Chotanagpur Catholic Mission Co-operative Credit Society Vs PCIT (ITAT Ranchi)
Assessee, a registered co-operative credit society at Ranchi, provides banking & credit facilities exclusively to its members. It had been consistently allowed deduction u/s 80P(2) in earlier & subsequent assessment years.For A.Y. 2017-18, the assessment was completed u/s 143(3) on 09-12-2019. AO examined all records, including membership details (about 74,000 members), the nature of operations, fund deployment, & cash deposits during demonetisation, & allowed deduction u/s 80P.
Subsequently, PCIT invoked revisionary powers u/s 263, alleging that:
- The society’s primary objective was not lending to members but accepting deposits, & therefore it did not qualify under section 80P; &
- Excess transfer to reserve funds showed that the society was not being run as per its bye-laws.
He therefore set aside the assessment order & directed a fresh assessment.
Before the Tribunal, Assessee argued that:
- AO had examined every issue during scrutiny, including cash deposits, member details, & reserve-fund allocation.
- PCIT had no new tangible material to justify invoking section 263; he merely substituted his opinion for that of the AO.
- Deduction u/s 80P had been allowed consistently in earlier & later years, including A.Y. 2022-23 (where assessment u/s 143(3) again accepted the claim).
Revenue relied on the Supreme Court rulings in Totgars Co-operative Sales Society v. ITO (322 ITR 283) & Secunderabad Club v. CIT (153 taxmann.com 441), contending that the Pr.CIT’s revision was valid.
