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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO& SHRI D.S. SUNDER SINGH
PER D.S. SUNDER SINGH, Accountant Member: These appeals are filed by the assessee against the order of the Pr.Commissioner of Income Tax (Pr.CIT)-1, Visakhapatnam u/s 263 of the Income Tax Act, 1961 (‘Act’ in short) vide F.No.Pr.CIT-1/VZP/263/1/2015-
2 I.T.A. No.79/Viz/2018and 12/Viz/2018 M/s VPT Cargo Handling Division (Traffic Department) Employees Co-operative Credit Society Limited, Visakhapatnam
16 28.03.2017 and F.No.Pr.CIT-1/VSP/263/15/2017-18 dated 29.03.2018 for the Assessment Years (A.Y.) 2012-13 and 2013-14 respectively.
Delay : There was a delay of 37 days in filing the appeal No.79/Viz/2018 for the A.Y. 2012-13. The assessee filed condonation petition giving reason for delay due to year end finalization of accounts. The assessee submitted that the order u/s 263 was received on 26.12.2017 and the appeal ought to have been filed on or before 24.02.2018 and it could be filed only on 02.04.2018 resulting in delay of 37 days. The delay was due to finalization of accounts in the month of February and March, general body meetings, dividend calculation and distributions etc. After hearing both the parties, the delay in filing the appeal is condoned.
The assessments were completed u/s 143(3) after allowing deduction u/s 80P of the Act. For the A.Y. 2012-13, the assessment was completed by an order dated 13.02.2015 and the assessee’s claim of deduction u/s 80P was allowed. Similarly for the A.Y. 2013-14, the assessment was completed by an order dated 28.10.2015 and the assessee’s claim of deduction u/s 80P was allowed. Subsequently, the Ld.Pr.CIT,
3 I.T.A. No.79/Viz/2018and 12/Viz/2018 M/s VPT Cargo Handling Division (Traffic Department) Employees Co-operative Credit Society Limited, Visakhapatnam
Visakhapatnam has taken up the case for revision u/s 263 and observed that the assessee derived interest on savings bank account and miscellaneous income which the Assessing Officer (AO) ought to have disallowed since the miscellaneous income and the interest on bank deposits was not earned from the members of the society. The Ld.Pr.CIT has issued the notice and called for explanation from the assessee and the assessee objected for revision stating that interest income relates to the deposits made representing the reserve fund and the interest on savings bank deposits. Similarly miscellaneous income also representing entrance fee and the penal charges collected from the members and not from other than members. The assessee further stated that the reserve fund is mandatorily to be maintained in the case of cooperative societies and the interest received and the miscellaneous income was utilized for the benefit of the members, hence submitted that there is no case for taking up the case for revision and requested to drop the proposal. Not being convinced with the explanation of the assessee, the Ld.Pr.CIT held that the assessment made u/s 143(3) is erroneous and prejudicial to the interest of the revenue and accordingly set aside the assessment made u/s 143(3) with a direction to redo the assessment afresh as per law.
4 I.T.A. No.79/Viz/2018and 12/Viz/2018 M/s VPT Cargo Handling Division (Traffic Department) Employees Co-operative Credit Society Limited, Visakhapatnam
Against the order of the Ld.Pr.CIT, the assessee is in appeal before this Tribunal.
We have heard both the parties and perused the material placed on record. In this case, assessments were completed u/s 143(3), after examining the details filed by the assessee the AO allowed deduction u/s 80P of the Act. Prima facie, from the order of the AO, the sole issue is with regard to deduction u/s 80P of the Act. The AO issued questionnaire, collected the details and examined the same and allowed deduction u/s 80P. Since the AO has examined the issue and allowed the deduction, any deviation from the order passed by the AO with regard to admissibility of deduction u/s 80P on interest income as well as miscellaneous income would amount to difference of opinion, but not an error. This Tribunal in the case of GVSL Kantha Rao Vs. Pr.CIT vide I.T.A. No.228/Viz/2017 held that the lack of investigation is a case for revision u/s 263 but not the improper verification or inadequate examination of the issue. For the sake of clarity and convenience, we extract relevant part of the order of the Tribunal as under :
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“7. From the assessment order, it is established that the assessing officer has examined the taxability of interest on postal deposits, agricultural loans and construction of building account and taken a conscious decision in respect of agricultural loans and the cost of construction of building that no addition is warranted and the transactions were genuine. With regard to the agricultural loan, the assessing officer stated that all the evidences were filed and examined. With respect to the construction account, the assessing officer examined the details and also obtained the Govt. valuer’s report and accepted the cost of construction. Prima facie, the assessing officer has conducted the necessary enquires, verified the information and taken the conscious decision before completing the assessment. However, Pr.CIT was of the view that the assessing officer has not conducted proper enquiries and there was apparent error of reasoning and law but not specified the error committed by the AO and how it was prejudicial to the interest of revenue. Not conducting the proper enquiries or inadequate enquiry does not give jurisdiction to the CIT for taking up the case for revision u/s 263. The Pr.CIT should make out case that the assessment order passed by the AO was erroneous and prejudicial to the interest of revenue. There should be an income which is not brought to tax by AO for revision. The Pr.CIT except stating that proper enquiries were not conducted by the AO, did not specify how the order is erroneous and prejudicial to the interest of the revenue and what was the income understated or under assessed by the AO. Since the assessing officer has conducted the enquiries and taken the decision on all the above issues there is no case of revision. Therefore, we are unable to sustain the order of the Ld.Pr.CIT and accordingly we set aside the order passed u/s 263 and restore the assessment order.”
In the instant case, the AO examined the issue and allowed the deduction u/s 80P after conducting the necessary enquiries. Since the AO has examined the issue and taken a conscious decision that the interest on bank deposits and the miscellaneous income as allowable u/s 80P, hence, there is no case for invoking the jurisdiction u/s 263 by the Ld.Pr.CIT. Thus, there is no error in the assessment order which required to be
6 I.T.A. No.79/Viz/2018and 12/Viz/2018 M/s VPT Cargo Handling Division (Traffic Department) Employees Co-operative Credit Society Limited, Visakhapatnam
modified. Accordingly, we are unable to sustain the order of the Ld.Pr.CIT and allow the appeals of the assessee.
In the result, appeals of the assessee are allowed.
Order pronounced in the open court on 13th February, 2019.
Sd/- Sd/- (िी.दुगाा राि) (धड.एस. सुन्दर धसंह) (V. DURGA RAO) (D.S. SUNDER SINGH) न्याधयक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER नवशधखधपटणम /Visakhapatnam नदनधंक /Dated : 13.02.2019 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee- M/s VPT Cargo Handling Division (Traffic Department), Employees Co-operative Credit Society Limited (Earlier known as M/s Dock Labour Board Employees Co-operative Credit Society Ltd.), D.L.B.Building, Port Area Visakhapatnam 2. रधजस्व/ The Revenue – ACIT, Circle-1(1), Visakhapatnam 3. The Pr.Commissioner of Income Tax-1, Visakhapatnam 4. तिभागीय प्रतितिति, आयकर अिीिीय अतिकरण, तिशाखािटणम /DR, ITAT, Visakhapatnam 5.गार्डफ़ाईि / Guard file आदेशािुसार / BY ORDER // True Copy //
Sr. Private Secretary ITAT, VISAKHAPATNAM