Mahesh Nagari Sahakari Patsanstha Maryadit Vs PCIT (ITAT Pune)
Section 263 Revision Quashed – Interest from Co-op Banks Eligible for U/s 80P Deduction – ITAT Pune Upholds AO’s Order
The ITAT Pune allowed the appeal of a primary credit co-operative society & quashed the revision order passed u/s 263, holding that the assessment allowing deduction u/s 80P was neither erroneous nor prejudicial to Revenue. The PCIT had invoked revision relying on Totagars & alleged that interest income on deposits should be taxed as “Income from Other Sources.”
The Tribunal observed that the assessee had wrongly selected section 80P(2)(f) due to a typographical error, whereas the claim actually fell under section 80P(2)(d) for interest earned from investments with other co-operative societies/banks. It noted consistent allowance of deduction in earlier scrutiny assessments & reliance on jurisdictional Pune Bench rulings supporting eligibility of such interest income.
Holding that the AO had taken a plausible view after examination of facts, the Tribunal ruled that revision u/s 263 was unjustified & accordingly set aside the PCIT’s order, allowing the assessee’s appeal in full.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal filed by the assessee is directed against the order dated 28.03.2025 passed u/s 263 of the IT Act by Ld. Pr. CIT, Pune-1 [‘Ld. PCIT’] for the assessment year 2020-21.
