The Nilgiris District Central Co-op. Bank Ltd., CHENNAI V. ITO, Ootacamund

ITA 1998/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77221 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 13-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DAS GUPTA IRS
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Bad and doubtful debts; Revised return
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , . . , ! ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.1998/MDS/2013. ( / ASSESSMENT YEAR : 2009-2010) THE NILGIRIS DISTRICT CENTRAL CO- OPERATIVE BANK LTD, CHARRING CROSS, COMMERICAL ROAD, OOTY 643 001. [PAN:AAALT 0073E] ( #$ /APPELLANT) VS THE INCOME TAX OFFICER, WARD I(1), OOTACAMUND. ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI. R. VIJAYARAGHAVAN, ADVOCATE / RESPONDENT BY : SHRI. S. DASGUPTA, IRS, JCIT. /DATE OF HEARING : 08.04.2014. ! /DATE OF PRONOUNCEMENT : 17.04.2014. ' / O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL ARI SES FROM ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBATORE DATED I.T.A.NO.1998/MDS/2013 :- 2 -: 13.09.2013, PASSED IN APPEAL NO.346/2011-12 FOR ASS ESSMENT YEAR 2009-2010, IN PROCEEDINGS UNDER SECTION 143(3) OF T HE INCOME TAX ACT 1961 [IN SHORT THE ACT]. 2. THE FOLLOWING GROUNDS HAVE BEEN PLEADED IN THIS AP PEAL. 2. THE COMMISSIONER OF INCOME TAX(APPEALS) ERRED I N REJECTED THE PROVISION OF RS.2,93,09,329/- U/S36(1)(VIIA) MA DE TOWARDS BAD AND DOUBTFUL DEBTS. 2.1 THE COMMISSIONER OF INCOME TAX ERRED IN HOLDING THAT THE APPELLANT HAS NOT CLAIMED THE ABOVE PROVISION SPECI FICALLY IN THE RETURN OF INCOME AND ALSO NOT RAISED THE SAME BEFOR E THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. 2.2 THE COMMISSIONER OF INCOME TAX OUGHT TO HAVE AP PRECIATED THAT THE APPELLANT ENTITLEMENT U/S. 36(1)(VIIA) FOR THE ABOVE PROVISION WHICH WAS NOT SPECIFICALLY CLAIMED IN THE RETURN HO WEVER SUCH A CLAIM IS LEGALLY PERMISSIBLE AND LEGITIMATE IN NATURE IS ALLOWABLE AS PER CBDT CIRCULAR NO.14(XI-35) DATED 11.04.1955. 3. WITHOUT PREJUDICE, CLAIM UNDER SECTION 36(1)(VII A) BEING A STATUTORY DEDUCTION, THE CIT(A) MAY ADMIT THE CLAI M OF THE ASSESSEE AND DECIDE THE SAME ON MERITS. 3. IN THE COURSE OF HEARING, THE ASSESSEE REITERATES THE PLEADINGS AND PLACES ON RECORD A PAPER BOOKS COMPRISING OF R BIS SECOND QUARTER REVIEW OF MONETARY POLICY FOR THE YEAR 2009-10 - PROVISIONING REQUIREMENT FOR STANDARD ASS ETS DATED 5 TH NOVEMBER 2009, NPA PROVISION MOVEMENT AS ON 31.03.2 009, RURAL BRANCH ADVANCE OUTSTANDING PERIOD FROM 01.04.2008 T O 31.03.2009, TOTAL INCOME STATEMENT, PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED I.T.A.NO.1998/MDS/2013 :- 3 -: 31.03.2009, BALANCE SHEET AS ON 31 ST MARCH, 2009 AND PRAYS FOR ACCEPTANCE OF THE APPEAL. 4. THE REVENUE STRONGLY SUPPORTS THE ORDER OF CIT(A) U NDER CHALLENGE DISALLOWING BROUGHT FORWARD LOSSES AND R E-WORKING THE ASSESSEES INCOME TO J58,36,700/-. REGARDING APPLI CATION OF SECTION 36 (1)(VIIA), IT CONTENDS THAT SINCE THERE WAS NO MATERIAL PLACED ON RECORD IN LOWER APPELLATE PROCEEDINGS, THE CIT(A) H AS RIGHTLY REJECTED THE ASSESSEES ADDITIONAL GROUND. 5. THE ASSESSEE; THE NILGIRIS DISTRICT CENTRAL CO-OPER ATIVE BANK LIMITED, IS A CENTRAL COOPERATIVE BANK GOVERNED AS PER NORMS PRESCRIBED BY THE RESERVE BANK OF INDIA FROM TIME TO TIME. ON 30.09.2009, IT HAD FILED ITS RETURN DECLARING J N IL AS INCOME. THE SAME WAS SUMMARILY PROCESSED. THEREAFTER, THE AS SESSING OFFICER FRAMED REGULAR ASSESSMENT VIDE ORDER DATED 29.12. 2011. IN COURSE THEREOF, HE DISALLOWED ASSESSEES CLAIM OF BROUGHT FORWARD LOSSES INTER ALIA ON THE GROUND THAT AS PER STATEMENTS, IT HAD N O LOSSES TO THIS EFFECT IN IMPUGNED ASSESSMENT YEAR AND ALSO THAT IT S NET PROFIT HAD TO BE REWORKED. HE ACTED ACCORDINGLY AND ASSESSED TOT AL INCOME AS J58,36,695/-. I.T.A.NO.1998/MDS/2013 :- 4 -: 6. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL. APART FROM CHALLENGING THE ACTION OF ASSESSING OFFICER IN DISA LLOWING BROUGHT FORWARD LOSSES IN QUESTION; IT RAISED AN ADDITIONAL PLEA THAT UNDER SECTION 36 (1)(VIIA), PROVISION FOR BAD AND DOUBTFU L DEBTS IS ALLOWABLE AS DEDUCTION IN THE HANDS OF A COOPERATIVE BANK. TH E CIT(A) HAS DISMISSED THE ASSESSEES APPEAL BY OBSERVING AS UND ER:- 5. I HAVE GONE THROUGH THE SUBMISSION MADE BY THE APPELLANT AND ALSO THE ORDER OF THE ASSESSING OFFICER. THE H ONBLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF IN DIA LTD VS. CIT 187 ITR 688 HELD THAT APPELLATE AUTHORITY HAS T HE JURISDICITION TO PERMIT THE APPELLANT TO RAISE ADDI TIONAL GROUNDS, IF THE GROUNDS SO RAISED COULD NOT HAVE BEEN RAISED AT THE STAGE WHEN THE RETURN WAS FILED OR WHEN THE ASSESSM ENT WAS MADE OR IF THE GROUNDS BECOME AVAILABLE ON ACCOUNT OF CHARGE OF CIRCUMSTANCES OR LAW. 6. IN THE CASE OF JUTE CORPORATION OF INDIA LTD VS CIT, THE ASSESSEE DID NOT CLAIM ANY DEDUCTION OF ITS LIABILI TY TO PAY PURCHASE TAX UNDER THE PROVISIONS OF THE BENGAL JUT E TAXATION ACT 1941, AS THE ASSESSEE ENTERTAINED A BELIEF THAT IT WAS NOT LIABLE TO PAY PURCHASE TAX UNDER THE AFORESAID ACT BUT LATER ON IT WAS ASSESSED TO PURCHASE TAX DESPITE THE DELAY I N FILING OF APPEAL BEFORE THE APPELLATE AUTHORITY. THE ASSESSE E THEREAFTER CLAIMED DEDUCTION FOR THE SAID AMOUNT TOWARDS ITS L IABILITY TO PAY PURCHASE TAX AS DEDUCTION FOR THE ASSESSMENT YE AR IN CONSIDERATION. 7. ACCORDINGLY, IN THE CASE OF GOETZE INDIA LTD, TH E HONBLE SUPREME COURT HELD THAT ADDITIONAL CLAIM CANNOT BE MADE BEFORE THE ASSESSING OFFICER, AS THERE IS NO PROVIS ION UNDER THE IT ACT TO MAKE AMENDMENT IN THE RETURN WITHOUT FILI NG A REVISED RETURN. THE HONBLE SUPREME COURT FURTHER STATED THAT THIS DECISION WAS LIMITED TO THE ASSESSING AUTHORIT Y TO ENTERTAIN I.T.A.NO.1998/MDS/2013 :- 5 -: THE CLAIM FOR DEDUCTION OTHERWISE THAN BY REVISED R ETURN AND IT DOES NOT IMPINGE ON THE POWER OF THE TRIBUNAL. 8. IN THE CASE OF THE APPELLANT THE PLEA FOR DEDUCT ION U/S36(1)(VIIA) WAS NOT FILED IN THE RETURN OF INCOM E. THE ASSESSEE HAS NOT RAISED THE ISSUE BEFORE THE ASSESS ING OFFICER. THE INFORMATION UNDER RULE 6BA WHICH PROVIDES THE I NFORMATION REGARDING THE ELIGIBLE AMOUNT FOR DEDUCTION U/S36(1 )(VIIA) IS ALSO NOT AVAILABLE ON RECORD. EVEN IN THE BOOKS OF ACCOUNT AND THE P & L A/C THE ASSESSEE HAS NOT MADE ANY PROVISI ON U/S36(1)(VIIA). IT IS CLEARLY A NEW ISSUE RAISED B EFORE THE CIT(A) WITHOUT ANY MATERIAL ON RECORD. THE HONBLE APEX COURT IN THE CASE OF JUTE CORPORATION OF INDIA LTD ALSO H ELD THAT THERE MAY BE SEVERAL FACTORS JUSTIFYING RAISING O F SUCH NEW PLEAS IN APPEAL, AND EACH CASE HAS TO BE CONSIDERED THE QUESTION SO RAISED IN ALL ITS ASPECTS. OF COURSE, WHILE PERMITTING THE ASSESSEE TO RAISE ADDITIONAL GROUNDS THE AAC SHOULD EXERCISE HIS DISCRETION IN ACCORDANCE WITH L AW AND RAISE THEM. IN THE CASE OF THE APPELLANT THE GROUNDS RA ISED IN THE APPEAL ALSO COULD HAVE BEEN RAISED BEFORE THE ASSES SING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS NOT THE CASE OF THE APPELLANT THAT THE GROUNDS SO RAISED IN THE APPEAL COULD NOT HAVE BEEN RAISED AT THE TIME OF PARTICULA R STAGE IS WHEN THE RETURN WAS FILED OR WHEN THE ASSESSMENT OR DER WAS MADE OR WHEN THE GROUNDS BECOME AVAILABLE ON ACCOUN T OF CHANGE OF CIRCUMSTANCE OR LAW. 9. TAKING THE FACTS OF THE CASE INTO CONSIDERATION, IN MY OPINION THE APPELLANT HAS RAISED THE ISSUE OF ALLOW ANCE U/S. 36(1)(VIIA) FOR THE FIRST TIME IN THE APPEAL WITHOU T ANY MATERIAL ON RECORD. 10. AS DISCUSSED THE ABOVE, THE APPELLANT HAS NOT C REATED THE PROVISION IN THE P & L A/C PROVIDED FOR THE ASS ESSMENT YEAR 2009-10. HENCE, THE CLAIM OF THE APPELLANT IS REJE CTED. THIS GROUND OF APPEAL IS DISMISSED. THEREFORE, THE ASSESSEE IS IN APPEAL. I.T.A.NO.1998/MDS/2013 :- 6 -: 7. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH T HE CASE FILE AS WELL AS THE PAPER BOOK(SUPRA). A PERUSAL OF THE ORDER OF THE LOWER APPELLATE AUTHORITY MAKES IT CLEAR THAT ASSESSEES ADDITIONAL GROUND CLAIMING DEDUCTION UNDER SECTION 36 (1)(VIIA) HAS B EEN DECLINED ONLY FOR THE REASON THAT THERE WAS NO MATERIALS PLACED O N RECORD. IN THE FINDINGS UNDER CHALLENGE, WE DO NOT SEE ANY OPPORTU NITY FORTHCOMING TO HAVE BEEN GRANTED SPECIFICALLY ASKING TO PRODUCE THE SAME. THUS THE FACTUAL POSITION AS IT APPEARS IS THAT THE ASSE SSEE HAD RAISED ADDITIONAL GROUND OF RELIEF UNDER SECTION 36(1)(VII A) WITHOUT ANY MATERIAL. NOR THE CIT(A) HAS DIRECTED IT TO PRODUC E THE SAME. IN THIS MANNER, THERE SEEMS TO BE SOME COMMUNICATION GAP IN LOWER APPELLATE PROCEEDINGS. THEREFORE, IN THE LARGER IN TEREST OF JUSTICE, WE DEEM IT PROPER TO TAKE THE PAPER BOOK FILED BY THE ASSESSEE ON RECORD COMPRISING OF THE ABOVESAID MATERIAL. HOWEVER, SIN CE THESE DOCUMENTS HAVE NOT BEEN EXAMINED EITHER BY THE ASSE SSING OFFICER OR THE CIT(A), WE DEEM IT APPROPRIATE TO REMIT THE IS SUE BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING ADEQUATE OPPORTUNI TY OF HEARING. I.T.A.NO.1998/MDS/2013 :- 7 -: 8. THIS ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 17TH OF APRIL, 2014, AT CHENNAI. SD/- SD/- ( . ) ( . . ) ! (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER '# /CHENNAI. $% /DATED:17.04.2014. KV %& '( )( /COPY TO: 1. * APPELLANT 2. / RESPONDENT 3. + ( )/CIT(A) 4. + /CIT 5. (,- . /DR 6. -/ 0 /GF.