The Assistant Comissioner of Income Tax, Circle-2, JAMNAGAR V. Porbandar Vibhagiya Nagarik Sahakari Bank Ltd., PORBANDAR

ITA 10/RJT/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1113 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: PARAG S GANATRA
• Keywords: Opportunity of being heard; Principle of natural justice; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI , ACCOUNTANT MEMBER . ITA. NO. 1 0 / RJT /20 14 (ASSESSMENT YEAR: 200 7 - 0 8 ) ASST. COMMISSIONER OF INCOME TAX, CIRC LE - 2, JAMNAGAR APPELLANT VS. PORBANDAR VIBHIGIYA NAGRIK SAHAKARI BANK LTD., KHADI GRAMODHYOG BHAVAN, OPP. SUDAMA CHOWK, PORBANDAR RESPONDENT & C.O. NO. 05 / RJT /20 14 (ASSESSMENT YEAR: 2007 - 08 ) PORBANDAR VIBHIGIYA NAGRIK SAHAKARI BANK LTD., KHADI GRAMODHYOG BHAVAN, OPP. SUDAMA CHOWK, PORBANDAR APPELLANT VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2, JAMNAGAR RESPONDENT I T A NO. 1 0/R / 14 & C.O. NO. 05/R/14, A.Y.07 - 08 [ ACIT VS. PORBANDAR V. N. S. BANK LTD. ] PAGE 2 PAN: AAAAP0857H / BY REVENUE : SHRI AVINASH KUMAR, D.R. / BY ASSESSEE : SHRI PARAG S. GANATRA , C.A. / DATE OF HEARING : 2 6 .0 5 .2015 / DATE OF PRONOUNCEMENT : 28 .0 5 .2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: SINCE, B OTH THESE REVENUE S APPEAL AND A SSESSEE S CROSS OBJECTION ARE ARISING OUT FROM THE SAME ORDER OF CIT(A), JAMNAGAR, DATED 21 .1 0 .20 13 FOR A.Y. 200 7 - 0 8, S O THEY ARE BEING DISPOSED OF BY COMMON ORDER FOR SAKE OF CONVENIENCE. 2. IN ITA NO. 1 0 / RJT /20 14 , REVENUE HAS FILED THE APPEAL ON THE FOL LOWING GROUND S : 1 THE LD. CIT(A) HAS ERRED ON THE FACTS AND LAW BY CANCELLING THE PENALTY U/S.271(1)(C) LEVIED BY THE A.O. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. ASSESSEE IS A CO - OPERATIVE BANK. IN THIS CASE ORIGINAL E - RETURN OF INCOME WAS FILED ON 31.03.2008 DECLARING LOSS OF RS.21,63,04 4/ - AND ASSESSMENT WAS COMPLETED ON TOTAL INCOME OF RS.29,77,980/ - IN WHICH VARIOUS ADDITIONS WERE MADE. I T A NO. 1 0/R / 14 & C.O. NO. 05/R/14, A.Y.07 - 08 [ ACIT VS. PORBANDAR V. N. S. BANK LTD. ] PAGE 3 DURING ASSESSMENT PROCEEDINGS, A REVISED COMPUTATION OF INCOME WAS ALSO FILED BY ASSESSEE ON 05.12.2009. SUBSEQUENTLY, PENALTY HAS BEEN LEVIED ON CON CEALED INCOME OF RS.37,09,305/ - WHICH INCLUDES VARIOUS ADDITIONS/DISALLOWANCES MADE AND CONFIRMED BY CIT(A). 3 . 1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE AND HAVING CONSIDERE D THE SAME, CIT(A) CANCELLED PENALTY BY OBSERVING THAT EXPLANATION GIVEN BY ASSESSEE APPEARS TO BE QUITE BONAFIDE AND IT HAS DISCLOSED ALL THE FACTS RELATED TO THE INCOME DUE TO FOLLOWING REASONS: - I. THIS WAS THE FIRST ASSESSMENT YEAR FROM WHICH DEDUCTION U/S.80P WAS WITHDRAWN IN CASE OF CO - OPERATIVE BANKS BY LEGISLATURE. MANY PERSONS WERE NOT AWARE OF THIS NEW PROVISION AND DID MISTAKES INCLUDING ASSESSEE. II. ASSESSEE COULD NOT FILE REVISED RETURN BECAUSE ORIGINAL RETURN ITSELF WAS FILED AFTER DUE DATE FOR FILING THE RETURN OF INCOME. HOWEVER, DURING ASSESSMENT PROCEEDINGS, ASSESSEE DID SUBMIT REVISED COMPUTATION IN WHICH IT OFFERED INCOME IN QUESTION. III. ASSESSEE HAS SUBMITTED THAT IN SUBSEQUENT ASSESSMENT YEARS IT HAS NOT DONE SIMILAR MISTAKES. I N VIEW OF ABOVE, PENALTY WAS DELETED BY CIT(A). 3 . 2 SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE INTER ALIA SUBMITTING THAT CIT(A) ERRED ON FACTS AND LAW BY I T A NO. 1 0/R / 14 & C.O. NO. 05/R/14, A.Y.07 - 08 [ ACIT VS. PORBANDAR V. N. S. BANK LTD. ] PAGE 4 CANCELLING PENALTY U/S.271(1)(C). ON OTHER HAND LEARNED AUTHORIZED REPRESENTATIVE SUPPORT ED THE ORDER OF CIT(A). 3 . 3 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT PENALTY HAS BEEN MADE ON ACCOUNT OF VARIOUS ADDITIONS AND DISALLOWANCES. HOWEVER, CIT(A) IN APPEAL HAS GRANTED RELIEF TO ASSESSEE BY OBSERVING THAT EXP LANATION FURNISHED BY ASSESSEE WAS BONAFIDE AND IT HAS DISCLOSED ALL FACTS RELATED TO INCOME. AS LEARNED AUTHORIZED REPRESENTATIVE COULD NOT MAKE OUT CASE OF ITS BONAFIDE CLAIM AND ITS CLAIM ON DISCLOSURE OF ALL RELATED FACTS . A CCORDING TO US, REASONING IN THE ORDER OF CIT(A) IS MISSING WHILE REACHING TO CERTAIN CONCLUSIONS WHICH IS ESSENTIAL PART OF ORDER. IN VIEW OF ABOVE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE ISSUE TO HIM WITH DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AFTER PROVIDIN G DUE OPPORTUNITY OF BEING HEARD TO ASSESSEE. SINCE WE ARE SETTING ASIDE THE ORDER ON PRELIMINARY ISSUE, SO WE ARE REFRAINING TO COMMENT ON MERIT OF ISSUE AT HAND. 4 . IN C.O. NO. 05 / RJT /20 14, ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUND S : 1) THAT THE PENALTY ORDER U/S.271(1)(C) OF THE ACT PASSED BY THE A.O. IS AGAINST THE RULE OF NATURAL JUSTICE AND WITHOUT CONSIDERING THE FACT AND CIRCUMSTANCES OF THE CASE. 2) THAT THE A.O. ERRED AND WAS NOT JUSTIFIED IN IMPOSING PENALTY U/S.271(1)(C) OF TH E ACT ON GROUND OF ADDITION CONFIRMED BY LD CIT(A) VIDE ORDER NO CIT(A)/JAM/09 - 10/796. 3) THAT IN ANY CIRCUMSTANCE PENALTY IMPOSED U/S.271(1)(C) OF THE ACT SHOULD NOT BE LEVIED AS THE EXPLANATION OFFERED BY US IS QUITE REASONABLE AND NOT FALSE AT ANY COUNT . I T A NO. 1 0/R / 14 & C.O. NO. 05/R/14, A.Y.07 - 08 [ ACIT VS. PORBANDAR V. N. S. BANK LTD. ] PAGE 5 4 . 1 FOR THE REASONS DISCUSSED ABOVE, ISSUE RAISED IN CROSS OBJECTION GOES ACADEMIC, HOWEVER ASSESSEE IS AT LIBERTY TO A GITATE THIS ISSUE BEFORE CIT(A) IN SETTING ASIDE PROCEEDING. 5 . AS A RESULT, APPEAL OF REVENUE AND CROSS OBJECTION OF ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF MA Y , 201 5 . SD/ - SD/ - (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT : DATED 28 /0 5 /2015 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, RAJKOT 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT