| The Tax Publishers2022 TaxPub(DT) 0523 (Pune-Trib) INCOME TAX ACT, 1961
Section 263
Where two views are available on a particular issue and AO adopted one of such views, the case goes outside the purview of revisional power exercisable by Pr. CIT under section 263 and view taken by AO in the case, cannot, by any standard, be termed as not a possible view, further, assessee was engaged in the activity of marketing agricultural produce by its members, therefore, Pr. CIT was not justified in exercising the revisional power qua the interest income in the circumstances as are obtaining in this case.
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Revision under section 263 - Validity - Deduction under section 80P on interest income - AO adopted one of possible view
Assessee was engaged in accepting deposits from members and providing loans/advances to its members. PCIT observed that the assessee claimed deduction under section 80P on interest earned from other co-operative societies which, in his opinion, was not eligible for deduction under section 80P(2). It was held that the assessee was not eligible for deduction under section 80P. He, therefore, set-aside the assessment order by holding it as erroneous and prejudicial to the interest of Revenue and accordingly directed AO to re-frame the assessment after affording opportunity of hearing to the assessee.Held: An assessment order can be termed as erroneous and prejudicial to the interest of the revenue, if AO has taken a view which is not legally tenable. Per contra, if two views are available on a particular issue and AO adopted one of such views, the case goes outside the purview of revisional power exercisable by PCIT under section 263.View taken by AO in the case, cannot, by any standard, be termed as not a possible view. Assessee was engaged in the activity of marketing agricultural produce by its members. Accepting deposits from its members and providing credit facility to its members; running stores, rice mills, live stocks, van section, medical shops, lodging, plying and hiring of goods and carriage, etc. Thus, Pr. CIT was not justified in exercising the revisional power qua the interest income in the circumstances as are obtaining in this case.
Followed:Totgars' Cooperative Sale Society Ltd. v. ITO (2010) 322 ITR 283 (SC) : 2010 TaxPub(DT) 1466 (SC), Pr. CIT v. Totagars Co-Operative Sale Society (2017) 395 ITR 611 (Karn-HC) : 2017 TaxPub(DT) 1748 (Karn-HC), Tumkur Merchants Souharda Credit Cooperative Ltd. v. ITO (2015) 230 Taxman 309 (Karn-HC) : 2015 TaxPub(DT) 2857 (Karn-HC), Mantola Co-Operative Thrift & Credit Society Ltd. v. CIT (2014) 110 DTR 89 (Del-HC) : 2014 TaxPub(DT) 3786 (Del-HC), Sureshdada Jain Nagari Sahakari Patsanstha Maryadit v. Pr. CIT [ITA No. 713/PUN/2016] : 2019 TaxPub(DT) 2223 (Pune-Trib) and Laxmi Narayan Nagari v. ITO [ITA No. 604/PN/2014].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
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