INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - Lack of enquiry -

Assessee was a Co-operative Society engaged in banking business. CIT invoked jurisdiction under section 263 and held assessment order to be erroneous and prejudicial to the interest of revenue on the ground that AO failed to determine income from other sources being deposits for which source was not explained. CIT invoked jurisdiction under section 263 and held assessment order to be erroneous and prejudicial to the interest of revenue on the ground that AO failed to determine income from other sources being deposits for which source was not explained.Held: Assessee was not a co-operative bank having the meaning assigned to it in Part V of Banking Regulation Act, 1949 (10 of 1949). AO sould have called for details of deposits and analysed identity, genuineness and creditworthiness of the same. Even if benefit of section 80P(4) was available to Primary Agricultual Co-operative Society, this did not imply that eligibility under section 80P(2) automatically flowed to assessee as the same had to be established. Further, accounts were not subjected to audit under section 44AB. All these aspects were not enquired into and no proper efforts were made to find out whether assessee was eligible for deduction under section 80P(2). Accordingly, invocation of jurisdiction under section 263 was valid and matter was remanded back to AO for decision afresh after making proper enquiry.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2013-14 & 2014-15

INCOME TAX ACT, 1961

Section 80P

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