The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench has held that interest earned and dividend income from these Co-operative Societies/Banks should be taken into account while granting income tax deduction under Section 80P(2)(d) of the Income Tax Act.
The tribunal relied on the decision of Gujarat High Court in the case of Surat District Co-op. Milk Producers Union vs. ACIT, the CIT(A) has categorically mentioned that the Ahmedabad District Co-op. Bank Limited and the Gujarat State Co-operative Bank Limited are Co-operative Societies registered under Gujarat Co-operative Societies Act, 1961 and, therefore, the word Co-operative Society mentioned in Section 80P(20(d) of the Act includes these Co-operative Societies also and, therefore, the interest earned and dividend income from these Co-operative Societies/Banks should be taken into account while granting deduction under Section 80P(2)(d) of the Income Tax Act.
Facts
The respondent-assessee filed return of income declaring total income at Rs.82,40,873. The case was reopened on the basis of reasons recorded as the assessee offered income of Rs.82,40,873 after claiming deduction under Section 80P(2) of the Income Tax Act, 1961 amounting to Rs.1,93,38,659 which included dividend income of Rs.7,68,870/- and interest income of Rs.1,35,06,370.
As per Section 80P(2)(d) of the Income Tax Act, dividend income and fixed deposit interest are required to be disallowed and, therefore, proceedings under Section 147 of the Act was initiated and notice under Section 148 of the Act was issued to the assessee. In response to the said notice, the assesses did not file return of income. The assessee was issued show cause notice dated 21.12.2019 and the assessee replied the same. After taking cognisance of the same, the Assessing Officer disallowed the claim of the assessee under Section 80P of the Act to the extent of Rs.1,42,75,240.
Arguments
The assessee contended that as per Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963, the Tribunal should first decide that notice under Section 148 of the Act is bad in law because reopening is based on change of opinion. The assessee filed the application under Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963. The original assessment order was passed under Section 143(3) on the same issue which was actually examined and, therefore, the reopening itself is bad in law and in fact the reopening is a change of opinion and reassessment proceedings under Section 147 of the Act itself are bad in law.
The department argued that the CIT(A) has categorically decided this issue thereby observing that the assessee’s challenging validity of the proceedings under Section 144 read with Section 147 has become infructuous as the assessee ’s appeal was decided on merit.
Conclusion
The tribunal held that there is no need to interfere with the finding of the CIT(A). Thus, the appeal filed by the department is also dismissed.
Case Details
Case Name: The Income Tax Officer v/s Ahmedabad District Co-op. Milk Producers Union Limited
Citation: ITA Nos.533 & 666/Ahd/2023
Judges: Ms. Suchitra Kamble, Judicial Member And Shri Makarand Vasant Mahadeokar, Accountant Member
Order Date: 09/08/2024
Assesse by: S/Shri Manish J. Shah, Rushin Patel & Jimi Patel, ARs
Revenue by: Shri Sudhendu Das, CIT-DR & Smt. Malarkodi R, Sr. DR
