Gujarat State Co. Op. Agricultural And Rural Development Bank Ltd. Vs ITO (Gujarat High Court)
Summary: The Gujarat High Court allowed the writ petition filed by The Gujarat State Co. Op. Agricultural and Rural Development Bank Ltd. and quashed the notice dated 16/12/2019 issued under Section 148 of the Income-tax Act, 1961 for Assessment Year 2014-15. The Court held that the reopening was nothing but a change of opinion. The judgment also records that the reopening was required to be quashed and set aside on merits in light of Diamond Jubilee Co Operative Bank Limited Vs Union of India & Ors..
The petitioner, a co-operative Bank, filed its return for A.Y. 2014-15 on 17/11/2014 declaring total income at Rs.NIL after claiming exemption of Rs.28,91,29,255/- under Section 80P. The return was selected for scrutiny. During the scrutiny proceedings, the Assessing Officer issued a show cause notice dated 21/11/2016 concerning, among other matters, “interest income” claimed exempt under Section 80P(2)(d) and “other income” claimed exempt under Section 80P(2)(c). The petitioner supplied details concerning interest from co-operative banks and nationalized banks and furnished justification for its exemption claims.
After considering the material furnished, the Assessing Officer framed the scrutiny assessment under Section 143(3) on 02/12/2016. The assessment made two additions: Rs.11,28,91,418/- under Section 80P(2)(d) in respect of interest income from nationalized banks and Rs.32,61,000/- under Section 80P(2)(c) in respect of miscellaneous income and rental income. The assessed income was determined at Rs.11,61,52,425/-. The petitioner challenged the assessment before the Commissioner of Income Tax (Appeals), which dismissed the appeal on 17/02/2018. No further appeal was preferred against that appellate order.
