CITY UNION BANK LIMITED, KUMBAKONAM V. ACIT CIRCLE 1, KUMBAKONAM

ITA 1789/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1984 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 25-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARUVUURU SRIDHARJCITD R
• Assessee Lawyers: ABARNA C AS
• Keywords: Earning of tax free income
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1789/CHNY/2018 / ASSESSMENT YEAR : 2010-11 CITY UNION BANK LIMITED , CENTRAL OFFICE, 149,TSR BIG STREET, KUMKBAKONAM.612 001. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KUMBAKONAM. 612 001 PAN AAACC 1287 E ] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : MR.S.ANANTHAN & MR.ABARNA C.AS $% ! ' # /RESPONDENT BY : MR.VARUVUURU SRIDHAR,JCIT,D.R & ' ' () / DATE OF HEARING : 15 - 11 - 201 8 * ' () / DATE OF PRONOUNCEMENT : 15 - 11 - 201 8 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME-TAX,TRICHY-2 IN C NO.7143(8)/PR.CIT/TRY-2/2017-18 DATED 27.03.2018 FOR THE ASSESSMENT YEAR 2010-11. ITA NO. 1789/CHNY/2-018 :- 2 -: 2. MR.S.ANANTHAN & MR.ABARNA REPRESENTED ON BEHALF OF THE ASSESSEE AND MR.VARUVUURU SRIDHAR REPRESENTED ON BEHALF THE OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LD.A.R THAT THE ASSESS EE HAD FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 ON 30.09.2010 AND THE ORIGINAL ASSESSMENT ORDER CAME TO BE PASSED U/S .143(3) OF THE ACT ON 28.03.2013 WHEREIN CERTAIN DISALLOWANCE U/S.14A OF THE ACT READ WITH RULES 8D OF THE INCOME TAX RULES,1962 HAD BEEN MADE AT 2% OF EXEMPT INCOME. SUBSEQUENTLY, THE ASSESSMENT CAME T O BE REOPENED U/S.148 OF THE ACT AND THE REOPENED ASSESSMENT WAS COMPLETED U/S.143(3) R.W.S.147 OF THE ACT ON 22.03.2016 WHER EIN DISALLOWANCE BY INVOKING THE PROVISIONS OF THE SECTION 40(A)(IA) OF THE ACT HAD BEEN MADE. SUBSEQUENTLY ON 20.02.2018, THE LD.CIT ISSUED A SHOW CAUSE NOTICE U/S.263 OF THE ACT PROPOSING TO REVISE THE A SSESSMENT ORDER DATED 22.03.2016 PASSED U/S.143(3) R.W.S.147 OF THE ACT FOR RE- WORKING THE DISALLOWANCE U/S.14A READ WITH RULES 8D . IT WAS A SUBMISSION THAT THE ISSUE OF DISALLOWANCE U/S.14A R EAD WITH RULES 8D WAS NOT CONSIDERED IN THE ASSESSMENT ORDER DATED 22 .03.2016, BUT WAS AN ISSUE IN THE ASSESSMENT ORDER PASSED U/S.143 (3) OF THE ACT ON 28.03.2013, AND CONSEQUENTLY, THE ORDER PASSED U/S. 263 OF THE ACT DATED 27.03.2018 DIRECTING THE LD. ASSESSING OFFICE R TO RE-WORK THE ITA NO. 1789/CHNY/2-018 :- 3 -: DISALLOWANCE U/S.14A READ WITH RULES 8D WAS ERRONEO US AND LIABLE TO BE QUASHED. 4. IN REPLY, THE LD.D.R VEHEMENTLY SUPPORTED THE O RDER U/S.263 OF THE ACT PASSED BY PRINCIPAL COMMISSIONER OF INCO ME TAX, TRICHY. IT WAS A SUBMISSION THAT THE DISALLOWANCE U/S.14A READ WITH RULES 8D HAD NOT BEEN PROPERLY DONE BY THE LD. ASSESSING OFF ICER. IN REPLY, THE LD.A.R SUBMITTED THAT ISSUE WAS NOW SQUARELY COVERE D BY THE PRINCIPLES LAID DOWN BY THE APEX COURT IN THE CASE OF ALAGENDR AN FINANCE LTD., REPORTED IN [2007] 293 ITR 1 (SC) WHEREIN THE HONB LE SUPREME COURT HAS CATEGORICALLY HELD THAT:- THERE MAY NOT BE ANY DOUBT OR DISPUTE THAT ONCE AN ORDER OF ASSESSMENT IS RE-OPENED, THE PREVIOUS UNDER ASSESSMENT WILL BE HE LD TO BE SET ASIDE AND THE WHOLE PROCEEDINGS WOULD START AFRESH, BUT THAT WOULD NOT MEAN THAT EVEN WHEN THE SUBJECT-MATTER OF REASSESSMENT IS DIS TINCT AND DIFFERENT, THE ENTIRE PROCEEDING WOULD BE DEEMED TO HAVE BEEN REOP ENED. EXPLANATION (C) APPENDED TO SUB-SECTION (1) OF SECT ION 263 OF THE INCOME- TAX ACT, 1961, WHICH DEALS WITH THE POWER OF THE CO MMISSIONER IN REVISION, IS CLEAR AND UNAMBIGUOUS, AS IN TERMS THEREOF THE DOCT RINE OF MERGER APPLIES ONLY IN RESPECT OF SUCH ITEMS WHICH WERE THE SUBJEC T-MATTER OF APPEAL AND NOT IN RESPECT OF THOSE WHICH WERE NOT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMI TTEDLY THE ISSUE OF DISALLOWANCE U/S.14A READ WITH RULES 8D WA S AN ISSUE CONSIDERED IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED 28.03.2013. THE ISSUE OF DISALLOWANCE U/S .14A R.W.R.8D WAS ITA NO. 1789/CHNY/2-018 :- 4 -: NOT A SUBJECT MATTER OF ASSESSMENT IN THE ASSESSME NT ORDER PASSED U/S.143(3) R.W.S.147 OF THE ACT DATED 22.03.2016 AN D CONSEQUENTLY, WE HAVE NO HESITATION IN HOLDING THAT APPLYING THE PRINCIPLES LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF ALAGENDRAN FINANCE LTD., REFERRED TO SUPRA, THE ORDER PASSED U/S.263 OF THE ACT IS TIME BARRED BY LIMITATION IN SO FAR AS THE ISSUE PROPOSED FOR REVISION U/S.263 OF THE ACT IS AN ISSUE, WHICH HAD BEEN CONSIDERED IN THE ORIGINAL ASSESSMENT ORDER DATED 28.03.2013 AND THE ORDER PASSED BY PRIN CIPAL CIT, TRICHY U/S.263 OF THE ACT DATED 27.03.2018 IS BARRED BY LI MITATION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 15 TH NOVEMBER, 2018, AT CHENNAI. SD/ - SD/ - ( . ) (A.MOHAN ALANKAMONY) ! '# / ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ '# / JUDICIAL MEMBER - ' / CHENNAI . / DATED: 15 TH NOVMBER,2018. K S SUNDARAM / ' $(01 2 1( / COPY TO: 1 . ! / APPELLANT 3. & 3( () / CIT(A) 5. 145 $(6 / DR 2. $% ! / RESPONDENT 4. & 3( / CIT 6. 57 8' / GF