ITO, Nashik V. Ganesh Sahakari Bank Ltd., Nashik

ITA 1585/PUN/2012

• Counselvise Citation: 158524514 RSA 2012
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 26-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Reasonable cause; Condonation of delay
• Section: 143(3); 72(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1 585 / P N/ 20 1 2 ASSESSMENT YEAR : 200 9 - 10 INCOME TAX OFFICER, WARD - 1 ( 1 ), NASH IK VS. GANESH SAH AKARI BANK LTD., SANCHETI TOWERS, OPP. CIRCLE CINEMA, ASHOK STAMBH, NASHIK (APPELLANT) (RESPONDENT) PAN NO. AAAG1860H APPELLANT BY: SHRI S.P. WALIMBE RESPONDENT BY: SHRI PRAMOD SHINGTE DATE OF HEARING : 05 - 03 - 2014 DATE OF PRON OUNCEMENT : 21 - 03 - 2014 ORDER P ER R.S. PADVEKAR , JM : - THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A) - I , NASHIK DATED 10 - 05 - 2012 FOR THE A.Y. 200 9 - 10. THE GROUND NO. 1 READS AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) - I, NASHIK WAS JUSTIFIED IN ALLOWING THE CARRY FORWARD OF LOSS TO THE TUNE OF RS.24,65,698/ - . 2. THE FACTS PERTAINING TO THE GROUND NO. 1 ARE AS UNDER. THE ASSESSEE IS A CO - OPERATIVE SOCIET Y ENGAGED IN THE BUSINESS OF B ANKING. THE ASSESSEE BANK IS REGISTERED UNDER THE CO - OPERATIVE SOCIETY ACT. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 2009 - 10 IN WHICH THE ASSESSEE HAS CLAIMED THE SET OFF OF THE BROUGHT FORWARD LOSSES OF RS.24,65 ,698/ - . AS NOTED BY THE ASSESSING OFFICER, T HE ASSESSEE HAS SHOWN CARRY FORWARD LOSSES OF RS.1,16,78,607/ - PERTAINING TO THE A.Y. 2008 - 09. IN THIS CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE BANK HAS 2 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK FILED THE RETURN OF LOSS FOR THE A .Y. 2008 - 09 ON 18 - 1 2 - 2008 WHEN THE DUE DATE FOR FILING OF RETURN U/S. 139(3) R.W.S. 13 9 (1) WAS 31 - 10 - 2008. THE LOSS CLAIMED BY THE ASSESSEE WAS UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSION IN SHORT IT WAS THE BUSINESS LOSS. THE ASSESSING OFFICER HAS HELD THA T THE CLAIM OF THE ASSESSEE IN RESPECT OF BROUGHT FORWARD LOSS U/S. 72(1) OF THE INCOME - TAX ACT FOR THE A.Y. 2008 - 09 TO SET OFF TO THE EXTENT OF RS.24,65,698/ - AGAINST THE INCOME FOR THE A.Y. 2008 - 09 CANNOT BE ALLOWED. HE ACCORDINGLY DISALLOWED THE LOSS O F RS.24,65,698/ - SET OFF OF AGAINST THE INCOME FOR THE A.Y. 200 9 - 10 AND TO THAT EXTENT THE INCOME WAS ENHANCED. 3. THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A) THE ASSESSEE PLEADED THAT THE ASSESSEE BANK IS HAVING THE DUA L CONTROL I.E. A CO - OPERATIVE DEPARTMENT AS WELL AS RBI AND STATUTORY AUDITOR IS APPOINTED BY THE CO - OPERATIVE DEPARTMENT OF RESPECTIVE STATE. THE ASSESSEE ALSO CLAIMED THAT THE LATE FILING OF THE RETURN OF LOSS FOR THE A.Y. 2008 - 09 WAS NOT DELIBERATE THA T BUT AS THERE WAS DELAY IN APPOINTMENT OF THE STATUTORY AUDITOR BY THE COMMISSIONER OF CO - OPERATIVE SOCIETIES AND THE STATUTORY AUDITOR GAVE HIS AUDIT REPORT ON 05 - 12 - 2008. IN SUM AND SUBSTANCE THE PLEA OF THE ASSESSEE BEFORE THE LD. CIT(A) WAS THAT THER E WAS NO CONTROL OF THE ASSESSEE