The ACIT Circle -9(1), Hyderabad V. Deccan Grameena Bank, Hyderabad

ITA 1120/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66317 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 09-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GNANAPRAKASH
• Assessee Lawyers: T UMAKANTH
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1120/HYD/2011 ASSESSMENT YEAR : 2007-08 THE ASST. COMMISSIONER OF INCOME-TAX, APPELLANT CIRCLE 9(1), HYDERABAD VS. DECCAN GRAMEENA BANK, RESPONDENT HYDERABAD (PAN AAAAD3893) APPELLANT BY : SHRI K. GNANA PRAKASH RESPONDENT BY : SHRI T. UMAKANTH DATE OF HEARING : 24/09/2012 DATE OF PRONOUNCEMENT : 05/10/ 2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF CIT(A), VIJAYAWADA DATED 27/03/2011 FOR THE ASSE SSMENT YEAR 2007-08. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE, A REGIONAL RURAL BANK, FILED ITS RETURN OF INCOME DECLARING LO SS OF RS. 25,60,86,492/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) WAS ISSUED AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT DEMANDING TAX OF RS. 10,21,54,906/-. WHILE COMPLETING THE 2 ITA NO. 1120/HYD/2011 DECCAN GRAMEENA BANK ASSESSMENT, THE ASSESSEE WAS ASSESSED AT AN INCOME OF RS. 25,73,45,508/- AFTER RESTRICTING THE ASSESSEES CLA IM OF DEDUCTION OF RS. 53,56,58,590/- U/S 36(1)(VIIA) OF THE ACT TO RS . 2,22,26,590/-. 3. THE DISALLOWANCE OF THE CLAIM OF DEDUCTION OF RS . 51,34,32,000/- BEING 10% OF AGGREGATE AVERAGE RURAL ADVANCES WAS APPEALED BY THE ASSESSEE BEFORE THE CIT(A). 4. BEFORE THE CIT(A), THE LEARNED AR OF THE ASSESSE E FILED A PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A WHICH WAS FORWARDED TO THE AO FOR COMMENTS ON ADMISSIBILI TY AND ON THE SUBMISSIONS MADE THEREIN. THE REMAND REPORT OF THE AO DATED 03/03/2011 WAS MADE AVAILABLE TO THE ASSESSEE FOR I TS FURTHER COMMENTS, AND THE REPLY FROM THE ASSESSEE RECEIVED VIDE LETTER DATED 16/03/2011. IT WAS SUBMITTED BY THE AR OF TH E ASSESSEE THAT THE CLAIM OF 10% DEDUCTION ON RURAL ADVANCES WAS RE JECTED BY THE AO ON THE GROUND THAT THE PARTICULARS OF ADVANCES W ERE NOT FURNISHED IN THE MANNER PRESCRIBED IN RULE 6ABA OF THE INCOME TAX RULES. 5. IN THE REMAND REPORT THE AO HAD OBSERVED THAT TH E INFORMATION AND ADDITIONAL EVIDENCE FILED BY THE ASSESSEE DURIN G THE APPEAL PROCEEDINGS WAS FOUND TO BE IN ORDER AND IN ACCORDA NCE WITH THE MANNER LAID DOWN IN RULE 6ABA OF THE INCOME TAX RUL ES. HOWEVER, THE AO WAS OF THE VIEW THAT THE ADDITIONAL EVIDENCE BEING FILED WAS NOT ADMISSIBLE AS THE BRANCH-WISE INFORMATION AS RE QUIRED UNDER THE RELEVANT RULE WAS NOT FILED DURING THE ASSESSMENT P ROCEEDINGS. 3 ITA NO. 1120/HYD/2011 DECCAN GRAMEENA BANK 6. THE CIT(A) OBSERVED THAT THE ONLY DIFFERENCE IN THE INFORMATION FILED NOW IS THAT THE PARTICULARS OF ADVANCES HAVE BEEN GIVEN BRANCH-WISE WHEREAS ORIGINALLY THE DETAILS WERE FIL ED REGIONWISE. HOWEVER, THE QUANTUM OF THE CLAIM OF DEDUCTION U/S 36(1)(VIIA)(A) HAS NOT UNDERGONE ANY CHANGE. IN OTHER WORDS, THE C LAIM OF DEDUCTION U/S 36(1)(VII)(A) IS SUPPORTED BY THE INF ORMATION FILED EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE APPEAL PROCEEDINGS. THE ONLY DEFICIENCY, IF ANY, WOULD BE THAT THE DETAILED INFORMATION OF ADVANCES BRANCHWISE WAS NOT FILED IN THE MANNER LAID DOWN UNDER THE INCOME TAX RULES EVEN THOUGH THE