Gobichettipalayam Rev Dev VAO & VA T&C Society Ltd. Vs ITO (ITAT Chennai)
Income Tax Appellate Tribunal (ITAT) Chennai has partially allowed appeals filed by Gobichettipalayam Rev Dev VAO & VA T&C Society Ltd., remanding the matter of deduction claims under Section 80P(2)(d) and 80P(2)(a)(i) of the Income Tax Act, 1961, back to the Assessing Officer (AO) for verification. The appeals pertained to Assessment Years 2020-21 and 2021-22, with identical facts.
The dispute arose when the Centralized Processing Centre (CPC) initially denied a deduction of Rs. 13.48 lakh claimed by the assessee under Section 80P(2)(d). Subsequently, the Additional/Joint Commissioner of Income Tax (Appeals)-1, Vishakhapatnam (CIT(A)), issued an order on November 25, 2021, which contained contradictory directives.
In one part of the order (Para 5.2), the CIT(A) held that interest income derived from investments made with co-operative banks lacking a license under Section 22 of the Banking Regulation Act, 1949, would be eligible for deduction under Section 80P(2)(d). The AO was directed to verify this aspect and allow the deduction. However, in another section (Para 5.3), the CIT(A) stated that the assessee would not be eligible for deduction under Section 80P(2)(a)(i) and that interest income from co-operative banks should be treated as ‘Income from other sources,’ with Section 80P(2)(d) deduction being unavailable for such income. The CIT(A) also suggested eligibility for expenses under Section 57, directing the AO for verification.
