Asst. Commissioner of Income-tax, Dhule V. The Dhule District Central Co.op Bank, Dhule

ITA 1443/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9921 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 18-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: THROUGH
• Assessee Lawyers: S K SINGH
• Keywords: Bad and doubtful debts; Revised return
• Section: 27; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI R.K. PANDA, AM ITA NO. 1443 TO 1445/PN/2011 (ASSESSMENT YEAR: 2003-04 TO 2005-06) ASSTT. CIT CIR. 3(1) DHULE APPELLANT VS. THE DHULE DIST. CENTRAL CO-OP. BANK, SHIVAJI ROAD DHULE PAN AAAD1108K RESPONDENT APPELLANT BY: SHRI S.K. SINGH RESPONDENT BY: ASSESSEE THROUGH A.R. DATE OF HEARING: 12-11-2012 DATE OF PRONOUNCEMENT: 21-11-2012 ORDER PER SHAILENDRA KUMAR YADAV, JM THESE THREE APPEALS BY THE REVENUE ARE DIRECTED AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCO ME- TAX (APPEALS)-I NASIK DATED 12-9-2011 FOR A.Y. 200 3-04 TO 2005-06 DELETING PENALTY IMPOSED U/S 271(1)(C) OF T HE ACT. SINCE THE ISSUE RAISED IN ALL THESE APPEALS IS COMM ON, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 1443/PN/2011 FOR A.Y. 2003-04 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CO-OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BAN KING IN RURAL AREA OF DHULE DISTRICT. THE ASSESSEE HAS FILED RETURN OF INCOME ON 29-11-2003 DECLARING TOTAL INCO ME OF RS. NIL. THE LOSS CARRIED FORWARD BY THE ASSESSEE WAS 2 1443 TO 1445/PN/2011 DHULE DIST. CENTRAL CO-OP. BANK A.Y. 2003-04 TO 2005-06 RS. 26,41,53,324/-. THE A.O HAS NOTICED THAT THE ASSESSEE HAS DEBITED FOLLOWING PROVISIONS TO THE EX TENT OF RS. 19,62,93,000/- WHICH WERE NOT ADMISSIBLE EXPENDITURE UNDER THE PROVISIONS OF THE ACT. PARTICULARS AMOUNT RESERVE FOR BAD AND DOUBTFUL DEBTS 5,36,65,000/ - RESERVE FOR OVERDUE INTEREST 9,85,98,000/ - STAFF GRATUITY FUND 3,64,00,000/ - PROVISION FOR BONUS 76,00,000/ - THE A.O HAS THEREFORE, ISSUED AND SERVED NOTICE U/S 148 OF THE ACT ON 29-3-2010. IN RESPONSE TO THE SAID N OTICE ISSUED U/S 148 OF THE ACT, THE ASSESSEE HAS FILED R EVISED COMPUTATION OF INCOME, DISALLOWING THE ABOVE STATED PROVISIONS AND DECLARING LOSS CARRIED FORWARD AT RS . 7,30,78,829/-. THE AO HAS WORKED OUT THE DIFFERENC E BETWEEN CARRIED FORWARD LOSS IN ORIGINAL RETURN AND AS PER REVISED RETURN OF INCOME DECLARED IN RESPONSE TO NO TICE U/S 148 OF THE ACT AT RS. 189,10,74,495/- AND HAS IMPOSED PENALTY OF RS. 26,41,88,824/- U/S 271(1)(C) OF THE ACT. ON APPEAL, THE CIT(A) HAS CANCELLED THE IM PUGNED PENALTY. 3. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS D EBITED EXPENDITURE OF RS. 19,62,93,000/- AS PER GUIDELINES/DIRECTIONS OF RBI. THE EXPENDITURE IS I N THE NATURE OF PROVISION FOR BAD AND DOUBTFUL DEBTS, OVE RDUE INTEREST ON NPA LOAN ETC. HOWEVER, IN COMPUTATION O F INCOME, THE SAID PROVISIONS REMAINED TO BE DISALLOW ED BY 3 1443 TO 1445/PN/2011 DHULE DIST. CENTRAL CO-OP. BANK A.Y. 2003-04 TO 2005-06 THE ASSESSEE WHILE ARRIVING AT LOSS TO BE CARRIED F ORWARD AS PER THE PROVISIONS OF THE ACT. ON RECEIPT OF NOTICE U/S 148 OF THE ACT, THE ASSESSEE HAS DISALLOWED THE PROVISI ONS OF EXPENDITURE AND REDUCED THE LOSS CARRIED FORWARD BY RS. 19,10,74,995/-. AS PER THE PROVISION OF THE ACT, I T IS EVIDENT THAT FOR DECIDING THE ISSUE WHETHER PENALTY U/S 271(1)(C) IS ATTRACTED OR NOT, THERE HAS TO BE EITH ER CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. ON PERUSAL O F THE FACTS OF THE CASE, IT IS SEEN THAT THE ASSESSEE HAD FILED AUDITED PROFIT AND LOSS ACCOUNT WHEREIN THE CLAIM O F EXPENDITURE ON ACCOUNT OF PROVISIONS FOR BAD AND DO UBTFUL DEBTS, OVERDUE INTEREST ETC., HAVE BEEN CLEARLY REF LECTED. THE ASSESSEE HAS NOT CONCEALED PARTICULARS OF INCOM E OR HAS NOT FURNISHED INACCURATE PARTICULARS OF SUCH IN COME. THE ASSESSING OFFICER WAS NOT JUSTIFIED IN APPLYING EXPLANATION 4 TO SECTION 271(1)(C) OF THE ACT WHILE LEVYING THE IMPUGNED PENALTY. THE EXPLANATION 4 TO SEC. 27 1(1)(C) SAYS THAT WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND AS A RESULT OF WHICH, THE LOSS RETURNED HAS BEEN REDUCED THEN THE INCOME ON WHICH TAX SOUGHT TO BE EVADED IS THE AMOUNT FOR REDUCTION IN THE SAID LOSS. ADMITTEDLY, IN THE PRESENT CASE, THERE IS NO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND HENCE QUESTION FOR LEVYING PENALTY ON REDUCED ASSESSED LOSS COMPARED T O LOSS DECLARED IN ORIGINAL RETURN FILED DOES NOT ARISE. IN THIS VIEW OF THE MATTER, THE CIT(A) WAS JUSTIFIED IN CAN CELLING THE IMPUGNED PENALTY LEVIED U/S 271(1)(C) OF THE AC T. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A). 4 1443 TO 1445/PN/2011 DHULE DIST. CENTRAL CO-OP. BANK A.Y. 2003-04 TO 2005-06 ITA NO. 1444 AND 1445/PN/2011 FOR A.Y. 2004-05 & 2005-06 4. FOR THESE TWO YEARS, THE FACTS ARE IDENTICAL TO THOSE FOR A.Y. 2003-04. SO FOLLOWING THE REASONING GIVEN IN PRECEDING PARAGRAPHS, WE UPHOLD THE ORDERS OF THE C IT(A) FOR THESE TWO YEARS AS WELL. 5. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON ____ NOVEM BER 2012. (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: _____ NOVEMBER 2012 ANKAM COPY TO:- 1. ASSESSEE 2. DEPARTMENT 3. THE CIT (A) II PUNE 4. THE CIT II PUNE 5. THE D.R. B BENCH, I.T.A.T., PUNE. BY ORDER SR. P.S. I.T.A.T., PUNE