Katlary Kariyana Merchant Sahkari Sarafi Mandali Ltd Vs ACIT (Gujarat High Court)
The writ petition challenged a notice dated 12.03.2019 issued under Sections 147 and 148 of the Income-tax Act, 1961 for Assessment Year 2015-16. The assessee, a cooperative society registered under the Gujarat Cooperative Societies Act, 1961 and engaged in accepting deposits and providing credit facilities to its members, had filed its return declaring nil income after claiming deduction under Section 80P. The return was accepted in scrutiny assessment under Section 143(3). Subsequently, the Assessing Officer initiated reassessment proceedings on the ground that deduction under Section 80P(2)(d) had been claimed on interest received from fixed deposits with cooperative banks and nationalised banks. The assessee objected to the reopening, contending that it had never claimed deduction under Section 80P(2)(d), that there was no tangible material, and that the reassessment was based merely on a change of opinion.
The Revenue contended that the reassessment was within four years, that the Assessing Officer had reason to believe income had escaped assessment, and that interest earned on deposits with cooperative banks and nationalised banks was not admissible for deduction under Sections 80P(2)(a)(i) or 80P(2)(d). It further submitted that no opinion on the applicability of Section 80P(2)(d) had been formed during the original assessment and that the assessee had not fully and truly disclosed the relevant facts.
