Navimengani Juth Seva Shakari Mandali Ltd. Vs. PCIT

Parties Involved

Facts Summary

The assessee, Navimengani Juth Seva Shakari Mandali Limited, appealed against the order passed by the Principal Commissioner of Income Tax (PCIT) under section 263 of the Income Tax Act, 1961, for the Assessment Year 2018-19. The PCIT had reopened the assessment and disallowed the deduction claimed by the assessee under section 80P(2)(d) of the Act for interest income received from a cooperative bank. The assessee argued that the PCIT's order was erroneous and prejudicial to the interest of the revenue. The Tribunal examined the issue and found that the assessing officer had taken a plausible view based on old judgments of the Gujarat High Court, which allowed the deduction of interest income from cooperative banks under section 80P(2)(d) of the Act. The Tribunal also noted that the recent judgment of the Gujarat High Court in Katlary Karayana (supra) did not apply to the assessee's case as it was in a different context. Therefore, the Tribunal quashed the order passed by the PCIT under section 263 of the Act and allowed the appeal.…

Legal Issues

• 1. Whether the order passed by the PCIT under section 263 of the Act is erroneous and prejudicial to the interest of the revenue?
• 2. Whether the interest income received from a cooperative bank is eligible for deduction under section 80P(2)(d) of the Act?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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