Balasinor Vikas Co.Op. Credit Society Ltd. vs. Pr.CIT

Parties Involved

Facts Summary

The assessee had filed his return of income for A.Y. 2017-18 on 18.10.2017 declaring Nil income. The original assessment was completed u/s.143(3) of the Act on 16.12.2019 at total income of Rs.15,50,868/-. Thereafter, the AO had initiated proceeding u/s.147 of the Act on the ground that the interest earned by the assessee on FD/Savings bank with co-operative banks amounting to Rs.31,39,316/- was not eligible for deduction u/s 80P(2)(d) of the Act and was liable to be assessed as ‘income from other source’. The AO had passed re-assessment order u/s. 147 r.w.s. 144B of the Act on 30.03.2022 on the income of Rs.15,50,864/- as per the original assessment order u/s. 143(3) of the Act dated 16.12.2019. In essence, no addition was made by the AO in the course of re-assessment proceeding. Thereafter, the ld. PCIT had called for the case records and held that the order u/s.147 of the Act dated 30.03.2022 was erroneous and prejudicial to the interest of Revenue for the reason that interest of Rs.31,39,316/- derived from other Co-operative Banks was not liable for deduction u/s. 80P(2)(d) of the Act and the AO had failed to make the addition. Accordingly, the Ld. PCIT had passed the impugned order directing to AO to make a fresh assessment and to make the disallowance u/s. 80P(2)(d) of the Act.…

Legal Issues

• 1. Whether the Ld. PCIT had erred in assumption of jurisdiction u/s.263 of the Act in respect of re-assessment order u/s.147 of the Act dated 30.03.2022, when the reopening proceeding was dropped by the AO.
• 2. Whether the revision order passed u/s. 263 of the Act by the Ld. PCIT is correct in the eyes of law.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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