ING Vysya Bank Limited, Bangalore V. ACIT, Bangalore

ITA 1142/BANG/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57479 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-02-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 13-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FARAHAT HUSSAIN QURESHI
• Assessee Lawyers: S ANANTHAN
• Section: 263; 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BANGALORE BANGALORE BANGALORE BENCH BENCH BENCH BENCH B BB B BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N. N.N. N.BARAT BARAT BARAT BARATH HH HVAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT A AA AND NDND ND SMT. P.MADHAVI DEVI SMT. P.MADHAVI DEVI SMT. P.MADHAVI DEVI SMT. P.MADHAVI DEVI, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO.1142(BANG)/2010 (ASSESSMENT YEAR: 2004-05) M/S. ING VYSYA BANK LTD. ING VYSYA HOUSE, NO.22 , M.G. ROAD, BANGALORE. PAN: AABCT 0529M APPELLANT VS. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 11(4), BANGALORE. RESPONDENT APPELLANT BY: SHRI S.ANANTHAN. RESPONDENT BY : SHRI FARAHAT HUSSAIN QURESHI DATE OF HEARING: 08-02-2012 DATE OF PRONOUNCEMENT: 10-02-2012 O R D E R O R D E R O R D E R O R D E R PER PER PER PER N.BARATHVAJA SANKAR, VP: N.BARATHVAJA SANKAR, VP: N.BARATHVAJA SANKAR, VP: N.BARATHVAJA SANKAR, VP: THIS IS AN APPEAL PREFERRED BY THE ASSESSEE-M/S.ING VYSYA BANK LTD., FOR THE ASSESSMENT YEAR 2004-05 AG AINST THE APPELLATE ORDER DATED 30 TH JUNE 2010 OF THE CIT(A)-I, BANGALORE. 2. THE BRIEF FACTS ARE THAT FOR THE ASSESSMENT YEA R 2004- 05, THE ASSESSMENT ORDER WAS PASSED U/S 143(3) OF T HE INCOME- TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' ] ON 29-12-2006. THEREAFTER, THE CIT, U/S 263 OF THE ACT , DIRECTED THE ITA 1142(BANG)/2010 PAGE 2 OF 5 AO TO MAKE A FRESH ASSESSMENT AFTER EXAMINING THE I SSUES DISCUSSED IN PARAS.11 AND 12 OF THE 263 ORDER. IN PARA.11 OF THE 263 ORDER, THE CIT HAS OBSERVED AS UNDER: IT IS THEREFORE NECESSARY FOR THE ASSESSING OFFICE R TO EXAMINE THE SUBMISSIONS MADE BY THE ASSESSEE REGARDING THE NETTING OFF OF CLAIMS ETC. WITH REFER ENCE TO THE FACTS OF THE CASE AND TO ALLOW THE DEDUCTION S CLAIMED IN ACCORDANCE WITH LAW AFTER DULY TAKING IN TO CONSIDERATION THE PROVISO TO SECTION 36(1)(VII). SIMILARLY IN PARA.12, THE CIT HAS OBSERVED AS UNDER : IT IS NECESSARY FOR THE ASSESSING OFFICER TO VERIF Y THE SUBMISSIONS MADE BY THE ASSESSEE IN THIS REGARD AS DISCUSSED ABOVE, WITH REFERENCE TO THE FACTS OF THE CASE AND ASCERTAIN WITH A PROPER BASIS, THE DISALLOWANCE REQUIRED TO BE MADE US 14A IN ACCORDANCE WITH THE LAW. SUBSEQUENTLY, THE AO GAVE EFFECT TO THE ORDER PASSE D U/S 263 BY THE CIT IN WHICH HE HAS MADE THE FOLLOWING DISAL LOWANCES: (I) `25,89,19,631/- WAS DISALLOWED U/S 36(1)(VI IA) OF THE ACT, (II) DISALLOWANCE U/S 14A IN A SUM OF `1,14,72, 497/-. ALSO, THE AO LEVIED INTEREST U/SS.234B AND 234D OF THE ACT. 3. AGGRIEVED, THE ASSESSEE MOVED THE MATTER IN APPE AL BEFORE THE FIRST APPELLATE AUTHORITY WITH THESE ISS UES. HOWEVER, THE FIRST APPELLATE AUTHORITY DISMISSED THE ASSESSE ES APPEAL WITHOUT DEALING WITH THE MERITS OF THE ISSUES RAISE D BEFORE HIM. THE CIT(A) WAS OF THE VIEW THAT THE ASSESSEE HAS NO T FILED ANY APPEAL AGAINST THE ORDER U/S 263 PASSED BY THE CIT, BANGALORE- 1, BEFORE THE ITAT. ACCORDING TO HIM, SINCE THE GR OUNDS OF APPEAL ARE ON SAME ISSUE, WHEREUPON THE CIT HAD REV ISED THE ORDER, HE WAS DEBARRED FROM VENTURING INTO THE MERI TS OF THE GROUNDS OF APPEAL. HENCE, HE CONSIDERED THE APPEAL AS ITA 1142(BANG)/2010 PAGE 3 OF 5 INFRUCTUOUS AND DISMISSED THE APPEAL. STILL AGGRIE VED, THE ASSESSEE IS ON SECOND APPEAL BEFORE US AGAINST THIS ORDER. 4. BEFORE US, LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE CIT, IN THE ORDER U/S 263, DIRECTED THE AO TO VERIFY THE FACTS IN RES PECT OF THE ISSUES RAISED THEREIN AND THEREAFTER PASS AN ORDER. HE OUGHT TO HAVE APPRECIATED THAT ONLY AFTER CARRYING OUT A THO ROUGH ASSESSMENT, AS DIRECTED BY THE CIT, THE AO PASSED T HE ORDER U/S 143(3) R.W.S 263. HE ALSO RELIED ON THE FOLLOWING DECISIONS: A) DCIT VS. CATHOLIC SYRIAN BANK (ITA NOS.380 & 590/ COCH/1993, 427/COCH/1994 AND 329/COCH/1996 DT.9-8-2002), B) SYNDICATE BANK VS. DCIT (2001) 78 ITD 103, C)) AZHIMALA BECH RESORTS PVT.LTD. VS. CIT (2010) 325 ITR 419(KER), D) SAKAR PATAL VIBHAG JUNGLE KAMDARD SAHAKARI MANDLI LTD. VS. ITO (1991) 39 TTJ 54 (AHD), E) ITO VS. SUSEELARAM ENTERPRISES (2002) 83 ITD 372(HYD), F) ITO VS. UMA KANT NEWATIA (2005) 97 ITD 414(KOL), AND G) SADHURAM PATEL & SONS VS. ITO (2009) 120 ITD 291 (MUM) PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE WAS OF THE VIEW THAT THE ORDER U/S 263 WAS NOT A OPEN REMA ND BUT SPECIFIC DIRECTIONS WERE GIVEN IN PARAS.11 AND 12 O F THE SAID ORDER AND HENCE, THE CIT(A) WAS RIGHT IN CONCLUDING THAT HE CANNOT GO INTO THE MERITS OF THE ISSUES RAISED WHIC H WERE ITA 1142(BANG)/2010 PAGE 4 OF 5 ALREADY DEALT WITH BY THE EQUAL RANKING OFFICER VIZ ., CIT, BANGALORE-I. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDE RED THE FACTS AND MATERIALS ON RECORD INCLUDING THE CAS E-LAWS RELIED UPON BY THE LEARNED AR. IN OUR CONSIDERED OPINION, THE ORDER OF THE CIT PASSED U/S 263 IS OPEN REMAND TO THE AO WIT H A DIRECTION TO DECIDE THE ISSUES IN ACCORDANCE WITH L AW AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE. IN SUCH A C ASE, IT CANNOT BE SAID THAT THE ORDER OF THE CIT PASSED U/S 263 HA D DEALT WITH THE ISSUE ON MERITS. HENCE, THE CIT(A) OUGHT TO HA VE DEALT WITH THE MERITS OF THE GROUNDS RAISED BEFORE HIM INSTEAD OF DISMISSING THE SAME AS INFRUCTUOUS. HENCE, WE REST ORE THIS APPEAL TO THE FILE OF THE CIT(A) WITH A DIRECTION T O DECIDE THE GROUNDS RAISED BEFORE HIM ON MERITS, OF COURSE AFTE R GIVING EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO HEREBY DIRECTED TO CO-OPERATE WITH THE CIT( A) BY PROVIDING NECESSARY DETAILS THAT WOULD BE SOUGHT FO R BY THE CIT(A) FOR DECIDING THE APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY, 2012. SD/- SD/- ( (( (SMT. P.MADHAVI DEVI SMT. P.MADHAVI DEVI SMT. P.MADHAVI DEVI SMT. P.MADHAVI DEVI) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER (N.BHARAT (N.BHARAT (N.BHARAT (N.BHARATH HH HVAJA SANKAR) VAJA SANKAR) VAJA SANKAR) VAJA SANKAR) VICE VICE VICE VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT EKS ITA 1142(BANG)/2010 PAGE 5 OF 5 COPY TO : COPY TO : COPY TO : COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE