The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has invalidated a revision order issued by the Principal Commissioner of Income Tax (PCIT), which directed the Assessing Officer (AO) to grant an 80P deduction without a proper claim.
In the case, the National e-assessment Centre, Delhi, issued an assessment order under Section 143(3) read with section 144B of the Income Act, 1961 for the assessment year 2018-19 on 19th April 2021, assessing a total income of Rs. Nil. Upon reviewing the assessment records, the PCIT noted that the assessee had received interest income from various banks, including cooperative banks, amounting to Rs. 1,54,05,705/-.
The PCIT pointed out that, according to the provisions of Section 80P (2)(d) of the Income Tax Act, the deduction under Section 80P was not allowable on income received from banks, including cooperative banks.
The two-member bench of the tribunal, consisting of George George K (Vice President) and Chandra Poojari (Accountant Member), observed that the PCIT, without recognizing that the assessee was not claiming deduction under Section 80P(2)(a)(i) or 80P(2)(d) of the Income Tax Act on the income shown in Schedule 7, directed the AO not to grant deduction under Section 80P(2)(a)(i) & 80P(2)(d) of the Income Tax Act for the income of Rs. 1,54,05,706/-, which was shown as “income from other sources” by the assessee in Schedule 7 of the computation of income.
Furthermore, the order passed by the AO vide order dated 19th April 2021 was not prejudicial, so far as erroneous to the interest of revenue, when there was no claim by the assessee under Section 80P(2)(a)(i) or 80P(2)(d) of the Income Tax Act in respect of income shown by the assessee in Schedule 7.
Accordingly, the ITAT annulled the revision order passed by the PCIT under Section 263 of the Income Tax Act. As a result, the appeal of the assessee was allowed.
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