specie of genus co operative Banks are not that specie of genus co-operative society, which are entitled to claim deduction under the society, which are entitled to claim deduction under the society, which are entitled to claim deduction under the special provisions of Chapter VIA in the form of Section 80P special provisions of Chapter VIA in the form of Section 80P 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 2. "Whether on the facts and circumstances of the case and 2. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction law, the Ld.CIT(A) was correct in allowing deduction law, the Ld.CIT(A) was correct in allowing deduction u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring firstly, the earned from deposits in cooperative bank ignoring firstly, the earned from deposits in cooperative bank ignoring firstly, the purpose of bringing on the statute book sub purpose of bringing on the statute book sub-section (4) in section (4) in Section 80P of the Act Section 80P of the Act to exclude the applicability of Section to exclude the applicability of Section 80P of the Act altogether to any co 80P of the Act altogether to any co-operative bank and operative bank and secondly, ignoring the fact that words used in section 80P(4) secondly, ignoring the fact that words used in section 80P(4) secondly, ignoring the fact that words used in section 80P(4) are "in relation to" that can include within its ambit and are "in relation to" that can include within its ambit and are "in relation to" that can include within its ambit and scope even the interest income earned b scope even the interest income earned by the respondent y the respondent assessee, a co assessee, a co-operative Society from a Co-operative Bank operative Bank and this exclusion by Section 80P(4) of the Act even though and this exclusion by Section 80P(4) of the Act even though and this exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is without any amendment in Section 80P(2)(d) of the Act is without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the assessee for deduction sufficient to deny the claim of the assessee for deduction sufficient to deny the claim of the assessee for deduction under Section 80P(2)(d) of the Act." Section 80P(2)(d) of the Act." 3. "Whether on the facts and circumstances of the case and 3. "Whether on the facts and circumstances of the case and 3. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction 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 u/s.80P(2)(d) of the Income Tax Act in respect of interest u/s.80P(2)(d) of the Income Tax Act in respect of interest earned from deposits in cooperative bank ignoring earned from deposits in cooperative bank ignoring earned from deposits in cooperative bank ignoring that whether the deposits and investment of surplus funds of whether the deposits and investment of surplus funds of whether the deposits and investment of surplus funds of assessee not immediately required for its purposes, is made assessee not immediately required for its purposes, is made assessee not immediately required for its purposes, is made with Scheduled Bank or Nationalized Banks or with co with Scheduled Bank or Nationalized Banks or with co with Scheduled Bank or Nationalized Banks or with co- operative Banks does not make a difference as far as the operative Banks does not make a difference as far as the operative Banks does not make a difference as far as the character of the income e character of the income earned by assessee is concerned arned by assessee is concerned and it does not partake the character of its operational and it does not partake the character of its operational and it does not partake the character of its operational income from its activity as cooperative housing society, the income from its activity as cooperative housing society, the income from its activity as cooperative housing society, the same would continue to be fully taxable and will not be same would continue to be fully taxable and will not be same would continue to be fully taxable and will not be eligible for deduction under section 80P(2)(d) of t eligible for deduction under section 80P(2)(d) of the Act." he Act." 4. "Whether on the facts and circumstances of the case and 4. "Whether on the facts and circumstances of the case and 4. "Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction in law, the Ld.CIT(A) was correct in allowing deduction us.80P(2)(d) of the Income Tax Act in respect of interest us.80P(2)(d) of the Income Tax Act in respect of interest us.80P(2)(d) of the Income Tax Act in respect of interest

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 35 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

earned from deposits, though Hon'ble Karnataka High Court earned from deposits, though Hon'ble Karnataka High Court earned from deposits, though Hon'ble Karnataka High Court in a detailed ju in a detailed judgment discussing the law and various dgment discussing the law and various related issues in the case of PCIT Vs Totagar's Cooperative related issues in the case of PCIT Vs Totagar's Cooperative related issues in the case of PCIT Vs Totagar's Cooperative Sales Society(392 IT 74) has specifically decided the Sales Society(392 IT 74) has specifically decided the Sales Society(392 IT 74) has specifically decided the Questionof Law about the allowability of interest earned from Questionof Law about the allowability of interest earned from Questionof Law about the allowability of interest earned from deposits. with Cooperative Bank u/s. 80P(2 deposits. with Cooperative Bank u/s. 80P(2)(d) of the Income )(d) of the Income Tax Act in favour of the Revenue." Tax Act in favour of the Revenue." 25.1 The ground raised by the assessee is reproduced as under: The ground raised by the assessee is reproduced as under: The ground raised by the assessee is reproduced as under:

“1. On the facts and circumstances of the case in Law, Ld. 1. On the facts and circumstances of the case in Law, Ld. 1. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming disallowing 80P deduction on CIT(A) erred in confirming disallowing 80P deduction on CIT(A) erred in confirming disallowing 80P deduction on account of interest rece account of interest received from other than cooperative ived from other than cooperative bank. 2. On the facts and circumstances of the case in Law, Ld. 2. On the facts and circumstances of the case in Law, Ld. 2. On the facts and circumstances of the case in Law, Ld. CIT(A) erred in confirming addition of Rs. 23,16,155/ CIT(A) erred in confirming addition of Rs. 23,16,155/ CIT(A) erred in confirming addition of Rs. 23,16,155/-.” 26. The grounds raised by the assessee and the Revenue in the The grounds raised by the assessee and the Revenue in the The grounds raised by the assessee and the Revenue in the above appeals are identical above appeals are identical to grounds raised in assessment year aised in assessment year 2018-19 therefore, same are adjudicated 19 therefore, same are adjudicated mutatis mutandis mutatis mutandis.

Sr. No. ITA No. ITA No. Assessment Year Result 1. 217/M/2023 217/M/2023 2013-14 allowed allowed 2. 220 /M/2023 220 /M/2023 2016-17 dismissed dismissed 3. 221/M/2023 221/M/2023 2016-17 Allowed for statistical Allowed for statistical purposes purposes 4. 218/M/2023 218/M/2023 2017-18 allowed allowed 5. 219/M/2023 219/M/2023 2017-18 Allowed for statistical Allowed for statistical purposes purposes 6. 214M/2023 214M/2023 2020-21 Allowed Allowed partly partly for for

Sai Prerana Co-op Credit Society Ltd. Sai Prerana Co 36 ITA Nos. 217, 220, 221, 192/M/2023& 192 to ITA Nos. 217, 220, 221, 192/M/2023& 192 to 195/M/2023

statistical purposes statistical purposes 7. 215/M/2023 215/M/2023 2018-19 Allowed Allowed partly partly for for statistical purposes statistical purposes 8. 192/M/2023 192/M/2023 2016-17 dismissed dismissed 9. 193/M/2023 193/M/2023 2017-18 dismissed dismissed 10. 194/M/2023 194/M/2023 2018-19 dismissed dismissed 11. 195/M/2023 195/M/2023 2020-21 dismissed dismissed

Order pronounced in the open Court on nounced in the open Court on 27/04/2023. /04/2023. Sd/- Sd/ Sd/- (KULDIP SINGH KULDIP SINGH) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 27/04/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai