CENTRAL BANK OF INDIA MUMBAI EMPLYEES CO OPERATIVE CREDIT SOCIETY LTD, MUMBAI V. ITO 12(1)(3), MUMBAI

ITA 2051/MUM/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79223 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-06-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 26-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Keywords: Reopening of assessment; Principle of natural justice; Condonation of delay; Reason to believe; Reassessment proceedings
• Section: 143(3); 234B; 148

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, SMC MUMBAI .., BEFORE SHRI I.P.BANSAL, JUDICIAL MEMBER. ITA NO.2051/MUM/2014 : ASST.YEAR 2004-05 ITA NO.2052/MUM/2014 : ASST.YEAR 2009-10 CENTRAL BANK OF INDIA EMPLOYTEES CO-OPERATIVE CREDIT SOCIETY LTD., 2 ND FLOOR, STANDARD BUILDING, D.N.ROAD, MUMBAI 400 001. PAN:AAAAC 0708J THE INCOME TAX OFFICER, 12(1)(3) AAYKAR BHAVAN, MK ROAD, MUMBAI 400 020 ( ! / // / APPELLANT) # # # # / VS. ( $% !/ RESPONDENT) ! & ' & ' & ' & ' /APPELLANT BY : NONE $% ! & ' & ' & ' & ' /RESPONDENT BY : SHRI. B.YADAGIRI # & ()* / / / / DATE OF HEARING : 24.06.2014 +,- & ()* / DATE OF PRONOUNCEMENT : 24.06.2014 . . . . / / / / O R D E R PER I.P.BANSAL (JM) : BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND T HEY ARE DIRECTED AGAINST TWO SEPARATE ORDERS PASSED BY LD. CIT(A) DATED 5/12/201 3 FOR ASSESSMENT YEARS 2004- 05 AND 2009-10. GROUNDS OF APPEAL IN BOTH THE APPE ALS READ AS UNDER: GROUNDS APPEAL FOR A.Y 2004-05: UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW: CONDONATION OF DELAY 1. THE COMM. OF INCOME-TAX (APPEALS)-23, MUMBAI [CI T(A)] ERRED IN REFUSING TO CONDONE DELAY OF THE APPELLANT IN FILING APPEAL BEFORE HIM. 2. THE CIT(A) ERRED IN NOT APPRECIATING THE FACT TH AT APPELLANT HAD VALID GROUNDS FOR DELAY IN FILING APPEAL WHICH DESERVED TO BE CONDONE D ON PRINCIPLES OF NATURAL JUSTICE. RE-OPENING OF ASSESSMENT 3. WITHOUT PREJUDICE TO THE AFORESAID, THE CIT(A) E RRED IN NOT ADJUDICATING ON GROUND NOS. 01 TO 08 IN WHICH IT WAS STATED THAT RE-OPENIN G OF ASSESSMENT WAS NOT VALID AND BAD IN LAW. 4. THE CIT(A) ERRED IN NOT APPRECIATING THE FACT TH AT THE AO PROCEEDED TO COMPLETE THE ASSESSMENT PROCEEDINGS AND PASS AN ORDER WITHOUT FU RNISHING TO THE APPELLANT THE ITA NO.2051&2052/MUM/2014 ASST.YEAR 2004-05 & 2009-10 2 REASONS RECORDED FOR ISSUE OF NOTICE UNDER SECTION 148 ALTHOUGH AFTER HAVING ISSUED THE SAID NOTICE THE APPELLANT HAD FILED A RETURN OF INC OME IN RESPONSE TO THE SAME. 5. THE CIT(A) ERRED IN NOT APPRECIATING THE FACT TH AT THE FUNDAMENTAL JURISDICTION PRECONDITION FOR ISSUE OF A VALID NOTICE UNDER SECT ION 148 OF THE ACT AND VALID INITIATION OF REASSESSMENT PROCEEDINGS HAD NOT BEEN FULFILLED. 6. THE CIT(A) ERRED IN FAILING TO APPRECIATE THAT T HE IMPUGNED NOTICE UNDER SECTION 148 AND REASSESSMENT PROCEEDINGS INITIATED AND COMPETED PURSUANT THERETO ARE WITHOUT JURISDICTION, VOID AND WITHOUT ANY AUTHORITY OF LAW . 7. THE CIT(A) ERRED IN FAILING TO APPRECIATE THAT T HERE WAS NO VALID REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT DUE TO FAILURE ON THE PART OF THE APPELLANT DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR TH EIR ASSESSMENT. 8. THE CIT(A) ERRED IN FAILING TO APPRECIATE THAT T HE INTEREST INCOME SUBJECTED TO REASSESSMENT PROCEEDINGS WAS DISCLOSED BY THE APPEL LANT ON THE FACE OF ITS AUDITED INCOME & EXPENDITURE ACCOUNT FOR THE RELEVANT PREVI OUS YEAR WHICH WAS DULY FILED BEFORE THE AO ALONGWITH THE RETURN OF INCOME. DISALLOWANCE OF DEDUCTION UNDER SECTION 80P OF THE ACT IN RESPECT OF THE FOLLOWING INTEREST INCOME - INTEREST ON STAFF LOAN RS.1,31,886/- - INTEREST ON STAFF HOUSING LOAN RS. 64,098/- - INTEREST ON SAVINGS BANK ACCOUNT RS. 10,231/-- 9. WITHOUT PREJUDICE TO THE AFORESAID, THE CIT(A) ERRED IN NOT ADJUDICATING ON GROUND NOS. 09 TO 16 IN WHICH IT WAS STATED THAT AO ERRED IN DISALLOWING DEDUCTION UNDER SECTION 80P OF THE ACT IN RESPECT OF INTEREST EARNE D ON STAFF LOAN OF RS.1,31,886/- INTEREST EARNED ON SAVINGS BANK ACCOUNT OF RS.10,23 1/- AND INTEREST ON STAFF HOUSING LOAN OF RS.64,098/-. 10.THE CIT(A) ERRED IN FAILING TO APPRECIATE THAT T HE APPELLANT SOCIETY IS ENGAGED IN THE ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS MEMB ERS WHICH AS PER THE BOMBAY CO- OPERATIVE SOCIETIES ACT, 1925 INCLUDES ORDINARY MEM BERS, NOMINAL MEMBERS AND SYMPATHIZER MEMBERS. DENIAL OF DEDUCTION UNDER SECTION 80P(2)(C)(II) OF THE ACT 11 .WITHOUT PREJUDICE TO THE AFORESAID, THE CIT(A) ERRED IN NOT ADJUDICATING ON GROUND NO. 17 IN WHICH IT WAS STATED THAT THE AO ERRED IN DENYING THE APPELLANT DEDUCTION UNDER SECTION 80P(2)(C)(II) OF THE ACT. CHARGING OF INTEREST 12.WITHOUT PREJUDICE TO THE AFORESAID THE CIT(A) ER RED IN NOT ADJUDICATING ON GROUND NO. 18 IN WHICH IT WAS STATED THAT THE AO ERRED IN FAIL ING TO APPRECIATE THAT NO INTEREST IS CHARGEABLE UNDER SECTIONS 234B AND 234C OF THE ACT IN CASE THERE IS A DEFAULT IN PAYMENT OF ADVANCE TAX ON ACCOUNT OF ADDITIONS OR D ISALLOWANCES MADE IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT. THE AFORESAID GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO ONE ANOTHER. THE APPELLANT CRAVES LEAVE TO AMEND, TO MODIFY, TO ALTER, TO SUBS TITUTE AND I OR TO DELETE ALL OR ANY OF THE AFORESAID GROUNDS OF APPEAL AT OR BEFORE THE HE ARING. GROUNDS APPEAL FOR A.Y 2009-10: ITA NO.2051&2052/MUM/2014 ASST.YEAR 2004-05 & 2009-10 3 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW: CONDONATION OF DELAY 1. THE COMM. OF INCOME-TAX (APPEALS) - 23, MUMBAI [ CIT(A)] ERRED IN REFUSING TO CONDONE DELAY OF THE APPELLANT IN FILING APPEAL BEFORE HIM. 2. THE CIT(A) ERRED IN NOT APPRECIATING THE FACT TH AT APPELLANT HAD VALID GROUNDS FOR DELAY IN FILING APPEAL WHICH DESERVED TO BE CONDONE D ON PRINCIPLES OF NATURAL JUSTICE. DISALLOWANCE OF DEDUCTION UNDER SECTION 80P OF THE ACT IN RESPECT OF THE FOLLOWING INTEREST INCOME - INTEREST ON STAFF LOAN RS.1,98,379/- - INTEREST ON STAFF HOUSING LOAN RS. 7,781/- - INTEREST ON SAVINGS BANK ACCOUNT RS. 100/- 3. WITHOUT PREJUDICE TO THE AFORESAID, THE CIT(A) E RRED IN NOT ADJUDICATING ON GROUND NOS. 01 TO 08 IN WHICH IT WAS STATED THAT AO ERRED IN DISALLOWING DEDUCTION UNDER SECTION 80P OF THE ACT IN RESPECT OF INTEREST EARNE D ON STAFF LOAN OF RS.1,98,379/-, INTEREST EARNED ON SAVINGS BANK ACCOUNT OF RS.7,781 /- AND MISCELLANEOUS RECEIPTS OF RS.100/-. 4. THE CIT(A) ERRED IN FAILING TO APPRECIATE THAT T HE APPELLANT SOCIETY IS ENGAGED IN THE ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS MEMB ERS WHICH AS PER THE BOMBAY CO- OPERATIVE SOCIETIES ACT, 1925 INCLUDES ORDINARY MEM BERS, NOMINAL MEMBERS AND SYMPATHIZER MEMBERS. CHARGING OF INTEREST 5. WITHOUT PREJUDICE TO THE AFORESAID THE CIT(A) ER RED IN NOT ADJUDICATING ON GROUND NO. 09 IN WHICH IT WAS STATED THAT THE AO ERRED IN FAIL ING TO APPRECIATE THAT NO INTEREST IS CHARGEABLE UNDER SECTIONS 234B AND 234C OF THE ACT IN CASE THERE IS A DEFAULT IN PAYMENT OF ADVANCE TAX ON ACCOUNT OF ADDITIONS OR D ISALLOWANCES MADE IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT. THE AFORESAID GROUNDS OF APPEAL ARE WITHOUT PREJUDI CE TO ONE ANOTHER. THE APPELLANT CRAVES LEAVE TO AMEND, TO MODIFY, TO ALTER, TO SUBS TITUTE AND / OR TO DELETE ALL OR ANY OF THE AFORESAID GROUNDS OF APPEAL AT OR BEFORE THE HE ARING. 2. NOTICE OF HEARING WAS SENT TO THE ASSESSEE. HOW EVER, NONE WAS PRESENT ON THE FIXED DATE OF HEARING, THEREFORE, I PROCEED TO DECI DE THE PRESENT APPEALS EX-PARTE QUA THE ASSESSEE. 3. AS IT CAN BE SEEN FROM THE GROUNDS OF APPEAL, TH E ASSESSEE IS MAINLY AGGRIEVED BY THE DECISION OF LD. CIT(A) WHO HAS DISMISSED THE APPEALS FILED BY THE ASSESSEE ON ACCOUNT OF DELAY IN FILING THE APPEAL. DURING THE COURSE OF HEARING OF THE APPEAL IT WAS NOTICED BY LD. CIT(A) THAT THE DATE OF SERVICE OF THE NOTICE OF DEMAND IN BOTH THE CASES WAS 4 TH NOVEMBER, 2011 AND APPEALS WERE FILED BY THE ASSE SSEE ON 19/3/2012. THEREFORE, HE FOUND THAT THE APPEALS WERE BELATEDLY FILED. AN APPLICATION WAS FILED FOR CONDONATION OF DELAY. IT WAS SUBMITTED THAT THERE IS A DELAY OF 99 DAYS AND THE MAIN ISSUE INVOLVED IN THE APPEA L IS REGARDING ALLOWABILITY OR ITA NO.2051&2052/MUM/2014 ASST.YEAR 2004-05 & 2009-10 4 OTHERWISE OF DEDUCTION UNDER SECTION 80P OF THE ACT ON INTEREST EARNED ON LOANS GIVEN TO STAFF MEMBERS. IT WAS SUBMITTED THAT INIT IALLY THE ASSESSEE DECIDED NOT TO PREFER ANY APPEAL. HOWEVER, SUBSEQUENTLY IT WAS PO INTED OUT TO THEM THAT IDENTICAL ISSUE IN THE CASE OF BANK OF INDIA STAFF CO-OPERAT IVE CREDIT SOCIETY VIDE ORDER DATED 22/5/2009 IN ITA NO.376/MUM/2007 FOR ASSESSMENT YEA R 2003-04 WAS DECIDED IN FAVOUR OF THE ASSESSEE AS THE ISSUE INVOLVED WAS RE CURRING ISSUE, THE LD. AR OF THE ASSESSEE ADVISED TO FILE AN APPEAL AGAINST LEVY OF THE TAX. ACCORDINGLY, THE APPEALS WERE FILED AND IT WAS REQUESTED THAT DELAY SHOULD B E CONDONED AND APPEAL SHOULD BE ADMITTED. AFTER CONSIDERING SUCH SUBMISSIONS LD. CIT(A) HAS OBSERVED THAT IT IS NOT A FIT CASE FOR CONDONATION OF DELAY. HE FOUND THAT VERIFICATION IN FORM NO.35 WAS SIGNED BY THE SOCIETY ON 2/3/2012, WHEREAS THE APPE AL WAS FILED ON 19/03/2012. HE OBSERVED THAT THERE IS A SUBSTANTIAL TIME GAP B ETWEEN THE DATE OF SIGNING OF THE FORM OF VERIFICATION AND THE DATE OF ACTUAL FILING OF THE APPEAL AND SUCH DELAY HAS NOT BEEN EXPLAINED AND FOR THAT NO REASONS HAS BEEN GI VEN FOR THIS TIME GAP. THUS, LD. CIT(A) HAS DISMISSED BOTH THE APPEALS. LD. CIT(A) HAS NOT DECIDED THE ISSUE RAISED BY THE ASSESSEE ON MERITS AND HAS ALSO NOT CONTROVE RTED TO THE SUBMISSIONS OF THE ASSESSEE THAT SIMILAR ISSUE HAS BEEN DECIDED IN FAV OUR OF THE ASSESSEE IN ANOTHER CASE BY ITAT. 4. ON THESE FACTS I HAVE HEARD LD. DR WHO RELIED UP ON THE ORDER PASSED BY LD. CIT(A). FROM THE ORDER PASSED BY LD. CIT(A) I FOUN D THAT THE REQUEST OF THE ASSESSEE FOR CONDONATION OF DELAY HAS BEEN REJECTED ONLY FOR THE REASON THAT ASSESSEE COULD NOT EXPLAIN THE DELAY BETWEEN THE SIGNING OF THE VE RIFICATION OF APPEAL FORM AND THE ACTUAL DATE OF FILING THE APPEAL. THE CONCERNED GA P IS ONLY OF 16-17 DAYS. IN MY OPINION, SINCE MANY OTHER DOCUMENTS ARE REQUIRED TO BE FILED ALONGWITH APPEAL, THE TIME GAP OF 17 DAYS IS NOT MUCH AS THE STATUTE ITS ELF HAS GIVEN TIME OF 30 DAYS TO THE ASSESSEE TO FILE APPEAL BEFORE LD. CIT(A). KE EPING IN VIEW THIS FACT, I AM OF THE OPINION THAT IT IS A DESERVING CASE WHERE DELAY SHO ULD HAVE BEEN CONDONED BY LD. CIT(A). ACCORDINGLY, I DIRECT LD. CIT(A) TO CONDON E THE DELAY AND DECIDE THE APPEALS FILED BY THE ASSESSEE ON MERITS AFTER GIVING THE AS SESSEE A REASONABLE AND SUFFICIENT OPPORTUNITY OF HEARING. SINCE I AM DIRECTING LD. CIT(A) TO DECIDE THE APPEALS FILED BY THE ASSESSEE ON MERITS I DO NOT EXPRESS ANY OPIN ION ON THE MERITS OF THE ADDITION WHICH HAVE ALSO CHALLENGED BEFORE HIM IN OTHER GROU NDS OF APPEAL. LD. CIT(A) IS, ITA NO.2051&2052/MUM/2014 ASST.YEAR 2004-05 & 2009-10 5 THEREFORE, DIRECTED TO DECIDE THE GRIEVANCES OF TH E ASSESSEE AS PER DIRECTIONS GIVEN IN THE ABOVE PART OF THIS ORDER. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE TREATED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH JUNE, 2014. . & +,- /#0 24/06/2014 , & 6 SD/- (I.P.BANSAL) / JUDICIAL MEMBER MUMBAI; /# DATED : 24 TH JUNE, 2014. VM. . & $(7 87-( . & $(7 87-( . & $(7 87-( . & $(7 87-(/ COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. $% ! / THE RESPONDENT. 3. 9() / THE CIT, MUMBAI. 4. 9 / CIT(A)-13, MUMBAI 5. 7<6 $(# , , / DR, ITAT, MUMBAI 6. 6= > / GUARD FILE. .# .# .# .# / BY ORDER, %7( $( //TRUE COPY// ? ?? ?/ // /@ A @ A @ A @ A (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI