Ahmednagar Zilla Gramsevakanchi Sahakari Patsanstha Maryadit Vs PCIT (ITAT Pune)
AO Made Proper Inquiry- Plausible View Prevails -80P Allowed: PCIT’s 263 Struck Down as Mere Change of Opinion
Assessee, a cooperative credit society, filed ROI claiming deduction of ₹49,84,373 u/s 80P(2). FAO completed assessment u/s 143(3) r.w.s.144B accepting returned income. PCIT invoked jurisdiction u/s 263 holding that AO failed to verify interest of ₹8,58,563 & dividend of ₹9,00,000 earned from deposits with a District Central Co-operative Bank, contending that such income is taxable u/s 56 in view of Totgar’s & that cooperative banks are excluded from 80P(2)(d). PCIT held the order erroneous & prejudicial & set aside assessment.
Tribunal, after examining queries & replies, found that AO had indeed raised specific queries, Assessee furnished detailed replies regarding statutory investments, nature of deposits, mandatory share subscription, & eligibility of deduction, & AO accepted the claim after considering materials. Tribunal held that once inquiry is made & a plausible view is taken, PCIT cannot substitute his opinion u/s 263 merely because he disagrees on interpretation.
Tribunal further observed that the impugned issue is covered in favour of Assessee by several coordinate Bench decisions, including Assessee’s own case for AY 2022-23 (Pune ITAT order dated 21.07.2025), which held that interest/dividend from co-operative banks qualifies for deduction u/s 80P(2)(a)(i)/80P(2)(d). Tribunal also relied on AP & Telangana HC in Vavveru Co-operative Rural Bank, Kerala HC in Sahyadri Co-operative Credit Society, Bombay HC & Supreme Court in Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd, all supporting Assessee’s eligibility.
