Diamond Jubilee Co Operative Bank Limited Vs Union of India & Ors (Gujarat High Court)
The Gujarat High Court allowed the writ petition and quashed reassessment proceedings initiated against a co-operative society in respect of deduction claimed under Section 80P(2)(d) of the Income-tax Act, 1961.
The petitioner is a co-operative society registered under the laws of the State of Gujarat. It was earlier engaged in banking, but its banking licence was cancelled by the Reserve Bank of India on 19.06.2004. Thereafter, it functioned only as a co-operative society through its Official Liquidator. For Assessment Year 2020-21, the petitioner filed its return of income on 31.12.2020. The return was selected for scrutiny, and notices under Sections 143(2) and 142(1) were issued and duly complied with. After considering detailed replies and supporting material, the assessment was completed under Section 143(3) read with Section 144B on 26.09.2022.
Subsequently, respondent authorities issued notices dated 31.03.2025 and 23.05.2025 under Section 148A(1), alleging that the petitioner had wrongly claimed deduction under Section 80P(2)(d) on interest income earned from co-operative banks. These notices were based on an unsigned audit memorandum. The petitioner filed detailed objections explaining that it was not a co-operative bank and that its claim was legally valid. Despite these objections, an order under Section 148A(3) was passed on 29.06.2025, followed by issuance of a notice under Section 148 on the same date.
