Assessee is a cooperative society and had filed its return of income declaring its total income as Nil. The assessment under section 143(3) was framed by the AO and the returned income of the assesses was accepted.

Subsequently, PCIT made revision on the ground that the assessee had during the year shown interest income from FDs with Co-operative Banks, against which it had claimed deduction under section 80P(2)(d) of the Act which was allowed in the assessment proceedings.  Observing, that as co-operative banks were commercial banks and not a co-operative society, PCIT was of the view that the assessee was not eligible for claim of deduction under section 80P(2)(d) of the Act.

On appeal, Tribunal held that though the co-operative banks pursuant to the insertion of subsection (4) to section 80P would no more be entitled for claim of deduction under section 80P of the Act, but as a co-operative bank continues to be a co-operative society registered under the law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under section 80P(2)(d) of the Act.

With regard to validity of revisionary proceedings, Tribunal held that while framing the assessment, AO had taken a possible view, and then allowed the deduction. Further, the aforesaid view taken by the A.O at the time of framing of the assessment was clearly supported by the order of the jurisdictional Tribunal in the case of Land and Cooperative Housing Society Ltd. v. ITO (2017) 46 CCH 52 (Mum) (Trib). Accordingly, Tribunal quashed the revisionary proceedings.   (AY. 2014 15)