ITO Vs Yashomandir Sahkari Patpedhi Maryadit (ITAT Mumbai)
Material Facts
The Revenue appealed against the order of the National Faceless Appeal Centre (NFAC) arising from an assessment framed under Sections 143(3) read with 263 read with 144B of the Income-tax Act, 1961 for Assessment Year 2018-19.
The assessee, a co-operative credit society engaged in accepting deposits from members and providing credit facilities to them, filed its return declaring nil income after claiming deduction under Section 80P amounting to Rs.3,66,44,343. The original assessment under Section 143(3) accepted the returned income after examining the deduction claimed under Section 80P.
Subsequently, the Principal Commissioner invoked revisional jurisdiction under Section 263, holding that the Assessing Officer had failed to properly examine the allowability of deduction under Section 80P in respect of interest earned from investments with co-operative banks and commercial banks. The Principal Commissioner directed the Assessing Officer to frame a fresh assessment.
Pursuant to the revisional order, the Assessing Officer completed a consequential assessment under Sections 143(3) read with 263 read with 144B, treating interest income of Rs.9,27,95,245 earned from deposits with co-operative banks and commercial banks as “Income from Other Sources” and denying deduction under Section 80P(2)(d).
Procedural History
The assessee challenged the consequential assessment before the CIT(A). During appellate proceedings, it was brought to the notice of the CIT(A) that the Tribunal had already quashed the Principal Commissioner’s order under Section 263 by order dated 19.06.2025.
