Vyasarpadi Co-op. Industrial Estate Ltd., CHENNAI V. ITO, CHENNAI

ITA 252/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4814 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-03-2017
• Assessment Year: 1996-1997
• Appeal Filed On: 27-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: S SRINIRANJANI
• Keywords: Rectification of order; Opportunity of being heard
• Section: 143(3); 56; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !', $ %& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ ITA NOS.252, 253 & 254/MDS/2017 ) *) / ASSESSMENT YEARS : 1996-97 TO 1998-99 M/S VYASARPADI CO-OP INDUSTRIAL ESTATE LTD., ERUKKENCHERRY HIGH ROAD, VYASARPADI, CHENNAI - 600 039. PAN : AAAAT 5090 L V. THE INCOME TAX OFFICER, WARD XII(4), CHENNAI. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : MS. S. SRINIRANJANI, ADVOCATE ./,- 0 1 / RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT 2 0 3$ / DATE OF HEARING : 21.03.2017 4!* 0 3$ / DATE OF PRONOUNCEMENT : 25.04.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE THREE APPEALS OF THE ASSESSEE ARE DIRECT ED AGAINST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS)-5, CHENNAI, DATED 22.11.2016 AND PERTAIN TO ASSESSMENT YEARS 1996-97, 1997-98 AND 1998-99. SINCE COMMON I SSUE ARISES FOR CONSIDERATION IN ALL THESE APPEALS, WE HEARD TH ESE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON O RDER. 2 I.T.A. NOS.252 TO 454/MDS/17 2. THERE WAS A DELAY OF 2 DAYS IN FILING THESE APPE ALS BY THE ASSESSEE. THE ASSESSEE HAS FILED PETITIONS FOR CON DONATION OF DELAY. WE HAVE HEARD THE LD.COUNSEL FOR THE ASSESS EE AND THE LD. DEPARTMENTAL REPRESENTATIVE. WE FIND THAT THERE WA S SUFFICIENT CAUSE FOR NOT FILING THESE APPEALS BEFORE THE STIPU LATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEA LS. 3. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF INTEREST INCOME EARNED BY THE ASSESSEE ON THE FIXED DEPOSIT MADE WITH TAMIL NADU INDUSTRIAL CO-OPERATIVE BANK LTD. 4. MS. S. SRIRANJANI, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 80P(2)(D) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON THE GROUND THAT THE INTEREST WAS RECEIVED FROM THE FIXED DEPOSIT AND NOT ON THE SECURITIES. ACCORDING TO TH E LD. COUNSEL, THE ASSESSING OFFICER HAS ALSO FOUND THAT THE ASSESSEE IS NOT DOING ANY BANKING BUSINESS. REFERRING TO THE COPY OF CERTIFI CATE SAID TO BE ISSUED BY TAMIL NADU INDUSTRIAL CO-OPERATIVE BANK L TD., THE LD.COUNSEL SUBMITTED THAT THE TAMIL NADU INDUSTRIAL CO-OPERATIVE BANK LTD. WAS REGISTERED AS CO-OPERATIVE SOCIETY UN DER THE TAMIL 3 I.T.A. NOS.252 TO 454/MDS/17 NADU CO-OPERATIVE SOCIETY ACT AND IT IS UNDER THE A DMINISTRATIVE CONTROL OF COMMISSIONER OF INDUSTRIES AND DIRECTOR OF INDUSTRIES AND COMMERCE. REFERRING TO THE JUDGMENT OF HIMACHAL PR ADESH HIGH COURT IN CIT V. KANGRA CO-OPERATIVE BANK LTD. (2009 ) 309 ITR 106, THE LD.COUNSEL SUBMITTED THAT THE HIMACHAL PRADESH HIGH COURT AFTER FOLLOWING THE JUDGMENT OF APEX COURT IN CIT V . NAVANSHAHAR CENTRAL CO-OPERATIVE BANK LTD. (2007) 289 ITR 6, FO UND THAT INTEREST ON SUCH INVESTMENT IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2) OF THE ACT. IN THIS CASE ALSO, ACCORDING TO THE LD. C OUNSEL, A FIXED DEPOSIT WAS MADE BY THE ASSESSEE WITH TAMIL NADU IN DUSTRIAL CO- OPERATIVE BANK LTD., WHICH IS OTHERWISE A CO-OPERAT IVE SOCIETY UNDER THE ADMINISTRATIVE CONTROL OF INDUSTRIES COMMISSION ER AND DIRECTOR OF INDUSTRIES AND COMMERCE, THEREFORE, THE INTEREST INCOME RECEIVED BY THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SEC TION 80P(2)(D) OF THE ACT. THE LD.COUNSEL FURTHER CLARIFIED THAT THE ASSESSEE IS ALSO A CO-OPERATIVE SOCIETY REGISTERED UNDER TAMIL NADU CO -OPERATIVE SOCIETY ACT. IT IS ALSO FUNCTIONING UNDER THE CON TROL OF COMMISSIONER AND DIRECTOR OF INDUSTRIES AND COMMERC E, GOVERNMENT OF TAMIL NADU, HENCE, THE CIT(APPEALS) I S NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER. 4 I.T.A. NOS.252 TO 454/MDS/17 5. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT IN THE ASSESSMENT MA DE UNDER SECTION 143(3) OF THE ACT, THE ASSESSING OFFICER FO UND THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80P(2)(D) OF THE ACT IN RESPECT OF INTEREST INCOME ON THE FIXED DEPO SIT WITH TAMIL NADU INDUSTRIAL CO-OPERATIVE BANK LTD. SUBSEQUENTL Y, THE ASSESSEE FILED PETITION UNDER SECTION 154 OF THE AC T CLAIMING THAT THE INTEREST INCOME IS ELIGIBLE FOR EXEMPTION UNDER SECTION 80P(2)(D) OF THE ACT. THE ASSESSING OFFICER REJECTED THE CLA IM OF THE ASSESSEE ON THE GROUND THAT THERE IS NO RECTIFIABLE ERROR. ON FURTHER APPEAL, THE CIT(APPEALS) FOUND THAT IN A PROCEEDING UNDER SECTION 154 OF THE ACT, THE ASSESSING OFFICER WAS EMPOWERED TO RECTIFY AN ERROR WHICH IS APPARENT ON THE FACT OF THE RECORD. IN THIS CASE, ACCORDING TO THE LD. D.R., ALL THE ISSUES RAISED BY THE ASSESSEE IN A PETITION UNDER SECTION 154 OF THE ACT WERE DULY AND ELABORATELY CONSIDERED BY THE ASSESSING OFFICER AND THE SAME WA S DISALLOWED. THEREFORE, ACCORDING TO THE LD. D.R., THE APPLICATI ON FILED BY THE ASSESSEE UNDER SECTION 154 OF THE ACT IS NOT MAINTA INABLE AT ALL. AT THE BEST, IT MAY BE A GOOD CASE TO APPEAL BEFORE TH E CIT(APPEALS) AGAINST THE ASSESSMENT ORDER. HOWEVER, THERE IS NO RECTIFIABLE ERROR 5 I.T.A. NOS.252 TO 454/MDS/17 IN A PROCEEDING UNDER SECTION 154 OF THE ACT, THERE FORE, THE CIT(APPEALS) HAS RIGHTLY DISMISSED THE APPEAL OF TH E ASSESSEE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, IN A PROCEEDING UNDER SECTION 143(3) OF THE ACT, THE ASS ESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 80P(2)(D) OF THE ACT IN RESPECT OF INTEREST INCOME RECEIVED BY THE A SSESSEE ON THE FIXED DEPOSIT WITH TAMIL NADU INDUSTRIAL CO-OPERATI VE BANK LTD. THE ASSESSEE SUBSEQUENTLY FILED APPLICATION UNDER SECTI ON 154 OF THE ACT ON THE GROUND THAT THERE IS AN ERROR IN THE ORD ER OF THE ASSESSING OFFICER. THE ASSESSING OFFICER AFTER EXAMINING THE MATERIAL AVAILABLE ON RECORD, FOUND THAT THE ISSUE RAISED BY THE ASSESSEE WAS ALREADY EXAMINED BY THE ASSESSING OFFICER IN TH E ASSESSMENT ORDER ITSELF. THEREFORE, THERE IS NO RECTIFIABLE E RROR. THIS OBSERVATION OF THE ASSESSING OFFICER WAS FURTHER CONFIRMED BY T HE CIT(APPEALS). THE QUESTION ARISES FOR CONSIDERATION IS WHETHER TH E DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80P(2)(D) OF THE ACT IS A RECTIFIABLE ERROR IN A PROCEEDING UNDER SECTION 154 OF THE ACT? WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTI ON 154 OF THE ACT WHICH READS AS FOLLOWS:- 6 I.T.A. NOS.252 TO 454/MDS/17 RECTIFICATION OF MISTAKE 154. (1) WITH A VIEW TO RECTIFYING ANY MISTAKE APPARE NT FROM THE RECORD AN INCOME-TAX AUTHORITY REFERRED TO IN SECTIO N 116 MAY, (A) AMEND ANY ORDER PASSED BY IT UNDER THE PROVISIO NS OF THIS ACT ; (B) AMEND ANY INTIMATION OR DEEMED INTIMATION UNDER SUB-SECTION (1) OF SECTION 143. (C) AMEND ANY INTIMATION UNDER SUB-SECTION (1) OF S ECTION 200A. (D) AMEND ANY INTIMATION UNDER SUB-SECTION (1) OF S ECTION 206CB. (1A) WHERE ANY MATTER HAS BEEN CONSIDERED AND DECID ED IN ANY PROCEEDING BY WAY OF APPEAL OR REVISION RELATING TO AN ORDER REFERRED TO IN SUB-SECTION (1), THE AUTHORITY PASSI NG SUCH ORDER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY LAW FOR THE TIME BEING IN FORCE, AMEND THE ORDER UNDER THAT SUB-SECT ION IN RELATION TO ANY MATTER OTHER THAN THE MATTER WHICH HAS BEEN SO CONSIDERED AND DECIDED. (2) SUBJECT TO THE OTHER PROVISIONS OF THIS SECTION, THE AUTHORITY CONCERNED (A) MAY MAKE AN AMENDMENT UNDER SUB-SECTION (1) OF ITS OWN MOTION, AND (B) SHALL MAKE SUCH AMENDMENT FOR RECTIFYING ANY SU CH MISTAKE WHICH HAS BEEN BROUGHT TO ITS NOTICE BY THE ASSESSE E OR BY THE DEDUCTOR OR BY THE COLLECTOR, AND WHERE THE AUTHORI TY CONCERNED IS THE . . . COMMISSIONER (APPEALS), BY THE ASSESSING OFFICER ALSO. (3) AN AMENDMENT, WHICH HAS THE EFFECT OF ENHANCING AN ASSESSMENT OR REDUCING A REFUND OR OTHERWISE INCREA SING THE LIABILITY OF THE ASSESSEE OR THE DEDUCTOR OR THE CO LLECTOR, SHALL NOT BE MADE UNDER THIS SECTION UNLESS THE AUTHORITY CON CERNED HAS GIVEN NOTICE TO THE ASSESSEE OR THE DEDUCTOR OR THE COLLE CTOR OF ITS INTENTION SO TO DO AND HAS ALLOWED 4THE ASSESSEE OR THE DEDUCTOR A REASONABLE OPPORTUNITY OF BEING HEARD. 7 I.T.A. NOS.252 TO 454/MDS/17 (4) WHERE AN AMENDMENT IS MADE UNDER THIS SECTION, A N ORDER SHALL BE PASSED IN WRITING BY THE INCOME-TAX AUTHORITY CON CERNED. (5) WHERE ANY SUCH AMENDMENT HAS THE EFFECT OF REDUC ING THE ASSESSMENT OR OTHERWISE REDUCING THE LIABILITY OF T HE ASSESSEE OR THE DEDUCTOR OR THE COLLECTOR, THE ASSESSING OFFICE R SHALL MAKE ANY REFUND WHICH MAY BE DUE TO SUCH ASSESSEE OR THE DED UCTOR OR THE COLLECTOR. (6) WHERE ANY SUCH AMENDMENT HAS THE EFFECT OF ENHAN CING THE ASSESSMENT OR REDUCING A REFUND ALREADY MADE OR OTH ERWISE INCREASING THE LIABILITY OF THE ASSESSEE OR THE DED UCTOR OR THE COLLECTOR, THE ASSESSING OFFICER SHALL SERVE ON THE ASSESSEE OR THE DEDUCTOR OR THE COLLECTOR, AS THE CASE MAY BE A NOT ICE OF DEMAND IN THE PRESCRIBED FORM SPECIFYING THE SUM PAYABLE, AND SUCH NOTICE OF DEMAND SHALL BE DEEMED TO BE ISSUED UNDER SECTION 1 56 AND THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDINGLY. (7) SAVE AS OTHERWISE PROVIDED IN SECTION 155 OR SUB-S ECTION (4) OF SECTION 186, NO AMENDMENT UNDER THIS SECTION SHALL BE MADE AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE FINANCI AL YEAR IN WHICH THE ORDER SOUGHT TO BE AMENDED WAS PASSED. (8) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECTI ON (7), WHERE AN APPLICATION FOR AMENDMENT UNDER THIS SECTION IS MAD E BY THE ASSESSEE OR BY THE DEDUCTOR OR BY THE COLLECTOR ON OR AFTER THE 1ST DAY OF JUNE, 2001 TO AN INCOME-TAX AUTHORITY REFERRED T O IN SUB- SECTION (1), THE AUTHORITY SHALL PASS AN ORDER, WIT HIN A PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLI CATION IS RECEIVED BY IT, (A) MAKING THE AMENDMENT ; OR (B) REFUSING TO ALLOW THE CLAIM. 7. UNDER SECTION 154 OF THE ACT, THE ASSESSING OFFI CER CAN RECTIFY AN ERROR WHICH IS APPARENT ON THE FACE OF T HE RECORD. IN THE CASE BEFORE US, THE ASSESSING OFFICER DEALT WITH TH E CLAIM OF THE 8 I.T.A. NOS.252 TO 454/MDS/17 ASSESSEE IN THE REGULAR ASSESSMENT MADE UNDER SECTI ON 143(3) OF THE ACT. THE PROCEEDING UNDER SECTION 154 OF THE A CT IS ONLY TO RECTIFY AN ERROR WHICH IS APPARENT ON THE FACE OF T HE RECORD AS RIGHTLY OBSERVED BY THE CIT(APPEALS). WHEN THERE WAS CONTR OVERSY WHICH REQUIRES A COMPLICATED PROCESS OF INVESTIGATION, IT IS NOT PERMISSIBLE FOR RECTIFICATION UNDER SECTION 154 OF THE ACT. IN OTHER WORDS, WHAT CAN BE RECTIFIED UNDER SECTION 154 OF THE ACT IS ON LY AN ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD. IN THE CASE BEFORE US, THE ISSUE RAISED BY THE ASSESSEE WAS ALREADY DEALT WITH BY THE ASSESSING OFFICER IN THE REGULAR ASSESSMENT UNDER S ECTION 143(3) OF THE ACT. THEREFORE, IT CANNOT BE SAID THERE IS A PRIMA FACIE ERROR IN THE ORDER OF THE ASSESSING OFFICER. AS RIGHTLY SUBMITTED BY THE LD. DEPARTMENTAL REPRESENTATIVE, AT THE BEST, THERE MAY BE A GOOD CASE FOR THE ASSESSEE FOR AN APPEAL BEFORE THE CIT( APPEALS) AGAINST THE ASSESSMENT ORDER. HOWEVER, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THERE IS NO MERIT IN THE AP PLICATION FILED BY THE ASSESSEE UNDER SECTION 154 OF THE ACT. IN OTHE R WORDS, THE ISSUE RAISED BY THE ASSESSEE CANNOT BE ADJUDICATED IN A PROCEEDING UNDER SECTION 154 OF THE ACT. IN VIEW OF THIS, THI S TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 9 I.T.A. NOS.252 TO 454/MDS/17 8. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE DISMISSED. ORDER PRONOUNCED ON 25 TH APRIL, 2017 AT CHENNAI. SD/- SD/- ( !' ) ( . . . ) (SANJAY ARORA) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 25 TH APRIL, 2017. KRI. 0 .378 98*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 :3 () /CIT(A)-5, CHENNAI-34 4. PRINCIPAL CIT-9, CHENNAI 5. 8; .3 /DR 6. ) < /GF.