Mamasaheb Khandge Nagri Sahakari Vs PCIT (ITAT Pune)
263 Revision Quashed on 80P Interest: Pune ITAT Holds PCIT Can’t Overrule Settled Law for Credit Co-op Societies; Section 263 Revision Quashed for Substituting PCIT’s Opinion Over AO’s Due Inquiry; Revision Under Section 263 Held Invalid as Deduction Under Section 80P Was Lawfully Examined; Section 263 Cannot Be Invoked When AO’s View on Section 80P Is Supported by Consistent Precedents; PCIT’s Revision Set Aside as Exercise Under Section 263 Was a Futile and Academic Exercise; Revision Order Invalid for Violating Rule of Consistency in Allowing Section 80P Deduction; Assessment Not Erroneous Merely Because PCIT Disagreed With AO on Section 80P Deduction
Pune ITAT, ‘A’ Bench, in Mamasaheb Khandge Nagri Sahakari Patsanstha Maryadit Vs Pr. CIT, Pune-3 (ITA No.1212/PUN/2025; AY 2020-21; order dated 18-12-2025), allowed the assessee’s appeal and set aside the revision order u/s 263.
The Tribunal held that the assessment framed u/s 143(3) r.w.s. 144B, which allowed deduction u/s 80P on interest earned from deposits with co-operative banks, was neither erroneous nor prejudicial to the interests of the Revenue. The PCIT’s attempt to substitute his view for that of the AO—by directing denial of deduction u/s 80P(2)(a)(i)/80P(2)(d) read with section 80P(4)—was impermissible, especially when the AO had conducted due enquiry and allowed the claim.
Relying on consistent coordinate-bench decisions (including Ajinkaya Madhyamik Shikshak Sewak Sah. Patsanstha Maryadit) and affirmed precedents of the Bombay High Court and Supreme Court (Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd.), the Tribunal observed that primary credit co-operative societies are entitled to 80P deduction on such interest income. Since the AO would be barred from taking a contrary view on remand, the 263 exercise would be futile.
Accordingly, the 263 order was quashed and the assessee’s appeal allowed in full, reaffirming that revision cannot be used to unsettle a view already settled by higher judicial fora.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal filed by the assessee is directed against the order dated 13.03.2025 passed u/s 263 of the IT Act by Ld. Pr. CIT, Pune-3 [‘Ld. PCIT’] for the assessment year 2020-21.