ON THE APPOINTMENT OF THE STATUTORY AUDITOR AND AS THE AUDIT OF THE ASSESSE E BANK WAS TO BE DONE BY THE STATUTORY AUDITOR , T HE ASSESSEE BANK WAS HELPLESS AND THERE WAS A DELAY IN RECEIVING THE AUDIT REPORT BEYOND THE DUE DA TE FOR FILING OF THE RETURN OF LOSS U/S. 139(3) R.W.S. 139(1) FOR WHICH THE ASSESSEE HAS NO ROLE TO PLAY. THE LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE ALLOWED THE SET OFF OF THE BROUGHT FORWARD LOSS PERTAINING TO A.Y. 2008 - 09 TO THE EXTENT OF RS .24,65,698/ - . THE OPERATIVE PART OF THE FINDINGS OF THE LD. CIT(A) IS AS UNDER: 5.5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE RIVAL CONTENTIONS. DURING THE COURSE OF 3 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT THE APPELLANT HAS CLAIMED SET OF LOSS OF RS.24,65,698/ - IN RESPECT OF A.Y. 2008 - 09. THE AO NOTICED THAT THE APPELLANT FILED THE RETURN OF INCOME FOR A.Y. 2008 - 09 ON 18/12/2008 DECLARING LOSS OF RS.1,16,78,607/ - AND THE DUE DATE FOR FILING THE RETUR N WAS 31/10/2008, HE THEREFORE, DID NOT ALLOW THE BENEFIT OF C/F LOSS OF THAT YEAR IN THE ASSESSMENT YEAR UNDER APPEAL. THE ID. A.R. OF THE APPELLANT CONTENDED THAT THE CARRY FORWARD LOSS OF RS.24,65,698/ - FROM A.Y. 2008 - 09 MAY BE ALLOWED TO BE SET OFF DUR ING THE A.Y. 2009 - 10, IN SUPPORT OF HIS CONTENTION, THE ID. A.R. HAS RELIED ON THE DECISION IN THE CASE OF CIT VS. KULU VALLEY TRANSPORT CO. PVT. LTD. 77 ITR 518 (SC) WHERE IT IS HELD THAT WHERE RETURN DISCLOSING LOSS WAS FILED VOLUNTARILY BEYOND TIME FIXE D IN GENERAL NOTICE U/S 22(1) OF 1922 ACT, BUT BEFORE COMPLETION OF ASSESSMENT IT MUST BE CONSIDERED AS HAVING BEEN FILED WITHIN TIME PRESCRIBED U/S 22(3) OF 1922 ACT AND, THEREFORE, LOSS RETURNED BY ASSESSEE HAD TO BE DETERMINED AND CARRIED FORWARD. IN TH E INSTANT CASE THE RETURN FOR A.Y. 2008 - 09 WAS FILED VOLUNTARILY ON 18/12/2008 INSTEAD OF WITHIN THE DUE DATE I.E. 31/10/2008 AND NO ASSESSMENT U/S 143(3) WAS MADE ON THAT RETURN. THE ASSESSEE IS A CO - OPERATIVE BANK AND UNDER THE MAHARASHTRA CO - OP SOCIETIE S ACT WAS REQUIRED TO GET ITS ACCOUNT AUDITED BY A STATUTORY AUDITOR. IT IS FOUND THAT FOR A.Y. 2008 - 09 IN RESPECT OF WHICH THE RETURN OF INCOME WAS FILED ON 18/12/2008, SUCH AN AUDITOR WAS APPOINTED BY THE REGISTRAR ON 19/07/2008. THE AUDITOR IS DIPAK ATR AWALKAR & COMPANY, CHARTERED ACCOUNTANTS, JALGAON AND HE SUBMITTED TO THE ASSESSEE, THE AUDIT REPORT FOR THE YEAR ENDED 31/03/2008, RELEVANT TO A.Y. 2008 - 09 ON 05/12/2008. NECESSARY SUPPORTING PROOF IN THIS REGARD IS FILED BEFORE THE AO AND ALSO PLACED BEF ORE ME. IT IS THIS AUDIT REPORT THAT DELAYED THE FILING OF THE RETURN OF INCOME FOR A.Y. 2008 - 09 TO 18/12/2008. THEREFORE, THERE IS A REASONABLE CAUSE FOR THE ASSESSEE NOT TO FILE THE SAID RETURN WITHIN THE DUE DATE OF 31/10/2008. THE RETURN OF INCOME FOR A.Y. 2008 - 09 DECLARING LOSS OF RS.1,16,78,607/ - FILED ON 18/12/2008 IS, THEREFORE, TREATED U/S 139(4) AND NOT U/S 139(1) AND NO ASSESSMENT U/S 143(3) WAS COMPLETED, THEREFORE, THE LOSS RETURNED GOT ACCEPTED BY THE AO. ON THESE FACTS, IN MY CONSIDERED VIEWS , THE ASSESSEE WILL NOT LOSE ITS RIGHT TO CLAIM OF CARRY FORWARD OR SET OFF OF LOSSES, WHICH ARE OTHERWISE AVAILABLE TO IT. 4 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK WHILE DEALING WITH A RETURN OF LOSS FILED BEYOND THE TIME LIMIT U/S 139(1) BUT U/S 148 OF THE ACT, THE HON. MADHYA PRADESH HIGH COU RT IN THE CASE OF CO OPERATIVE MARKETING SOCIETY LTD. VS. CIT(1983) 143 ITR 99 HELD THAT THE PROVISIONS OF SECTION 80 MADE IT CLEAR THAT IN ORDER THAT LOSS COULD BE CARRIED FORWARD AND SET OFF U/S 72(1) OR SECTION 73(2) OR SECTION 74(1), SUCH LOSS SHOULD H AVE BEEN DETERMINED IN PURSUANCE OF A RETURN FILED U/S 139 OF THE ACT. THEREFORE, SUB - SECTION (1) AND (4) OF SECTION 139 WERE TO BE READ TOGETHER AND AN ASSESSEE WOULD BE ENTITLED TO CARRY FORWARD THE LOSS IF HE HAD FILED A RETURN AFTER THE PERIOD PRESCRIB ED U/S 139(1) BUT WITHIN THE TIME ALLOWED U/S 139(4). A SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF BURDWAN WHOLESALE CONSUMERS CO - OP SOCIETY LTD. VS. CIT REPORTED IN 57 TAXMAN 227 (CAL.). IN THE INSTANT CASE BEFORE ME , THE ASSESSEE HAD FILED THE RETURN FOR A.Y. 2008 - 09 U/S 139(4) CLAIMING LOSS OF RS.1,16,78,607/ - , WHICH HAS BEEN ACCEPTED BY THE AO U/S 143(1), THEREFORE, IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENTS, THE ASSESSEE IS ENTITLED TO CARRY FORWARD OF THE LOSSE S TO THE SUBSEQUENT YEARS AS PER THE LIMITATION GIVEN IN THE ACT. THE AO IS THUS DIRECTED ACCORDINGLY TO ALLOW THE SET OFF OF THE LOSS OF RS.24,65,698/ - IN RESPECT OF THE A.Y. 2008 - 09 AS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME OF A.Y. 2009 - 10. THIS VIEW IS FURTHER FORTIFIED BY THE DECISIONS OF THE HON. JURISDICTION HIGH COURT IN TH E C ASE OF TULSIDAS GOPALJI CHARITABLE AND CHALESHWAR TEMPLE TRUST VS. CIT REPORTED IN 207 ITR 368(BOM.) WHEREIN THE HON. BOMBAY HIGH COURT HAS HELD THAT A RETURN FILED BEY OND TIME SPECIFIED IN SECTION 139(1) BUT WITHIN THE TIME SPECIFIED IN SECTION 139(4) CAN BE SAID TO BE A RETURN FILED WITHIN TIME ALLOWED U/S 139(1) OF THE ACT. IN VIEW OF THE ABOVE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE APPELLANT IS ALLOWED TO CA RRY FORWARD AND SET OFF OF LOSS OF RS.24,65,698/ - CLAIMED BY THE APPELLANT IN A.Y. 2009 - 10. THE IMPUGNED DISALLOWANCE OF RS.24,65,698/ - IS THUS DELETED. THIS GROUND OF APPEAL IS ALLOWED. NOW THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE R IVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE LD. DR SUBMITS THAT TO CLAIM OF THE BENEFIT OF SET OFF OF 5 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK THE BROUGHT FORWARD LOSS U/S. 72(1) OF THE ACT THE CON DITIONS OF SEC. 80 OF THE ACT MUST BE SATISFIED. HE SUBMITS THAT THE DECISION OF T HE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KULU VALLEY TRANSPORT CO. PVT. LTD. 77 ITR 518 (SC) WHICH IS RENDERED IN THE INCOME - TAX ACT , 19 2 2 IS NO MORE GOOD LAW AS THERE WAS NO PROVISION ANALOGOUS TO SEC. 80 OF THE ACT, 1961 IN THE INCOME - TAX ACT , 192 2. HE SUBMITS THAT POWER OF CONDONING THE DELAY IS ONLY VESTED WITH THE CENTRAL BOARD OF DIRECT TAX (IN SHORT CBDT) AND STATUTE HAS NOT GIVEN POWER TO CONDONE THE DELAY IN LATE FILING OF THE RETURN OF LOSS FOR CLAIMING THE BENEFIT OF SET OFF OF THE BROU GHT FORWARD LOSS U/S. 72(1) TO ANY OTHER AUTHORITY. HE SUBMITS THAT THE CASE LAW RELIED ON BY CIT(A) IS PRIOR TO THE AMENDMENT TO SEC. 80 AND THE LAW IS TO BE INTERPRETED AS APPLICABLE TO THE RESPECTIVE ASSESSMENT YEAR. HE SUBMITS THAT THE ASSESSING OFFI CER HAS RIGHTLY DISALLOWED THE CLAIM OF SET OFF OF THE LOSS BROUGHT FORWARD FROM THE A.Y. 2008 - 09 AND HENCE, THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 5. PER CONTRA, THE LD. AR SUPPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITS THAT THE DELAY WAS NOT ATTRIBUTABLE TO THE ASSESSEE AS THE AUDITOR CANNOT BE APPOINTED BY THE ASSESSEE BANK BUT THE APPOINT MENT OF AUDITORS ARE CONTROLLED AND REGULATED BY THE CO - OPERATIVE DEPARTMENT OF THE STATE OF MAHARASHTRA. HE SUBMITS THAT THE ASSESSEE BANK MAY NOT BE DEPRIVED FROM THE LEGITIMATE CLAIM WHEN LATE FILING OF THE RETURN IS NOT DELIBERATE NOR IT IS ATTRIBUTABLE TO THE ASSESSEE BANK . 6. IN THIS CASE, THE CONTROVERSY IS IN RESPECT OF THE CLAIM OF SET OFF U/S. 72(1) OF THE INCOME - TAX ACT IN RESPECT OF THE L OSSES DECLARED BY THE ASSESSEE FOR THE A.Y. 2008 - 09 . I N THE RETURN FILE D ON 18 - 12 - 2008 , T HE TOTAL LOSS DECLARED BY THE ASSESSEE FOR THE A.Y. 2008 - 09 WAS TO THE EXTENT OF RS.1,16,78,607/ - . FOR DECIDING THE ISSUE BEFORE US WE HAVE TO EXAMINE THE PROVISIONS OF SEC. 80 OF THE INCOME - TAX ACT, 1961 WHICH READS AS UNDER: 6 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK NOTWITHSTANDING ANYTHING CONTAINED IN THIS CHAPTER, NO LOSS WHICH HAS NOT BEEN DETERMINED IN PURSUANCE OF A RETURN FILE [IN ACCORDANCE WITH THE PROVISIONS OF SUB - SECTION (3) OF SECTION 139], SH ALL BE CARRIED FORWARD AND SET OFF UNDER SUB - SECTION (1) OF SECTION 72 OR SUB - SECTION (2) OF SECTION 73 OR SUB - SECTION (1) [OR SUB - SECTION (3)] OF SECTION 74 [OR SUB - SECTION (3) OF SECTION 74A]. 7 . AS PER SEC. 80 OF THE INCOME - TAX ACT IF THE ASSESSEE DES IRE S TO CLAIM THE BENEFIT OF THE SET OFF IN RESPECT OF THE LOSSES SUSTAINED FOR ANY ASSESSMENT YEAR MORE PARTICULARLY U/S. 72(1) OR 7 3 (2) OR OTHER S ECTIONS THEN IT IS MANDATORY ON THE PART OF THE ASSESSEE AS PER THE LAW APPLICABLE TO A.Y. 2008 - 09 , T HE ASSE SSEE MUST FILE THE RETURN OF LOSS WITHIN THE TIME PRESCRIBED U/S. 139( 3 ) R.W.S. 139(1) OF THE ACT . 8. IN THIS CASE IT IS NOT DISPUTED THAT THE ASSESSEE BANK FILED THE RETURN OF LOSS FOR THE A.Y. 2008 - 09 ON 18 - 12 - 2008 AND ADMITTEDLY UNDER DUE DATE OF FILIN G OF THE INCOME/RETURN OF LOSS WAS 31 - 10 - 2008. IN THE INCOME - TAX ACT, 1922, THERE WAS NO CONDITION LIKE SEC. 80 OF THE ACT OF 1961. 9. IN THE CASE OF KULU VALLEY TRANSPORT CO. PVT. LTD. (SUPRA), THE ASSESSEE COMPANY DID NOT FILE THE RETURN OF INCOME FOR THE A.YS. 1953 - 54 AND 1954 - 55 WITHIN THE PERIOD SPECIFIED IN U/S. 22 OF THE INCOME - TAX ACT, 1922. IN THE MONTH OF 1956 , THE COMPANY FILED VOLUNTARILY RETURNS DECLARING LOSS IN THE BUSINESS FOR THE TWO YEARS IN QUESTION. THE ITO REFUSED TO DETERMINE THE L OSS BY STATING THAT THE RETURN HAS BEEN FILED AFTER THE STATUTORY TIME LIMIT. WHEN THE MATTER REACHED BEFORE THE HON'BLE SUPREME COURT AT THE INSTANCE OF THE REVENUE THAT WHETHER THE LOSS DECLARED BY THE ASSESSEE COMPANY FOR THE A.YS. 1953 - 54 AND 1954 - 55 RESPECTIVELY REQUIRING LAW TO BE DETERMINED AND CARRY FORWARD U/S. 24(2) OF THE INCOME - TAX ACT. THE HON'BLE SUPREME COURT HAS HELD AS UNDER: 7 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK NOW , THE QUESTION WHICH WAS SUBMITTED FOR THE OPINION OF THE HIGH COURT , IN THE PRESENT CASE, CONSISTED OF TWO PA RTS, VIZ. (1) WHETHER THE LOSS RETURNED BY THE ASSESSEE FOR THE ASSESSMENT YEARS IN QUESTION WAS REQUIRED IN LAW TO BE DETERMINED BY THE INCOME - TAX OFFICER AND (2) WHETHER THOSE LOSSES COULD BE CARRIED FORWARD AFTER BEING SET OFF UNDER SECTION 24 (2) OF TH E ACT. THE FIRST PART OF THE QUESTION STOOD CONCLUDED BY THE DECISION OF THIS COURT IN RANCHHODDAS KARSONDAS' CASE . THE INCOME - TAX OFFICER COULD NOT HAVE IGNORED THE RETURN AND HAD TO DETERMINE THOSE LOSSES . SECTION 24(2) CONFERS THE BENEFIT OF LOSSES BE ING SET OFF AND CARRIED FORWARD AND THERE IS NO PROVISION IN SECTION 22 UNDER WHICH LOSSES HAVE TO BE DETERMINED FOR THE PURPOSE OF SECTION 24 (2) . THE QUESTION WHICH IMMEDIATELY ARISES IS , WHETHER SECTION 22(2 A ) PLACES ANY LIMITATION ON THAT RIGHT. THIS SUB - SECTION WHICH HAS BEEN REPRODUCED BEFORE SIMPLY SAYS THAT IN ORDER TO GET THE - BENEFIT OF SECTION 24(2) THE ASSESSEE MUST SUBMIT HIS LOSS RETURN WITHIN THE TIME SPECIFIED BY SECTION 22(1). THAT PROVISION MUST BE READ WITH SECTION 22(3) FOR THE PURPOSE OF DETERMINING THE TIME WITHIN WHICH A RETURN HAS TO BE SUBMITTED. IT CAN WELL BE SAID THAT SECTION 22(3) IS MERELY A PROVISO TO SECTION 22(1). THUS A RETURN SUBMITTED AT ANY TIME BEFORE THE ASSESSMENT IS MADE IS A VALID RETURN. IN CONSIDERING WHETHER A RE TURN MADE IS WITHIN TIME SUB - SECTION (1) OF SECTION 22 MUST BE READ ALONG WITH SUB - SECTION (3) OF THAT SECTION. A RETURN WHETHER IT IS A RETURN OF INCOME, PROFITS OR GAINS OR OF LOSS MUST BE CONSIDERED AS HAVING BEEN MADE WITHIN THE TIME PRESCRIBED IF IT IS MADE WITHIN THE TIME SPECIFIED IN SECTION 22(3). IN OTHER WORDS IF SECTION 22(3) IS COMPLIED WITH SECTION 22(1) ALSO MUST BE HELD TO HAVE BEEN COMPLIED WITH. IF COMPLIANCE HAS BEEN MADE WITH THE LATTER PROVISION THE REQUIREMENTS OF SECTION 22 (2 A ) WOUL D STAND SATISFIED. 10. IN THE CASE OF CO - OPERATIVE MARKETING SOCIETY LTD. VS. C OMMISSIONER OF INCOME - TAX , BHOPAL 143 ITR 99 (MP) WHICH DECISION IS ALSO RELIED ON BY LD. CIT(A) , THE LOSSES WERE PERTAINING TO THE A.YS. 1972 - 73 AND 1973 - 74. AS PER SEC. 80 OF THE INCOME - TAX ACT, 196 1 AS APPLICABLE TO THOSE ASSESSMENT YEARS THE ONLY REQUIREMENT WAS THE RETURN SHOULD HAVE BEEN FILED U/S. 139 OF THE ACT. SEC. 80 OF THE ACT, 1961 HAS UNDERGONE AMENDMENT AND HENCE, THE DECISION IN THE CASE OF 8 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK CO - OPERATIVE MARKE TING SOCIETY LTD. (SUPRA) IS NO MORE GOOD LAW. 11. IN THE CASE OF BURDWAN WHOLESALE CONSUMERS CO - OP. SOCIETY LTD. VS. CIT 191 ITR 570 (KOL.) AGAIN THE LOSS WAS PERTAINING TO THE A.Y . 1971 - 72 AND ONLY REQUIREMENT U/S. 80 WAS THERE HAS TO BE COMPUTATION O F LOSSES ON THE BASIS OF RETURN FILED U/S. 139 OF THE INCOME - TAX ACT. 12. THE ORIGINALLY ENACTED SEC. 139(3) OF THE ACT WHICH IS IN RESPECT OF FILING OF RETURN OF LOSS, INVOLVE D A DEPARTURE FROM THE PROVISIONS OF THE CORRESPONDING SEC. 22(2A) OF THE ACT OF 1922. AS THE RETURN OF LOSS UNDER THE OLD SEC. 22 (2A) OF 1922 ACT COULD HAVE BEEN MADE EITHER WITHIN THE TIME PRESCRIBED BY SUB - SEC . ( 1 ) OR WITHIN THE SUCH FURTHER TIME AS THE INCOME TAX OFFICER MIGHT HAVE ALLOWED BUT THERE IS NO SUCH PROVISION U/S. 139(3) OF THE ACT , 1961 . NOW IF THE ASSESSEE DESIRES TO AVAIL BENEFIT OF CARRY FORWARD AND SET OFF OF LOSS THEN THE ASSESSEE MUST FILE THE RETURN AS PROVIDE U/S. 139(3) OF THE ACT . F OR THE BENEFIT OF UNDERSTANDING THE REQUIREMENT WE REPRODUCE THE RELEVAN T PROVISION WHICH READS AS UNDER: SECTION 139 (3) IF ANY PERSON WHO HAS SUSTAINED A LOSS IN ANY PREVIOUS YEAR UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION OR UNDER THE HEAD CAPITAL GAINS AND CLAIMS THAT THE LOSS OR ANY PART THERE OF SHOULD BE CARRIED FORWARD UNDER SUB - SECTION (1) OF SECTION 72 , OR SUB - SECTION (2) OF SECTION 73 , OR SUB - SECTION (1) [OR SUB - SECTION (3)] OF SECTION 74 , [OR SUB - SECTION (3) OF SECTION 74A ], HE MAY FURNISH, WITHIN THE TIME ALLOWED UNDER SUB - S ECTION (1), A RETURN OF LOSS IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND CONTAINING SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED, AND ALL THE PROVISIONS OF THIS ACT SHALL APPLY AS IF IT WERE A RETURN UNDER SUB - SECTION (1). 13. IN SUM AND SUBSTANCE FOR CLAIMING THE BENEFIT OF SET OFF OF THE BROUGHT FORWARD LOSSES U/S. 72(1) OF THE ACT , AS IN THE PRESENT CASE , THE CONDITIONS U/S. 139(3) OF THE ACT AS WELL AS SEC. 80 MUST BE COMPLIED WITH . T HE RATIO DECIDENDI LAID DOWN IN THE PRECEDENT A S PER THE 9 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK JURISPRUDENCE IS BINDING ON THE LOWER COURTS OR THE TRIBUNAL BUT ONCE THE LAW IS AMENDED THE PRECEDENT LOSES ITS BINDING FORCE. NOW IT IS SPECIFICALLY PROVIDE D IN SEC. 80 THAT FOR GETTING THE BENEFIT OF SET OFF OF THE LOSS FOR ANY ASSESSMENT YE AR , THE RETURN MUST BE FILED AS PER PROVISIONS OF SEC. 139(3) OF THE ACT. IN OUR OPINION THE PRECEDENTS RELIED ON BY THE LD. CIT(A) ARE NO MORE GOOD LAW FOR APPLYING THE PRINCIPLES FOR THE A.Y. 2009 - 10 AS THE LAW HAS UNDERGONE CHANGE MORE PARTICULARLY SEC . 80 OF THE ACT, 1961. 14. THE LD. COUNSEL HAS PLACED HIS RELIANCE ON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF BOMBAY MERCANTILE CO - OP. BANK LTD. VS. CENTRAL BOARD OF DIRECT TAXES & ORS. 332 ITR 87 . IN THE SAID CASE THE PETITI ONER IS MULTI STATE CO - OPERATIVE BANK. THE ASSESSEE - PETITIONER FILED THE RETURN FOR THE A.Y. 2001 - 02 DECLARING THE LOSS OF RS.15,94,19,523/ - . THE SAID RETURN WAS FILED AFTER THE STATUTORY AUDIT WAS COMPLETED ON 15 - 11 - 2001 AND THE AUDIT U/S. 44AB WAS COMP LETED ON 28 - 11 - 2001. THERE WAS DELAY IN FILING OF RETURN HENCE, THE ASSESSEE APPROACHED THE CENTRAL BOARD OF DIRECT TAXES (IN SHORT CBDT) BY FILING APPLICATION U/S. 119(2)(B) FOR CONDONATION OF DELAY IN FILING THE RETURN WHEREBY THE ASSESSEE CAN GET THE BENEFIT OF CARRY FORWARD OF THE LOSSES AS WELL AS THE SET OFF OF THE SAME U/S. 72(1) OF THE ACT. THE PRINCIPAL GROUND ON WHICH THE CONDONATION OF DELAY WAS SOUGHT BY THE ASSESSEE - PETITIONER WAS THAT THERE WAS A DELAY IN APPOINTMENT OF THE STATUTORY AUDIT ORS BY THE REGISTRAR, CO - OPERATIVE SOCIETIES, MAHARASHTRA STATE, PUNE AND IN CONSEQUENCE THERE WAS A DELAY IN COMPLETION OF THE AUDIT AND THE ASSESSEE COULD NOT FILE THE RETURN ON OR BEFORE 31 - 10 - 2001 AS PROVIDE D U/S. 139(3) OF THE ACT. THE ASSESSEES APP LICATION FILED U/S. 119(2)(B) WAS REJECTED BY THE CBDT VIDE ORDER DATED 18 - 03 - 2010 BY RECORDING THE REASON THAT THE REASONS MENTIONED BY THE ASSESSEE - PETITIONER CANNOT BE ACCEPTED AND NO EXCEPTIONAL CIRCUMSTANCES COULD BE 10 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK SHOWN BY THE ASSESSEE BANK TO COND ONE DELAY . 15. THE ASSESSEE CHALLENGED THE SAID ORDER BEFORE THE HON'BLE HIGH COURT OF BOMBAY BY FILING THE W RIT P ETITION. IN SUM AND SUBSTANCE THE SUBJECT MATTER OF THE WRIT PETITION WAS WHETHER THERE WAS JUSTIFICATION FOR THE CBDT TO DECLINE TO CONDO NE THE DELAY BY EXERCISING POWER U/S. 119(2)(B) OF THE ACT . THEIR LORDSHIPS HELD THAT THE REASONS MENTIONED BY THE ASSESSEE - PETITIONER IN ITS APPLICATION TO THE CBDT WERE DESERVED TO BE ACCEPTED. IN OUR HUMBLE OPINION THE DECISION RELIED ON BY THE LD. CO UNSEL IN THE CASE OF BOMBAY MERCANTILE CO - OP. BANK LTD. (SUPRA) IS NOT HELPFUL AS THE SAID DECISION IS RENDERED IN CONTEXT OF THE POWER AND DISCRETION VESTED IN THE CBDT U/S. 119(2)(B) OF THE INCOME - TAX ACT FOR CONDONING THE DELAY IN GENUINE CASES. 16. IT WAS ARGUED BEFORE US THAT THERE WAS DELAY IN APPOINTMENT OF THE AUDITORS AND HENCE, THE AUDIT COULD NOT BE COMPLETED IN TIME AND DELAY IN APPOINTMENT OF THE AUDITOR IS NOT ATTRIBUTABLE TO THE ASSESSEE. THOUGH WE HAVE SYMPATHY FOR THE ASSESSEE BANK BUT ULTIMATELY WE HAVE TO DECIDE ISSUE WITHIN SCOPE AND LIMITATION OF POWER VESTED IN ITAT . T HE APPELLATE PROCEEDINGS ARE CONTINUATION OF THE ASSESSMENT PROCEEDINGS ONLY . T HERE IS NO PROVISION IN SEC. 80 OF THE ACT GIVING ANY DISCRETION TO THE TRIBUNAL TO CO NDONE THE DELAY IN GENUINE CASES AS VESTED IN THE CBDT U/S. 119(2)(B) OF THE ACT. IN OUR OPINION THE PROPER COURSE WOULD HAVE BEEN TO APPROACH THE CBDT U/S. 119(2)(B) FOR CONDONING THE DELAY IN FILING THE RETURN OF LOSS FOR THE A.Y. 2008 - 09. IT IS WELL S ETTLED PRINCIPLES THAT THE AUTHORITY CREDITED THE STATUTE DERIVES THE POWER FROM THE STATUTE ONLY . W E, THEREFORE, HOLD THAT AS THE CONDITIONS OF SEC. 80 OF THE ACT, 1961 ARE NOT COMPLIED HENCE, THE ASSESSING OFFICER WAS JUSTIFIED IN REFUSING TO ALLOW THE CARRY FORWARD LOSS FOR THE A.Y. 2008 - 09 AND TO DECLINE THE SET OFF FOR THE SAME. WE, ACCORDINGLY, REVERSE THE ORDER OF THE 11 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK CIT(A) ON THIS ISSUE AND RESTORE THE ORDER OF THE ASSESSING OFFICER ASSESSING OFFICER. ACCORDINGLY, GROUND NO. 1 IS ALLOWED. 17. THE NEXT ISSUE IS THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN RESPECT OF THE PENALTY OF RS.1,00,000/ - LEVIED BY THE RBI. IT WAS PLEADED BY THE ASSESSEE BANK THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER IS NOT FOR ANY SERIOUS OFFENCE BUT IT IS C OMPENSATORY IN NATURE AND IT IS FOR TRIFLE FAILURES FOR NON - COMPLIANCE . T HE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE AND MADE ADDITION. THE LD. CIT(A) DELETED THE SAID ADDITION. IT IS SEEN THAT THE ASSESSEE BANK HA D VIOLATE D OPERATIONAL IN STRUCTIONS ISSUE D BY THE RBI VIDE ITS LETTER NO. UBD .MRO.BSS - IV/2797/15.07.1646/2995 - 06 DATED 12 - 0 4 - 2006 BY GRANTING FRESH LOANS OUT OF ACCRETION DEPOSITS AND LOAN RECOVERIES INSTEAD OF INVESTING THE SAME AS PER SLR GUIDELINES. THE SAID PENALTY WAS LEVIED U/S. 47A(1)(B) OF THE ACT R.W.S. 46(4) OF THE ACT. SEC. 47A OF THE BANKING REGULATION ACT GIVES POWER TO RBI TO IMPOSE THE PENALTY IF THERE IS A DEFAULT OF ANY MATTER MENTIONED I N SEC. 46(3) OR (4) BY BANKING COMPANY. THE PENALTY IS PRESCRIBED U/S. 46 O F THE BANKING REGULATION ACT. SEC. 46(4) OF THE ACT PROVIDES FOR GENERAL CONTRAVENTION OR DEFAULT BY THE BANKING COMPANY. NON - C OMPLIANCE OF ANY REQUIREMENT OF THE BANKING REGULATION ACT OR OF ANY ORDER, RULE OR DIRECTION ISSUED BY THE RBI , IN OUR OPINION , THE PENALTY LEVIED BY THE RBI IS FOR PROCEDURAL VIOLATION BY THE ASSESSEE BANK AND IT IS CIVIL IN NATURE. IN OUR OPINION CLAIM OF THE ASSESSEE CANNOT BE DISALLOWED AS RIGHTLY HELD BY THE LD. CIT(A). WE, ACCORDINGLY, CONFIRM THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND GROUND NO. 2 IS DISMISS ED . 18. THE NEXT ISSUE IS IN RESPECT OF THE ADDITION OF RS.2,47,000/ - BY DISALLOWING THE CLAIM OF THE AMORTIZATION OF GOVT. SECURITIES PREMIUM PERTAINING TO THE HELD TO MATURITY (HTM). 12 ITA NO. 1 585 /PN/201 2 , GANESH SAHAKARI BANK LTD., NASHIK 19. WE HAVE HEARD THE PARTIE S. WE FIND THAT THIS ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE IN THE CASE OF LATUR URBAN CO - OP. BANK LIMITED, LATUR VS. DY. CIT, CIRCLE - 3, NANDED, ITA NOS. 778 & 792/PN/2011 ORDER DATED 31 - 08 - 2012 AS WELL AS BY THE DECISION OF THE ITAT, MUMBAI BENCH , MUMBAI IN THE CASE OF ACIT, VS. BANK OF RAJASTHAN LTD. (2011) TIOL 35 ITAT (MUM.). IN OUR OPINION, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. ACCORDINGLY, GROUND NO. 3 IS DISMISS. OTHER GROUNDS ARE GENERAL IN NATURE. 20. IN THE RESULT, THE REVENUES APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 21 - 03 - 2014 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 21 ST MARCH, 2014 COPY TO 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) - I , NASHIK 4 THE CIT - I , NASHIK 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE