Shree Palitana Nagrik Sharafi Sahakari Mandali Limited Vs. Income Tax Officer

Parties Involved

Facts Summary

The assessee, Shree Palitana Nagrik Sharafi Sahakari Mandali Limited, is a credit co-operative society providing financial assistance to its members. For the Assessment Year 2020-21, the assessee filed a return declaring Nil income. The case was selected for limited scrutiny to verify the deduction claimed under section 80P of the Income Tax Act. The Assessing Officer (AO) had disallowed the deduction of Rs. 3,28,892/- claimed under section 80P of the Act, and the assessment was completed at a total income of Rs. 3,28,892/-. The assessee appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, which dismissed the appeal. The assessee then filed a second appeal before the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. The Ld. CIT(A) NFAC has erred in law and on facts in confirming the disallowance of deduction of Rs. 3,28,892/- claimed u/s. 80P(2)(d) of the Income Tax Act, 1961 in respect of interest income earned from Bhavnagar District Co Operative Bank Ltd.
• 2. The Ld. CIT(A) NFAC has erred in law and on facts in treating the interest income of Rs. 3,28,892/- (comprising Rs. 3,21,563/- from Fixed Deposits and Rs. 7,329/- from Savings Account with Bhavnagar District Co-operative Bank Ltd.) as Income from other sources under section 56 of the Act, when the said income is clearly eligible for deduction under section 80P(2)(d) of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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