The Cuddalore District Central Co-operative Bank Ltd., Cuddalore V. ACIT Cuddalore Circle, Cuddalore

ITA 1776/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4987 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILENDRA MAMIDIPCIT
• Assessee Lawyers: R SRICHARAN SHRI K RAVI
• Keywords: Tangible material
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI . , . , BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.1776/CHNY/2018 / ASSESSMENT YEAR: 2008-09) M/S. THE CUDDALORE DISTRICT CO- OPERATIVE BANK LTD., (FORMERLY M/S. THE SOUTH ARCOT CENTRAL CO-OPERATIVE BANK LTD), NO.1, BEACH ROAD, CUDDALORE 607 001. VS THE ACIT, CUDDALORE CIRCLE, CUDDALORE PAN: AAAAT0209P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI R. SRICHARAN FOR SHRI K. RAVI, ADVOCATE / RESPONDENT BY : SHRI SAILENDRA MAMIDI, PCIT /DATE OF HEARING : 22.01.2019 /DATE OF PRONOUNCEMENT : 24 .01.2019 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- PUDUCHERRY, DATED 19.03.2018 IN ITA NO.13/CIT(A)-PDY/2016-17 FOR THE ASSESSMENT YEAR 2008-09 PASSED U/S.250(6) R.W.S. 143(3) & 147 OF THE ACT. 2 ITA NO.1776/CHNY/2018 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- VALIDITY OF RE-OPENING OF THE ASSESSMENT 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN NOT ADJUDICATING THE GROUND RAISED CHALLENGING THE RE-OPENING OF THE ASSESSMENT U/S.147 3. THE ASSESSING OFFICER HAS ISSUED THE NOTICE U/S.148 DATED 31/03/2015 WITHOUT HAVING ANY FRESH TANGIBLE MATERIAL TO FORM A BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. ADDITION IN RESPECT OF OVERDUE INTEREST RESERVE RELEASED 4. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION IN RESPECT OF RELEASE OF OVERDUE INTEREST RESERVE AMOUNTING TO RS.17,35,72,752/ WITHOUT APPRECIATING THE FACT THE 'OVERDUE INTEREST RESERVE' WAS DULY ADDED BACK TO TOTAL INCOME IN EARLIER ASSESSMENT YEARS AND THEREFORE RELEASE OF SUCH A RESERVE WILL NOT PARTAKE THE CHARACTER OF INCOME IN THE YEAR OF RELEASE. ADDITION IN RESPECT OF OTS-INTEREST WAIVER 5. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE ADDITION OF RS.22,24,150/- IN RESPECT OF AMOUNT DEBITED TO PROFIT AND LOSS ACCOUNT UNDER THE HEADING 'OTS-INTEREST WAIVER' ON THE ASSUMPTION THAT THE SAID AMOUNT IS OF THE CHARACTER OF BAD DEBT. THE CIT(A) ERRED IN NOT APPRECIATING THAT THE DEBIT HAS ARISED ON ACCOUNT OF REVISION OF INTEREST RATE FOR A PARTICULAR LOAN SCHEME AND THIS WOULD ONLY AMOUNT TO REVISION OF INCOME AND NOT A BAD DEBT. 6. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE PERMITTED TO BE RAISED DURING THE HEARING OF THE APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DISTRICT CENTRAL CO-OPERATIVE BANK, FILED ITS RETURN OF INCOME FOR THE 3 ITA NO.1776/CHNY/2018 ASSESSMENT YEAR 2008-09 ELECTRONICALLY ON 26.09.2008 ADMITTING NIL INCOME. THE ASSESSMENT WAS REOPENED U/S.147 OF THE ACT AND ASSESSMENT WAS COMPLETED ON 06.03.2015 AFTER DISALLOWING DEDUCTION CLAIMED U/S.36(1)(VIIA) OF THE ACT. SUBSEQUENTLY ONCE AGAIN ASSESSMENT WAS REOPENED AND FINALLY ASSESSMENT ORDER WAS PASSED U/S.143(3) R.W.S. 147 OF THE ACT ON 31.03.2016 WHEREIN THE LD. AO MADE ADDITION WITH RESPECT TO RELEASE OF OVERDUE INTEREST AMOUNTING TO RS.17,35,72,752/- AND OTS INTEREST WAIVER RS.22,24,150/-. ON APPEAL, THE LD.CIT(A) CONFIRMED THE ORDER OF THE LD.AO BY AGREEING WITH HIS VIEW. 4. AT THE OUTSET THE LD.AR SUBMITTED BEFORE US THAT THE LD.CIT(A) HAD FAILED TO ADJUDICATE CERTAIN GROUNDS RAISED IN THE APPEAL OF THE ASSESSEE AND THEREFORE IT WAS PLEADED THAT THE MATTER MAY BE REMITTED BACK. THE LD.DR ON THE OTHER HAND COULD NOT CONTROVERT TO THE SUBMISSION OF THE LD.AR. 5. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE VIEW THAT THE APPEAL OF THE ASSESSEE IS REQUIRED TO BE REMITTED BACK TO THE FILE OF LD.CIT(A) FOR ADJUDICATING ALL THE GROUNDS RAISED IN THE APPEAL 4 ITA NO.1776/CHNY/2018 BY THE ASSESSEE. ACCORDINGLY THE ENTIRE MATTER IS REMITTED BACK TO THE FILE OF LD.CIT(A) FOR DE-NOVA CONSIDERATION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 24 TH JANUARY, 2019 AT CHENNAI. SD/- SD/- ( ) (DUVVURU R.L REDDY) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED 24 TH JANUARY, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF