Jila Sahkari Kendriya Bank Mydt., V. ACIT,

ITA 13/JAB/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5662 (ITAT-JABALPUR)
• Duration Of Justice: 5 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-04-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 22-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D R LATHORIYA
• Assessee Lawyers: SSH A P SRIVASTAVA KNG PILLAI
• Keywords: Opportunity of being heard; Bad and doubtful debts
• Section: 143(3)

Judgement Text

1 I.T.A. NO.13/JAB/2011 (ASSESSMENT YEAR :2007-08 ) IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BEFORE S/SHRI N.S. SAINI (AM) N. K. CHOUDHRY (JM ) I.T.A. NO.13/JAB/2011 (ASSESSMENT YEAR :2007-08 ) JILA SAHAKARI KENDRIYA BANK MARYADIT, COLLEGE ROAD, PANNA (M.P. VS. ACIT, CIRCLE, SATNA PAN/GIR NO. : AAATJ 5020 F ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : S/SH. A.P.SRIVASTAVA, KNG PILLAI & SAPAN USRETHE RESPONDENT BY : SH. D.R.LATHORIYA DATE OF HEARING : 06-04-2016 DATE OF PRONOUNCEMENT : 06-04. 2016 O R D E R PER NARENDRA KUMAR CHOUDHRY, JM THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM A N ORDER OF THE LD CIT(A)- II, JABALPUR DATED 24.11.2010, IN THE MATTER OF ASSESSM ENT UNDER SECTION 143(3) OF THE I.T.ACT, 1961, FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING REVISED GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDERS OF THE AUTHORITIES BELOW ARE ILLEGAL AND BAD-IN-LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE ID. CLT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS.2,05,12,000/- BEING PROVISIONS FOR DOUBTFUL DEBTS, E TC. WITHOUT APPRECIATING THE FACT THAT THE APPELLANT CO-OPERATIVE BANK IS ENTITLED FOR DEDUCTIONS UNDER SECTION 36(1)(VIIA) OF THE ACT W.E.F. 01.04.2007. 2 I.T.A. NO.13/JAB/2011 (ASSESSMENT YEAR :2007-08 ) 3. THAT THE AUTHORITIES BELOW FAILED TO APPRECIATE T HAT THE BENEFIT HITHERTO AVAILABLE TO THE APPELLANT UNDER SECTION SOP WAS WITHD RAWN WITH EFFECT FROM 01.04.2007 AND THE APPELLANT WAS THEREFORE, ENT ITLED FOR DEDUCTION AVAILABLE UNDER SECTION 36(1)(VIIA) OF THE ACT. 4.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID. A.O. WAS NOT JUSTIFIED IN MAKING THE DISALLOWANCE OF RS.43,29,467 /- U/S 40(A)(IA) OF THE ACT, BEING 20% OF INTEREST DEBITED TO PROFIT AND LOSS ACCOUNT AT RS.2,16,47,334/- FOR ALLEGED FAILURE ON THE PART OF THE APPELLANT CO- OPERATIVE BANK TO DEDUCT TAX AT SOURCE FROM INTEREST ON FDRS. 5.THAT THE ID, A.O. OUGHT TO HAVE APPRECIATED THAT A LARGE NUMBER OF INDIVIDUAL PAYMENT OF INTEREST ON FDRS WERE MUCH BELOW THE THRESHOLD LIMIT OF RS.10,000/-AND THEREFORE, IT WAS NOT INCUMBEN T ON THE PART OF THE APPELLANT BANK TO OBTAIN FORM NO. 15G/15H FROM SUCH CUSTOMERS/DEPOSITORS AND IN THAT CASE, THE APPELLANT COU LD NOT BE PENALIZED FOR NON SUBMISSION OF 15G/15H FORMS. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE ID. A.O. WAS NOT JUSTIFIED IN MAKING THE DISALLOWANCE OF RS.43,29, 467/- U/S 40(A)(IA) OF THE ACT. 7. THAT THE ID. A.O. FAILED TO APPRECIATE THAT AS PER PROVISIONS OF SECTION 194A(3)(I)(B) OF THE I.T. ACT, THE APPELLANT BEING A CO-OPERATIVE SOCIETY ENGAGED IN CARRYING ON BUSINESS OF BANKING WAS NOT REQUIR ED TO DEDUCT TAX AT SOURCE WHERE PAYMENT OF INTEREST DID NOT EXCEED RS.1 0,000/-, IRRESPECTIVE OF THE FACT WHETHER DECLARATIONS U/S 15G W ERE OBTAINED OR NOT. 3. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND, WH ICH READS AS UNDER: THE AO WAS NOT JUSTIFIED IN MAKING DISALLOWANCE OF RS.43,29,467/- U/S.40(A)(IA) BEING 20% OF INTEREST DEB ITED TO PROFIT AND LOSS ACCOUNT WITHOUT APPRECIATING THAT INTE REST ON FDRS PAID TO DIFFERENT PERSONS ARE BELOW RS.10,000/- A ND IT DOES NOT REQUIRE TO OBTAIN FORM 15G AND 15H. 4. ON GOING THROUGH THE APPEAL FILE, WE OBSERVE THAT THE APPEAL IS FILED LATE BY 10 DAYS. AT THE TIME OF HEARING, LD COUNSEL FOR THE ASSESSE E FILED AN AFFIDAVIT, WHEREIN, IT IS STATED THAT ALTHOUGH THE FILE WAS ENTRUSTED TO THE AD VOCATE ON TIME BUT DUE TO SOME DEFICIENCY REGARDING NON-DEPOSIT OF REQUISITE APPEAL FE E, THE MATTER WAS IMMEDIATELY 3 I.T.A. NO.13/JAB/2011 (ASSESSMENT YEAR :2007-08 ) TAKEN UP THROUGH ITS COUNSEL AND COPY OF CHALLAN IN SU PPORT OF DEPOSIT OF RS.10,000/- WAS FILED ON 22.2.2011, THEREFORE, IN THE PROCESS THERE WAS DELAY OF 10 DAYS. IT WAS REQUESTED TO CONDONE THE DELAY IN FILING THE APPEAL. 5. HAVING CONSIDERED THE SUBMISSION AND ALSO THE AFFIDAVI T FILED BEFORE US, WE CONDONE THE DELAY IN FILING THE APPEAL FOLLOWING TH E DECISION THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF GANGA SAHAI RAM SWARUP AND ANOTHER VS. ITAT, 271 ITR 512 (ALL), WHEREIN, IT HAS BEEN HELD THAT THE DELAY OF S HORT PERIOD SHOULD BE CONDONED BECAUSE THE ASSESSEE WAS NOT GOING TO GAIN ANYTHING OUT OF IT. 6. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE PRESS FOR AD MISSION OF ADDITIONAL GROUND TAKEN BEFORE THE TRIBUNAL FOR THE FIRST TIME. HE SUBMITTED THAT THE AO HAS MADE AN ADDITION OF RS.43,29,467/- U/S.40(A)(IA) OF THE ACT , AS THE TAX WAS NOT DEDUCTED AT SOURCE ON THE PAYMENT OF INTEREST TO VARIOUS PERSONS AND DUE TO OVERSIGHT, THIS GROUND WAS NOT TAKEN BEFORE THE LD CIT(A), THEREFORE, THE LD CIT(A) DID NOT ADJUDICATE THIS GROUND. HE SUBMITTED THAT SINCE THIS ISSUE GOES TO THE ROOT OF THE JURISDICTION AND DOES NOT REQUIRE FACTUAL VERIFICATION, THE ADDITIONAL GROU ND MAY BE ADMITTED. 7. ON THE OTHER HAND, LD D.R. OBJECTED TO ADMISSION OF ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE IN THE APPEAL AT THIS STAGE AS THE SAME WAS NOT RAISED BEFORE THE AUTHORITIES BELOW. 4 I.T.A. NO.13/JAB/2011 (ASSESSMENT YEAR :2007-08 ) 8. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS OF THE PARTIES. AS THE ADDITIONAL GROUND OF APPEAL GOES INTO THE ROOT OF THE MATTER AND NO ENQUIRY WITH REGARD TO FACT IS REQUIRED TO BE VERIFIE D, WE ADMIT THE ADDITIONAL GROUND IN VIEW OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF NTPC LTD VS CIT REPORTED IN 229 ITR 383 (SC). WE ALSO OBSERVE THAT SINCE THI S ISSUE HAS NOT BEEN ADJUDICATED BY LD CIT(A) IN THE IMPUGNED ORDER, IN THE INTEREST OF JUSTICE, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE LD CIT(A) WITH A DIRECTION TO ADJUDI CATE THIS ISSUE IN ACCORDANCE WITH LAW AND AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 9. SINCE WE HAVE RESTORED THE ISSUE OF ADDITION OF RS.43 ,29,467/- U/S.40(A)(IA) OF THE ACT, TAKEN IN THE ADDITIONAL GROUNDS TO THE FILE OF THE LD CIT(A) FOR HIS DECISION ON MERITS, ALL OTHER GROUNDS TAKEN BY THE ASSESSEE WHICH ARE AKIN TO THE ADDITIONAL GROUND HAVE BECOME REDUNDANT AT THIS STAGE AND ACCORDINGLY, SA ME ARE RESTORED TO THE FILE OF LD CIT(A) FOR FRESH ADJUDICATION. 10. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 /4/2016 . SD/- SD/- (N.S.SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER JABALPUR, DATED 6 / 4/2016 PARIDA , SR. PS 5 I.T.A. NO.13/JAB/2011 (ASSESSMENT YEAR :2007-08 ) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT : JILA SAHAKARI KENDRIYA BANK MARYADIT, COLLEGE ROAD, PANNA (M.P. 2. THE RESPONDENT: ACIT, CIRCLE, SATNA 3. THE CIT(A). JABALPUR 4. CIT . JABALPUR 5. DR, ITAT, JABALPUR 6. GUARD FILE. BY ORDER, //TRUE COPY// SR. PS, ITA T, CAMP: JABALP UR