Assistant Commissioner of Income-tax, Ratnagiri Circle, , Ratnagiri V. The Ratnagiri District Central Co-Op Bank Ltd, Ratnagiri

ITA 1632/PUN/2018

• Counselvise Citation: [2022] 129 COUNSELVISE.COM (IT) 9828 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 07-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 271(1)(c); 143(3); 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपीऱ सं. / ITA Nos.1631 to 1634 & 1674/PUN/2018 निर्धारण वषा / Assessment Years : 2004-05, 2009-10, 2011-12, 2012-13 & 2008-09 The Asst. Commissioner of Income-tax, Ratnagiri Circle, Ratnagiri .......अऩीऱाथी / Appellant बिधम / V/s. The Ratnagiri District Central Co-operative Bank Ltd., Sahakar Bhavan, Jawahar Path, Ratnagiri. PAN: AAAAR7920B ......प्रत्यथी / Respondent Assessee by : None Revenue by : Shri Arvind Desai स ु नवाई की तारीख / Date of Hearing : 12-07-2022 घोषणा की तारीख / Date of Pronouncement : 15-07-2022 आदेश / ORDER PER INTURI RAMA RAO, AM: These are five appeals filed by the Revenue directed against different orders of the Commissioner of Income Tax (Appeals)-2, Kolhapur, dated 23.07.2018 for the assessment years 2004-05, 2009-10, 2011-12, 2012-13 & 2008-09. 2 ITA Nos.1631 to 1634 & 1674/PUN/2018 The Ratnagiri District Central Co-operative Bank Ltd. 2. Since the identical facts and issues are involved in all these appeals, we proceed to dispose of them vide this common order. 3. For the sake of clarity and convenience, the facts relevant for the appeal in ITA No.1631/PUN/2018 for A.Y. 2004-05 are stated herein. 4. Briefly, the facts of the case are as under: The respondent-assessee is a co-operative bank engaged in the business of banking. The return of income for the assessment year 2004- 05 was filed on 29.10.2004 declaring loss of Rs.10,53,92,979/- and against the said return of income, original assessment was completed vide order dated 28.12.2006 passed u/s 143(3) of the Act accepting the returned loss. Subsequently, the Assessing Officer (AO) issued notice u/s 148 os the Act on 28.03.2011 calling upon the respondent-assessee bank to file the return of income. The respondent-assessee filed the return of income in response to notice u/s 148 on 11.11.2011 declaring loss of Rs.7,69,69,470/-, against which assessment was completed by the AO vide order dated 27.12.2011 at a nil income after allowing deduction u/s 80P at Rs.7,71,47,195/- and after making additions on account of following two items: (i) Wrong provision for overdue interest at Rs.13,23,80,669/- (ii) Wrong deductions claimed u/s 36(1)(viia) at Rs.2,17,36,000/- 3 ITA Nos.1631 to 1634 & 1674/PUN/2018 The Ratnagiri District Central Co-operative Bank Ltd. 5. Being aggrieved by the above assessment order, an appeal was filed before the CIT(A) contesting the above additions, who vide order dated 08.11.2016 had deleted the addition on account of overdue interest of Rs.13,23,80,669/- but sustained the addition on account of disallowance of claim for deduction u/s 36(1)(viia) of Rs.2,17,36,000/-. On receipt of the order of CIT(A), the AO has initiated penalty proceedings u/s 271(1)(c) of the Act for addition made on account of disallowance of claim for deduction u/s 36(1)(viia) of Rs.2,17,36,000/-. In response to the show cause notice, the appellant had not filed any explanation before the AO and therefore, in the circumstances, the AO had passed an order dated 27.03.2017 levying penalty of Rs.67,16,423/- u/s. 271(1)(c) of the Act. 6. Being aggrieved by the levy of penalty, an appeal was filed before the CIT(A), who vide impugned order deleted the penalty by holding that mere disallowance of claim does not entail levy of penalty placing reliance on the decision of Hon'ble Supreme Court in CIT vs. Reliance Petroproduct (P) Ltd. 322 ITR 158 (SC) and Price Waterhouse Coopers Pvt. Ltd. 348 ITR 306 (SC). Being aggrieved by the decision of CIT(A), the Revenue is in appeal before us challenging the correctness of order of CIT(A). 7. When the matter was called, none appeared on behalf of the assessee despite due service of notice. The Sr. DR submits that the respondent- assessee bank made wrong claim deliberately knowing that it was not entitled for deduction u/s 36(1)(viia) for the assessment year prior to A.Y. 2007-08. Therefore, the respondent-assessee is clearly guilty of furnishing of inaccurate particulars of income. 4 ITA Nos.1631 to 1634 & 1674/PUN/2018 The Ratnagiri District Central Co-operative Bank Ltd. 8. We have carefully gone through the material on record. On perusal of the assessment order, it would reveal that the claim made for deduction u/s 36(1)(viia) was disallowed by the AO on the ground that co-operative banks were entitled to claim deduction only from assessment year 2007-08 and not for years prior to assessment year 2007-08. Thus, it is a case of mere disallowance of claim under particular section of the Act, there is no finding by the AO, as to what particulars filed by the assessee and found to be inaccurate. It is settled position of law that mere disallowance of claim on legal ground does not entail levy of penalty under the provisions of section 271(1)(c) of the Act as laid down by the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproduct (P) Ltd. (supra). The relevant findings are extracted below: “9. ..... We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under Section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars.” 9. The CIT(A) has rightly applied the ratio of said decision to the facts of the case. Therefore, we do not see any reason to differ with the reasoning of CIT(A). Hence, we do not find any merit in the appeals filed by the Revenue. 5 ITA Nos.1631 to 1634 & 1674/PUN/2018 The Ratnagiri District Central Co-operative Bank Ltd. 10. The facts and issues involved in ITA Nos.1632/PUN/2018 to 1634/PUN/2018 & 1674/PUN/2018 are similar to the facts and issues involved in ITA No.1631/PUN/2018. Therefore, the decision rendered in ITA No.1631/PUN/2018 shall apply mutatis mutandis to ITA Nos.1632/PUN/2018 to 1634/PUN/2018 & 1674/PUN/2018. 11. In the result, all the appeals of Revenue are dismissed. Order pronounced in the open court on 15 th July, 2022. Sd/- Sd/- S.S.VISWANETHRA RAVI INTURI RAMA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER ऩ ु णे / Pune; ददनाांक / Dated : 15 th July, 2022 GCVSR आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order is forwarded to : 1. अऩीऱाथी / The Appellant; 2. प्रत्यथी / The Respondent; 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A)-2, Kolhapur; 4. The Pr.CIT-2, Kolhapur; 5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, ऩ ु णे “A” / DR ‘A’, ITAT, Pune; 6. गार्ड पाईऱ / Guard file. आदेशान ु सार / BY ORDER, //सत्यावऩत प्रतत// True Copy// वररष्ठ तनजी सधिव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण, ऩ ु णे / ITAT, Pune