+DCIT CC- 7(2), MUMBAI V. SAHEBRAO DESHMUKH CO.OP. BANK LTD., MUMBAI

ITA 2478/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2564 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 28-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency; Tax effect; Difference of opinion; Tax effect; Change of opinion
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G”, MUMBAI BEFORE SHRI PRASHANT MAHARSHI (ACCOUNTANT MEMBER) & KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 2478/MUM/2021 (A.Y.2014-15) Deputy Commissioner of Income- tax, Central Circle-7(2), Mumbai Room No.655, Aayakar Bhavan M.K. Road, Mumbai-400 020 vs M/s Sahebrao Deshmukh Co-op. Bank Ltd, 103, Trade Corner Society Sakinaka Junction, Andheri East Mumbai-400 072 PAN : AABAT4669A APPELLANT RESPONDENT Assessee represented by Shri Satish Modi Department represented by Shri Hoshang B Irani (DR) Date of hearing 23/05/2022 Date of pronouncement /07/2022 ORDER Per Kavitha Rajagopal (JM): This appeal has been filed by the Revenue as against the order of Ld.CIT(A) under section 250 of the I.T. Act, 1961 pertaining to assessment year 2014-15. The grounds of appeal are as follows:- “1. Whether on the facts and the circumstances of the case and in law, the Ld.CIT(A) has erred in deciding the reopening was initiated by Assessing Officer on change of opinion ignoring the fact that reopening can be done on the reasons relevant to subjective opinion and not conclusive findings. 2. Whether on the facts and the circumstances of the case and in law, the Ld CIT(A) has erred in deciding that the notice under section 148 of the Act is void ab initio and hence passed is null and void. 3. Whether on the facts and the circumstances of the case and in law, the Ld CIT(A) has failed to discuss the merits of the case wherein the assessee had 2 ITA No. 2478/MUM/2021 claimed Rs. 90,72,553 in the Profit and Loss Account which is not allowable as business expense. 4. On the facts and circumstances of the case and in law, the appeal is being filed in this case, even though the tax effect involved in this case is below monetary limit (Tax effect. 88,149) considering that issue involved is covered by exceptions as listed in para 10(e) of Board's Circular no. 3 of 2018 as amended by Board's letter F.NQ.279/Misc. 142/20Q7-ITJ dated 20.08.2018.” 2. The brief facts of the case are that the assessee is a co-operative bank which had acquired the Shahupuri Nagari Sahakari Bank Ltd with effect from 25/04/2009 falling under the assessment year 2010-11. According to the Assessing Officer, the assessee took over more liability than assets of Shahupuri Nagari Sahakari Bank Ltd wherein the excess liability of Rs.4,53,62,781/- was claimed as goodwill / excess loss paid by the bank and claimed to set off 1/5 th of the same from year to year. The assessee had amortised the said liability and claimed deduction in 5 equal instalments amounting to Rs.90,72,577/- from A.Y. 2010-11 onwards. The assessee’s claim for the impugned year for Rs.90,72,577/- was allowed in the original assessment order dated 23/12/2016. The case was subsequently reopened under section 147 by issue of notice under section 148. The impugned claim was disallowed in an order passed under section 143(3) read with section 147 of the Act on the ground that it was not an allowable business expense. Aggrieved by the said order, the assessee was in appeal before the Ld.CIT(A) – (1) against the reopening of the assessment; and (2) against the addition / disallowance of claim on the ground that the reopening was merely on a change of opinion and that the disallowance was made by not following the rule of consistency. The Ld.CIT(A) held that the reopening was bad in law and as a consequence, held the assessment order as null and void. The revenue 3 ITA No. 2478/MUM/2021 has challenged the said order before us on the ground that the reopening can be done on reasons relevant to subjective opinion and not conclusive findings and also on the ground that the addition was deleted not on merits, but on holding that the notice under section 148 was void ab initio. 3. During the appellate proceedings, the Ld.DR relied on the order of Assessing Officer and contended that the appeal of the assessee would not fall under the low tax effect as it was covered by the exceptions as listed at para 10(e) of the Board’s circular Circular No. 17/2019 vide F.No. 279/Misc.142/2007-ITJ(Pt.) dated 08.08.2019. 4. The Ld.AR, on the other hand, contended that the assessee’s case would be covered under the low monetary limit as the tax effect is Rs.88,149/-. The Ld.AR further stated that the department did not receive any information from any source, whatsoever may be, but the reopening was merely pursuant to a change of opinion by the Assessing Officer. The Ld.AR relied on the decision of the Ld.CIT(A). 5. Having heard both the learned representatives and perused the materials on record, it is observed that the assessee has claimed the said deduction and was allowed consistently in the earlier assessment year, i.e. 2011-12, 2012-13 and 2013-14. Even in the impugned assessment year it is found that the said claim was allowed in the original assessment order. It is also evident that the assessee’s case would fall under the low tax effect under Circular No. 17/2019 vide F.No. 279/Misc.142/2007-ITJ(Pt.) dated 08.08.2019. It is pertinent to point out that the department has not produced any evidence before us to substantiate that the assessee’s case would be covered under the exception provided at para 10(e) of the circular mentioned above. We are also of the considered opinion that even while perusing the records, that are placed 4 ITA No. 2478/MUM/2021 before us, we do not find any justification in holding that the assessee’s case would be covered under the exception provided in Circular No. 17/2019 vide F.No. 279/Misc.142/2007-ITJ(Pt.) dated 08.08.2019. From the above observation, we find that the assessee’s case will fall under the monetary limit of Rs.50 lakhs and would be covered under the low tax effect vide Circular No. 17/2019 vide F.No. 279/Misc.142/2007-ITJ(Pt.) dated 08.08.2019 thereby dismissing it on low tax effect without adjudicating it on merits. Liberty is given to the Revenue to recall this order, if there is any evidence / material before them to show otherwise. 6. In the result, appeal filed by the Revenue is dismissed. Order pronounced in the open Court on _____July, 2022. (PRASHANT MAHARSHI) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: /07/2022 Pavanan 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 5 ITA No. 2478/MUM/2021 Date Initial 1. Draft dictated on 26/07/2022 Sr.PS 2. Draft placed before author 26/07/2022 Sr.PS 3. Draft proposed & placed before the second member JM/AM 4. Draft discussed/approved by Second Member. JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. File sent to the Bench Clerk Sr.PS 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed Yes