QUA NTUM OF CLAIM IS NOT AT VARIANCE. THE CIT(A) FURTHER OBSER VED THAT NON- SUBMISSION OF THE REQUIRED INFORMATION AS PER THE P RESCRIBED FORMAT IS NOT FATAL AND THE SAME INFORMATION HAS BEEN FILE D DURING THE APPELLATE PROCEEDINGS BEFORE HIM BY THE ASSESSEE IN THE MANNER PRESCRIBED, WHICH HAS ESTABLISHED THE GENUINENESS O F THE ASSESSEE, THEREFORE, THE ASSESSEE SHOULD BE EXCUSED FOR PROCE DURAL DEFAULT. ACCORDINGLY, THE CIT(A) DIRECTED THE AO TO MODIFY T HE ASSESSMENT ORDER BY ALLOWING THE CLAIM MADE U/S 36(1)(VIIA)(A) IN RESPECT OF RURAL ADVANCES. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) ERRED IN ADMITTING THE ADDITIONAL EVI DENCE U/S 46A THOUGH THE SAME WAS OBJECTED TO BY THE AO IN TH E APPELLATE PROCEEDINGS. 2. THE CIT(A) BY-PASSED THE PROCEDURE LAID DOWN U/S 250(4) IN DIRECTING THE AO TO CONDUCT CERTAIN ENQUIRIES IN TH E MATTER. 3. WHETHER CIT(A) WAS CORRECT IN GIVING DIRECTION T O AO WITHOUT PASSING ORDER U/S 250(4) TO CONDUCT ENQUIRIES IN TH E MATTER CONCERNED. 4 ITA NO. 1120/HYD/2011 DECCAN GRAMEENA BANK 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECO RD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LE ARNED COUNSEL FOR THE ASSESSEE SHRI T. UMAKANTH INVITED OUR ATTENTION TO THE CORRESPONDENCE MADE FOR THE CURRENT YEAR WITH RESPE CT TO THE ADMISSION OF ADDITIONAL GROUND. AT PAGE 5 OF THE PA PER BOOK FILED BY THE ASSESSEE, WE FIND THAT THE LETTER WRITTEN BY TH E AO TO THE CIT(A) SUBMITTING THE REMAND REPORT WHEREIN THE AO HELD TH AT EVEN THOUGH INFORMATION FILED BY THE ASSESSEE BEFORE THE CIT(A) IS FOUND TO BE IN ORDER AND IN ACCORDANCE WITH THE MANNER LAID DOW N IN RULE 6ABA OF THE IT RULES, THE ASSESSEE DID NOT PRODUCE THE B RANCH-WISE INFORMATION AS REQUIRED U/S RULE 6ABA DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, THOUGH IT WAS CALLED FOR. A S RIGHTLY OBSERVED BY THE CIT(A) THAT THE ASSESSEE HAS FURNIS HED REGION WISE ADVANCES BEFORE THE AO, WHICH DEALS WITH THE ADDITI ONAL INFORMATION SHOWING THE BRANCH-WISE RURAL ADVANCES FILED BEFORE THE CIT(A). HOWEVER, THE FACT REMAINS THAT THE ASSESSEE FAILED TO FURNISH BRANCH-WISE INFORMATION AS REQUIRED UNDER RULE 6ABA OF THE IT RULES DURING THE COURSE OF ASSESSMENT PROCEEDINGS B Y INADVERTENCE. IN SHORT, CONSOLIDATED PARTICULARS OF RURAL ADVANCE S WERE FILED WHEREAS BRANCH-WISE PARTICULARS AS REQUIRED UNDER R ULE 6ABA OF THE IT RULES WERE NOT FURNISHED BY THE ASSESSEE BEFORE THE AO, WHICH HE RECTIFIED AND FURNISHED THE BRANCH-WISE PARTICULARS BEFORE THE CIT(A). WE ARE OF THE VIEW THAT THIS DEFICIENCY BEI NG A PROCEDURAL DEFECT CAN BE OVERCOME BY ADMISSION OF ADDITIONAL E VIDENCE BEFORE THE CIT(A). THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN ALLOWING THE APPEAL OF THE ASSESSEE A ND WE CONFIRM THE ORDER OF THE CIT(A) DISMISSING THE GROUNDS OF A PPEAL OF THE REVENUE. 5 ITA NO. 1120/HYD/2011 DECCAN GRAMEENA BANK 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 5 TH OCTOBER, 2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAY ARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 5 TH OCTOBER, 2012 KV COPY TO:- 1) ACIT, CIRCLE 9(1), HYDERABAD 2) DECCAN GRAMEENA BANK, D.NO. 9-27/1, LALITHA NAGAR, DILSUKHNAGAR, HYDERABAD 3) THE CIT (A), VIJAYAWADA 4) THE CIT-VI, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD