Loading judgment…
Facts
The Revenue appealed against the CIT(A)'s order which allowed the Assessee, a co-operative society, a deduction under Section 80P(2)(d) for interest earned from deposits in a co-operative bank. The original assessment made an addition under Section 68 for unexplained source of investment, a fact the CIT(A) allegedly overlooked.
Held
The Tribunal set aside the CIT(A)'s order and remanded the case for fresh consideration. The CIT(A) is directed to re-decide the Assessee's appeal, specifically considering the Assessing Officer's Section 68 addition, and grant the Assessee a fresh opportunity to be heard.
Key Issues
1. The correctness of allowing deduction under Section 80P(2)(d) for interest from deposits in a co-operative bank, in light of Section 80P(4) and the scope of investments in a co-operative society. 2. The CIT(A)'s failure to consider the Section 68 addition made by the Assessing Officer for unexplained source of investment.
Sections Cited
250, 144, 147, 80P(2)(d), 80P(4), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
order : 27.03.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Revenue is directed against the order, dated 21/08/2024, passed by the National Faceless Appeal Centre (NFAC), New Delhi [hereinafter referred to as ‘the CIT(A)’] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘ the Act’] whereby the Ld. CIT(A) had allowed the appeal against the Assessment Order, dated 19/12/2019, passed under Section 144 read with Section 147 of the Act for the Assessment Year 2012-2013.
2. The Revenue has raised following grounds of appeal : “1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in allowing deduction of Assessment Year 2012-2013 Rs.2,94,53,331/- u/s.80P(2)(d) of the Income Tax Act, 1961 in respect of interest earned from deposits from Co-operative bank whereas the deduction allowable u/s.80P(2)(d) is for investments in a co-operative society.
2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in allowing deduction of Rs.2,94,53,331/- u/s.80P(2)(d) of the Income Tax Act, 1961 in respect of interest earned on deposits in Co-operative Bank ignoring the purpose of bringing on the statute, provision of sub section (4) to section 80P of the Income Tax Act, 1961.”
3. We have heard both the sides and perused the material on record.
4. The Assessee in the present case claims to be a co-operative society eligible todeduction claim under Section 80P(2)(d) of the Act. On perusal of Assessment Order, dated 19/12/2019, passed under Section 144 read with Section 147 of the Act we find that addition of INR.2,94,63,530/- was made by the Assessing Officer under Section 68 of the Act since the Assessee had failed to provide the source of the aforesaid income/investment of INR.2,94,63,530/- during the assessment proceedings.
Being aggrieved, the Assessee had preferred the appeal before the CIT(A) raising the following ground of appeal: “1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in allowing deduction of Rs.2,94,53,331/- u/s.80P(2)(d) of the Income Tax Act, 1961 in respect of interest earned from deposits from Co-operative bank whereas the deduction allowable u/s.80P(2)(d) is for investments in a co-operative society.
2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in allowing deduction of Rs.2,94,53,331/- u/s.80P(2)(d) of the Income Tax Act, 1961 in respect of interest earned on deposits in Co-operative Bank ignoring the purpose of bringing on the statute, provision of sub section (4) to section 80P of the Income Tax Act, 1961.”
6. Vide order, dated 21/08/2024, impugned by way of the present appeal, the Learned CIT(A) had allowed the appeal preferred by the 2 Assessment Year 2012-2013 Assessee without appreciating the fact that the Assessing Officer had made addition under Section 68 of the Act. This was highlighted by the Learned Departmental Representative during the course of hearing. The Learned Authorities Representative for the Assessee accepted that the Assessing Officer has made addition under Section 68 of the Act.
7. In view of the above, the order, dated 21/08/2024, passed by the Learned CIT(A) is set aside with the directions to decide the grounds raised by the Assessee in appeal before the CIT(A) afresh after taking into consideration the findings of the Assessing Officer pertaining to addition made under Section 68 of the Act. The Assessee is granted liberty to revise grounds raised in appeal before CIT(A). The Learned CIT(A) is directed to grant reasonable opportunity of being heard to the Assessee. In terms of the aforesaid, Ground No.1 and 2 raised by the Revenue are allowed for statistical purpose.
8. In result, the appeal preferred by the Revenue is allowed for statistical purpose.