THE BHARAT COOPERATIVE BANK (MUMBAI) LTD, MUMBAI V. ADDL CIT RG 1(1), MUMBAI

ITA 2294/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3525 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 21-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Bad and doubtful debts; Revised return
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH, MUMBAI BEFORE SHRI G. S. PANNU , A M AND SHRI R AVISH SOOD , J M I.T.A. NO. 2294 /MUM/201 5 ( ASSESSMENT YEAR: 200 9 - 10 ) THE BHARAT COOPERATIVE BANK LTD. 64/72 MODY STREET, FORT, MUMBAI - 4000 01 / VS. ADDL. CIT RG 1 ( 1 ) MUMBAI 400020 ./ ./ PAN/GIR NO. : AA AAT0030E ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 28 .0 7 .2016 /DATE OF PRONOUNCEMENT: 1 9 .08.2016 O R D E R PER RAVISH SOOD, JM : TH E PRESENT APPEAL FILED BY THE ASSESSEE COMPANY PERTAINING TO ASSESSMENT YEAR 2009 - 10 IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 2 MUMBAI DATED 2 1.0 1.201 5 , WHICH IN T U RN HA S ARISEN OUT OF THE ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO) U/S 143(3) OF THE INCOME TAX ACT 1961, (IN SHORT THE ACT) DATED 0 1.12.2011 . 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE COMPANY READ AS UNDER: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (A) ERRED IN DISMISSING THE APPEAL BY OVERLOOKING THE FACT THAT THERE WAS NO MANAGING DIRECTOR DURING THE PERIOD IN WHICH THE APPEAL WAS SIGNED ASSESSEE BY: SHRI BHUPENDRA SHAH , AR DEPARTMENT BY: SHRI JAVED AKHTAR, DR I.T.A. NO.2294/MUM/2015) 2 AND FILED AND ALSO DISREGA RDING THE RESOLUTION AND CLARIFICATION GIVEN IN THIS REGARD. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED IN ADDING RS.6,98,043/ - OUT OF PROVISION FOR BAD AND DOUBTFUL DEBTS EVEN THOUGH THE SAME IS CREATED A S PER RBI NORMS. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED IN DISALLOWING RS.15,32,997/ - U/S 36(1)(VA) R.W.S. 2(24)(X) IN RESPECT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO PF EVEN THOUGH MADE WITHI N GRACE PERIOD ALLOWED UNDER RELEVANT ACTS. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED IN ADDING RS.375887/ - BY WAY OF UNEXPLAINED CASH CREDIT EVEN THOUGH THE SAID SUMS ARE REFUNDABLE. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED IN ADDING RS.60878/ - LYING IN SUSPENSE A/C TREATING SAME AS UNEXPLAIN CASH CREDIT. 6. THE ASSESSING OFFICER ALSO ERRED IN INITIATING PENALTY U/S 271(1)(C) AND CHARGING INTEREST U/S 234B & C. 7. THE COMMISSIONER OF INCOME TAX (A) ERRED IN DISMISSING THE APPEAL WITHOUT DECIDING THE GROUNDS. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WHICH IS A MULTI STATE SCHEDULED URBAN COOPERATIVE BANK MAINLY ENGAGED IN BANKING BUSINESS, HAD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 39,32,69,150/ - AS ON 27.09.2009, WHICH THEREAFTER WAS REVISED AT RS. 38,39,61,920/ - BY WAY OF A REVISED RETURN OF INCOME FILED ON 19.03.2010. THE CASE OF THE A SSESSEE COMPANY WAS TAKEN UP FOR SCRUTINY PROCEEDINGS , WHEREIN THE AO AFTER MAKING THE FOLLOWING ADDITIONS/DISALLOWANCE S: SR. N O. PARTICULARS AMOUNT(RS.) 1. EXCESS CLAIM OF DEDUCTION U/S 36(1)(VIIA) RS. 6,98,043/ - I.T.A. NO.2294/MUM/2015) 3 2. DISALLOWANCE U/S 36(1)(VA) R.W.S. 2(24)(X) RS. 15,32,997/ - 3. UNDISCLOSED RECEIPTS RS. 3,75,887/ - 4. ADDITION ON ACCOUNT OF SUSPENSE A/C RS. 60,878/ - TOTAL RS 26,67,805/ - , ASSESSED THE TOTAL INCOME AT RS. 38,66,29,720/ - . 4. THE ASSESSEE COMPANY BEING AGGRIEVED WITH THE ASSESSMENT SO FRAME D, FILED AN APPEAL WITH THE CIT(A) - 2 MUMBAI AS ON 06.01.2012, WHEREIN THE M EMORANDUM OF APPEAL WAS SIGNED BY ONE SHRI C. R. MULKY, CHIEF GENERAL MANAGER OF THE ASSESSEE COMPANY. THAT DURING THE COURSE OF HEARING OF THE APPEAL, THE CIT (A) BEING OF THE VIEW THAT AS THE APPEAL FILED BY THE ASSESSEE COMPANY WAS NOT SIGNED BY ITS MANAGING DIRECTOR, AS REQUIRED U/S 249 R.W . RULE 45 OF THE I NCOME TAX RULES , 1962, THE SAME THUS BEING NON EST IN THE EYES OF LAW COULD NOT BE ENTERTAINED, THEREFORE DISMISS ED THE APPEAL AT THE VERY THRESHOLD . 5. THE ASSESSEE COMPANY ASSAILING BOTH THE DECLINING ON THE PART OF THE CIT(A) TO ENTERTAIN ITS APPEAL, AS WELL AS THE ADDITIONS MADE BY THE A.O . ON MERITS WHICH IN LIGHT OF DISMISSAL OF THE APPEAL I N LIMINE HAD NOT BEEN ADVERTED TO AND ADJUDICATED UPON BY THE CIT(A), HAD PREFERRED THE PRESENT APPEAL BEFORE US. 5.1. DURING THE COURSE OF HEARING OF THE APPEAL IT WAS SUBMITTED BY THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSE E COMPANY (FOR SHORT A .R) THAT AS THE MA NAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER OF THE ASSESSEE COMPANY SHRI BHASKAR K. AMIN WAS TO RETIRE ON 31 ST JANUARY, 2012 ON ATTAINING SUPERANNUATION AND SHRI C . R. MULKY WHO WAS THE C HIEF GENERAL MANAGER OF THE ASSESSEE COMPANY WAS TO BE APPOINTED AS THE MANAGING DIRECTOR W.E.F 01 ST , I.T.A. NO.2294/MUM/2015) 4 FEBRUARY, 2012, THEREFORE PURSUANT TO THE BOARD RESOLUTION DATED 17 TH OCTOBER , 2011 , IT WAS RESOLVED THAT DURING THE PERIOD SH. BHASKAR K. AMIN WOULD BE ON LEAVE OR REMAIN ABSENT TILL HIS RETIREMENT ON 31.01.2012, THE POWERS AND DUTIES AS THAT OF THE CHIEF EXECUTIVE OFFICER OF THE ASSESSEE COMPANY WOULD BE EXERCISED BY SH. C.R MULKY. IT WAS SUBMITTED BY THE LD. A.R THAT AS THE MANAGING DIRECTOR SH. BHASKAR K. AMIN WAS NOT AVAILABLE AT THE RELEVANT PO INT OF TIME WHEN THE APPEAL OF THE ASSESSEE COMPANY FOR THE YEAR UNDER CONSIDERATION WAS TO BE FILED WITH THE CIT(A) - 2, MUMBAI , THEREFORE THE SAME WAS SIGNED AND VERIFIED BY SH. C.R MULKY WHO WAS DULY AUTHORIZED BY THE ASSESSEE COMPANY TO EXERCISE SUCH POWERS DURING THE ABSENCE OF THE MANAGING DIRECTOR. THE LD. A.R IN ORDER TO FORTIFY THE AFORESAID FACTUAL POSITION , THEREIN DREW OUR ATTENTION TO THE EXTRACT OF THE MINUTES OF THE BOARD MEET ING HELD ON 17 TH OCTOBER, 2011, AS PER WHICH SH . C.R. MULKY WAS DULY AUTHORISED TO EXERCISE THE POWERS AND DUTIES OF THE CHIEF EXECUTIVE OFFICER DURING THE PERIOD WHEN SH . BHASKAR K. AMIN WOULD BE ON LEAVE OR REMAIN ABSENT TILL HIS RETIREMENT ON 31 ST JANUA RY, 2012 . THE LD. A.R FURTHER TOOK US THROUGH AN A FFIDAVIT OF SH. C.R . MULKY , DATED 16 TH JANUARY, 2015 , WHEREIN IT WAS CLEARLY DEPOSED BY HIM THAT PURSUANT TO THE BOARD RESOLUTION DATED. 17.10.2011 , HE WAS DULY AUTHORIZED BY THE ASSESSEE COMPANY TO FILE LETTERS, DOCUMENTS AND APPEAL PAPERS WITH THE INCOME TAX DEPARTMENT PERTAINING TO A.Y. 2009 - 10 . IN THE BACKDROP OF THE AFORESAID FACTS , IT WAS SUBMITTED BY THE LD. A . R THAT AS SH. C.R MULKY STOOD VESTE D WITH THE REQUISITE AUTHORITY TO FILE THE APPEAL WITH THE CIT(A), THEREFORE THE APPEAL SO FILED BY THE ASSESSEE COMPANY WHICH WAS I.T.A. NO.2294/MUM/2015) 5 SIGNED AND VERIFIED BY SH. C.R MULKY WAS WELL IN ORDER AND AS PER THE MANDATE OF LAW . IT WAS THUS SUBMITTED BY THE LD. A.R TH AT AS THE CIT(A) BY DISREGARDING THE RESOLUTION AND CLARIFICATION GIVEN BY THE ASSESSEE COMPANY AS REGARDS THE ISSUE UNDER CONSIDERATION HAD FAILED TO APPRECIATE THE FACTUAL POSITION IN THE RIGHT PERSPECTIVE , AND RATHER O N THE BASIS OF PERVERSE FACTS HAD DRAWN SELF SUITING ADVERSE INFERENCES AS REGARDS THE MAINTAINABILITY OF THE APPEAL FILED BY THE ASSESSEE COMPANY AND DISMISS ED THE SAME AT THE VERY THRESHOLD, THEREFORE THE ORDER OF THE CIT(A) WAS LIABLE TO BE SET ASIDE. 5.2. THE LD. DEPARTMENTAL REPRESEN TATIVE FOR THE REVENUE (FOR SHORT D.R) REBUTTING THE CONTENTIONS OF THE ASSESSEE COMPANY THEREIN RELIED UPON THE ORDER OF THE CIT(A) AND SUBMITTED THAT AS THE M EMORANDUM OF APPEAL WAS NOT SIGNED BY A DULY AUTHORISED PERSON , THEREFORE THE CIT(A) HAD RIG HTLY DECLINED TO ENTERTAIN THE APPEAL AND DISMISSED THE SAME IN LIMINE. THE LD. D .R THUS SUBMITTED THAT THE ORDER OF THE CIT(A) MAY BE SUSTAINED AND THE APPEAL OF THE ASSESSEE COMPANY BE DISMISSED. 6 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF EITHER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD, INCLUDING THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE GENESIS OF THE ISSUE INVOLVE D IN THE PRESENT APPEAL REVOLVES AROUND THE FACT AS TO WHETHER THE MEMORANDUM OF APPEAL FILED BY THE ASSESSEE COMPANY WITH THE CIT(A) - 2, MUMBAI, HAD BEEN SIGNED AND VERIFIED BY A DULY AUTHORISED PERSON OR NOT. WE ARE IN AGREEMENT WITH THE OBSERVATION OF THE CIT(A) THAT THERE CANNOT BE ANY ESCAPE AS REGARDS CARRYING OUT COMPLIANCE OF I.T.A. NO.2294/MUM/2015) 6 THE STATUTORY REQ UIREMENT OF SIGNING AND VERIFICATION OF THE MEMORANDUM OF APPEAL BY AN AUTHORISED PERSON IN TERMS OF S ECTION 249 OF THE ACT R.W. RULE 45 OF THE I.T. RULES, 1962, AS IT IS ONLY ON FILING O F A VALID APPEAL WHICH IS SIGNED AND VERIFIED BY A DULY AUTHORISED PE RSON AS REQUIRED UNDER LAW THAT THE PROCESS OF APPEAL IS SET INTO MOTION. HOWEVER, WE FIND THAT THE CIT(A) AFTER ARRIVING AT THE AFORESAID OBSERVATION AND THEREIN CONCLUDING THAT THE APPEAL IN THE PRESENT CASE, AS REQUIRED UNDER SECTION 249 R.W RULE 45 WAS STATUTORILY REQUIRED TO BE SIGNED AND VERIFIED BY THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY , HAD THEREAFTER HUS H ED THROUGH THE MATTER AND LOST SI GHT OF THE FACT THAT AT THE RELEVANT POINT OF TIME WHEN THE APPEAL WAS SIGNED AND FILED, I.E. AS ON 05.01.2012 AND 06.01.2012, RESPECTIVELY, DUE TO UNAVAILABILITY OF THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY, THE SAME WAS SIGNED AND VERIFIED BY S H . C . R . MULKY , WHO PURSUANT TO THE RESOLUTION PASSED BY THE BOARD OF DIRECTORS AS ON 17 TH OCTOBER 2011 WAS DULY VESTED WITH THE POWERS OF THE C HIEF EXECUTIVE OFFICER DURING THE PERIOD WHEN SHRI BHASKAR K. AMIN, MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER, WAS ON LEAVE OR REMAINED ABSENT TILL HIS RETIREMENT O N 31 ST JANUARY 2012. THUS, IN THE LIGHT OF AFORESAID FACT S AS THEY SO REMAIN , WE ARE OF THE CONSIDERED VIEW THAT THE APPEAL FILED BY THE ASSESSEE COMPANY WAS DULY SIGNED AND VERIFIED BY AN AUTHORISED PERSON AS REQUIRED IN LAW AND THE CIT(A) HAD ERRED IN DECLINING TO ENTERTAIN THE APPEAL OF THE ASSESSEE COMPANY AND THUS WRONGLY DISMISSED THE SAME . WE THUS IN LIGHT OF THE AFORESAID FACTS RESTORE THE APPEAL TO THE FILE OF THE CIT(A) WITH A DIRECTION THAT THE SAME BE ADMITTED AND DISPOSED OF ON MERITS AFTER AFFORDING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE I.T.A. NO.2294/MUM/2015) 7 COMPANY. THUS THE G ROUND OF APPEAL NO. 1 RAISED BY THE ASSESSEE COMPANY IS ALLOWED. THAT AS WE HAVE RESTORED THE APPEAL TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION, WITH A SPECIFIC DIRECTION TO DISPOSE OF THE SAME ON MERITS , THEREFORE WE DO NOT DEEM IT FIT FOR ADVERTING TO GROUND S OF APPEAL NO. 2 TO 7 WHEREIN THE ASSESSEE COMPANY HAD ASSAILED BEFORE US THE ADDITIONS MADE BY THE A.O ON MERITS. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST, 2016. SD/ - SD/ - ( G. S. PANNU ) ( R AVISH SOOD ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 19 TH AUGUST, 2016 AKV / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / /(DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI