BANK EMPLOYEES CO-OPERATIVE SOCIETY LTD.,,ALLAHABAD vs. THE PR. CIIT, , ALLAHABAD

ITA 50/ALLD/2024Status: DisposedITAT Allahabad09 June 2026AY 2018-197 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer (AO) had conducted a detailed inquiry and considered the assessee's submissions regarding the nature of its business and the eligibility of interest income for deduction under Section 80P(2)(a)(i). Since the AO's view was plausible and supported by various judicial precedents, the PCIT could not invoke Section 263 merely due to a difference of opinion.

What were the facts?

The assessee, a cooperative society, claimed interest earned on fixed deposits as deductible business income under Section 80P(2)(a)(i). The PCIT invoked Section 263, considering the assessment order erroneous and prejudicial to revenue, citing the Totgars case where such interest was treated as 'income from other sources'. The assessee argued that the fixed deposits were made in the ordinary course of business to provide credit facilities to members.

What were the issues?

Whether the PCIT can invoke Section 263 when the AO has conducted a proper inquiry and taken a plausible view, and whether interest earned by a cooperative society on fixed deposits made in the ordinary course of business is eligible for deduction under Section 80P(2)(a)(i).

Which sections of the Income-tax Act were involved?

Section 263,Section 80P(2)(a)(i),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ALLAHABAD BENCH, ALLAHABAD

Hearing: 12.03.2026Pronounced: 09.06.2026

PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the orders of the ld. PCIT, Allahabad under section 263 of the Income Tax Act, 1961 dated 1.02.2024, wherein the ld. PCIT has set aside the assessment order passed by the Assessing Officer for the assessment year 2018-19 under section 143(3) on 8.04.2021. The grounds of appeal are as under:- “1. BECAUSE the learned PCIT has erred in law and on facts in treating the assessment order dated 08.04.2021 passed under section 143(3) read with sections 143(3A) and 143(38) of the Income Tax Act. 1961 (hereinafter referred to as the Act) as erroneous in so

The order continues below.

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