The Dy. Commissioner of Income-tax, Jammu V. The Citizen Cooperative Bank Ltd, Jammu

ITA 253/ASR/2012

• Counselvise Citation: 25320914 RSA 2012
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R L GUPTA
• Keywords: Procedural lapse; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.253(ASR)/2012 ASSESSMENT YEAR:2007-08 PAN :AAABT0043J DY. COMMR. OF INCOME TAX, VS. THE CITIZEN COOPERATI VE BANK LTD. CIRCLE-1, JAMMU. GANDHI NAGAR, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. TARSEM LAL, DR RESPONDENT BY:SH. R.L. GUPTA, ADV. DATE OF HEARING:03/10/2012 DATE OF PRONOUNCEMENT:09/10/2012 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), JAMMU, DATED 16.03.2012 FOR THE ASSESSMENT YEAR 24. 12.2009. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING ADDITIONAL ALLOWANCE OF 10% OF TH E AGGREGATE ADVANCES ON RURAL DEPOSITS WHEN NO CLAIM FOR SUCH A LLOWANCE HAS BEEN MADE IN RETURN OF INCOME BY THE ASSESSEE BUT HAVE B EEN MADE ONLY DURING THE COURSE OF ASSESSMENT, BY RELYING UPON T HE DECISION OF NON JURISDICTIONAL MUMBAI BENCH IN THE CASE OF M/S. CHI CAGO PNEUMATIC LTD. ITA NO.253(ASR)/202 2 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN ALLOWING ADDITIONAL ALLOWANCE OF 10% OF TH E AGGREGATE ADVANCES ON RURAL DEPOSITS WHEN NO CLAIM FOR SUCH A LLOWANCE HAS BEEN MADE IN RETURN OF INCOME BY THE ASSESSEE BUT HAVE B EEN MADE ONLY DURING THE COURSE OF ASSESSMENT. THE DECISION OF HO NBLE SUPREME COURT OF INDIA IN THE CASE OF M/S. GOETZE (INDIA) L TD. REPORTED IN 284 ITR 323 RELIED UPON THE A.O. WHEREIN IT HAS BEEN HE LD THAT THE CLAIM FOR DEDUCTION BY WAY OF APPLICATION CANNOT BE ENTER TAINED BY THE AO AND AO CANNOT ENTERTAIN CLAIM FOR DEDUCTION OTHERWI SE THAN BY FILING A REVISED RETURN. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN ALLOWING ADDITIONAL ALLOWANCE OF 10% OF TH E AGGREGATE ADVANCES ON RURAL DEPOSITS WHEN NO CLAIM FOR SUCH A LLOWANCE HAS BEEN MADE IN RETURN OF INCOME BY THE ASSESSEE BUT HAVE B EEN MADE ONLY DURING THE COURSE OF ASSESSMENT BUT HAVE BEEN MADE ONLY DURING THE COURSE OF ASSESSMENT BY SURPASSING THE DECISION OF HONBLE APEX COURT IN THE CASE OF M/S. GOETZE (INDIA) LTD. REPOR TED IN 284 ITR 323 BUT RELYING UPON THE DECISION OF NON JURISDICTIONAL ITAT BENCH MUMBAI IN THE CASE OF M/S. CHICAGO PNEUMATIC LTD. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME ON 15.11.2007 DECLARING AN INCOME AT RS.31,8 0,861/-. THE ASSESSEE IS A COOPERATIVE SOCIETY ENGAGED IN BANKING BUSINES S. A REVISED RETURN WAS FILED ON 31.03.2009 DECLARING INCOME OF RS.55,46,70 5/-. IN THE REVISED RETURN, THE ASSESSEE CLAIMED PROVISION FOR NPA AT R S.1,04,70,000/- U/S 36(1)(VIIA) OF THE ACT AS PER SUBMISSIONS MADE BEFO RE THE A.O. THE ASSESSEE IN HIS SUBMISSIONS HAD CLAIMED THIS AMOUNT WHEREAS, AS PER ITS OWN CALCULATIONS 7.5% OF TOTAL INCOME WAS RS.119.56 LAC S. THE AO APPLYING THE PROVISION OF SECTION 36(1)(VIIA) ALLOWED THE CLAIM OF 7.5% ON RS.1,60,16,705/- ( I.E. NET PROFIT RS.55,46,705 + P ROVISION FOR NPA) I.E. TO ITA NO.253(ASR)/202 3 THE TUNE OF RS.12,01,253/-. ON THE CLAIM OF ADDITIO NAL ALLOWANCE OF 10% OF THE AGGREGATE ADVANCES ON RURAL DEPOSITS, THE AO HE LD THAT THIS CLAIM WAS MADE ONLY DURING THE COURSE OF ASSESSMENT, THE SAME CANNOT BE CONSIDERED IN VIEW OF THE DECISION OF HONBLE S.C. IN THE CASE OF GOETZE (INDIA) LTD. 284 ITR 323 WHEREIN IT WAS HELD THAT THE CLAIM FOR DEDUCTION NOT MADE IN THE RETURN CANNOT BE ENTERTAINED BY THE AO OTHERWIS E THAN BY FILING A REVISED RETURN. HE, HOWEVER, HELD ON MERITS THAT OUT OF THR EE BRANCHES CLAIMED AS RURAL BRANCHES ONLY ONE I.E. AT VIJAYPUR QUALIFIED AS A RURAL BRANCH AND TWO OTHER BRANCHES I.E. AT R.S. PURA AND AKHNOOR COULD BE TREATED AS URBAN BRANCHES IN VIEW OF EXPLANATION (IA) TO SECTION 36( 1)(VIIA) OF THE I.T. ACT. 4. THE LD. CIT(A) ALLOWED THE RELIEF AS PER HIS ORD ER VIDE PARA 5 TO 9. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) AS REGAR DS THE PROVISION OF NPA OF RS.1,04,70,000/-. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE HAD CLAIMED THE SAID PROVISION IN THE REVISED RETUR N, WHICH HAS BEEN PLACED ON RECORD BY THE LD. COUNSEL FOR THE ASSESSEE AND C OPY GIVEN TO THE LD. DR, WHICH HAS NOT BEEN OBJECTED TO. THEREFORE, THE ARGU MENTS OF THE LD. DR THAT THE SAID CLAIM OF NPA HAS NOT BEEN CLAIMED IN THE REVISED RETURN IS NOT ACCEPTABLE, SINCE THE SAME IS APPEARING IN THE ORDE R OF THE LD. CIT(A) VIDE PARA 5 OF HIS ORDER. AS REGARDS THE CLAIM OF 10% OF AGGREGATE OF RURAL ITA NO.253(ASR)/202 4 ADVANCES, THE FINDINGS OF THE LD. CIT(A) VIDE PARA 6 TO 9 WHERE THE LD. CIT(A) HAS FOLLOWED THE DECISION OF M/S. CHICAGO PN EUMATIC (I) LTD. OF (ITAT, MUMBAI BENCH, IS REPRODUCED FOR THE SAKE OF CLARITY AS UNDER: AS FAR AS THE DECISION OF THE HONBLE APEX COURT I N THE CASE OF GOETZE (INDIA) LTD. (SUPRA) IS CONCERNED, THERE IS NO DISPUTE THAT THE SAME IS BINDING ON EVERYBODY CONCERNED. IN THE SAID DECISION, THE HONBLE APEX COURT HAS ALSO RULED THAT TRIBUNAL MAY ADJUDICATE THE ISSUE IF A CLAIM IS MADE BY ANY PARTY SUBJECT TO SA TISFACTION OF PRESCRIBED RULES, HENCE, EVEN THE HONBLE APEX COU RT HAS NOT BARRED THE ASSESSEE RAISE ITS LEGAL CLAIM BEFORE APPELLAT E AUTHORITIES. HOWEVER, SUCH PROCESS WOULD RESULT INTO UNDUE HARDS HIPS, DELAY AND MULTIPLICITY OF PROCEEDINGS, THE HONBLE APEX COURT , ON NUMEROUS OCCASIONS HAS LAID THE PROPOSITION THAT THE ASSESSI NG AUTHORITIES ARE BOUND TO COMPUTE THE CORRECT INCOME ONLY AND COLLEC T ONLY LEGITIMATE TAX, HENCE, MERELY FOR A PROCEDURAL LAPSE OR TECHNI CALITIES, IN OUR OPINION, THE ASSESSEE SHOULD NOT BE COMPELLED TO P AY MORE TAX THAN WHAT IS DUE FROM HIM. THEREFORE, THIS SITUATION HAS NECESSARILY TO BE LOOKED UPON FROM THE ANGLE OF DUTIES OF ASSESSING A UTHORITIES AS STATED EARLIER, CBDT IS THE APEX BODY FOR TAX ADMINISTRATI ON AND IT CAN ALSO ISSUE DIRECTIONS WHICH ARE FOR THE BENEFIT OF THE A SSESSEES THOUGH SUCH DIRECTIONS MAY NOT BE IN CONSONANCE WITH THE P ROVISIONS OF LAW, HENCE, IF A CIRCULAR IS NOW ISSUED DIRECTING THE AS SESSING AUTHORITIES TO GRANT RELIEFS/REFUNDS WHILE COMPLETING THE ASSESSME NT PROCEEDINGS, EVEN THOUGH SUCH CIRCULAR MAY BE AT VARIANCE WITH T HE LAW, AS PRONOUNCED BY THE HONBLE SUPREME COURT, BUT THE SA ME WOULD BE BINDING ON THE SUBORDINATE IT AUTHORITIES. IN OUR O PINION, THEREFORE, CIRCULARS OF SAME NATURE WHICH HAVE BEEN ALREADY IS SUED WOULD NOT BECOME IRRELEVANT OR CAN BE IGNORED. ADMITTEDLY, TH E CIRCULAR ISSUED IN 1995 HAS NOT BEEN WITHDRAWN; HENCE, IT HAS GOT B INDING FORCE ON THE SUBORDINATE AUTHORITIES EVEN AS ON DATE. ACCORD INGLY, WE HOLD THAT THE AO IS BOUND TO ASSESS THE CORRECT INCOME AND FO R THIS PURPOSE, THE AO MAY GRANT RELIEFS/REFUNDS SUO MOTO CAN DO SO ON BEING POINTED OUT BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEED INGS FOR WHICH ASSESSEE HAS NOT FILED REVISED RETURN, ALTHOUGH, AS PER LAW, THE ASSESSEE IS REQUIRED TO FILE THE REVISED RETURN. HA VING STATED SO, IN OUR VIEW, THE LD. CIT(A). HAVING CO-TERMINUS POWERS WIT H THE POWERS OF AO AND THE FACT THAT APPELLATE PROCEEDINGS ARE THE CONTINUATION OF ORIGINAL PROCEEDINGS, SHOULD HAVE ENTERTAINED THE C LAIM OF ASSESSEE ITA NO.253(ASR)/202 5 AND ALLOWED IF OTHER CONDITIONS OF THE PROVISIONS O F THE LAW WERE SATISFIED. IN THIS VIEW OF THE MATTER, WE ACCEPT BO TH THE GROUNDS OF THE ASSESSEE AND DIRECT THE LD. CIT(A) TO CONSIDER THE CLAIM OF THE ASSESSEE AT THE REVISED FIGURES ON MERITS AND DECID E THE SAME ACCORDING TO THE PROVISIONS OF SECTIONS 80HH AND 80 -I OF THE ACT AFTER HEARING THE ASSESSEE. THUS, THIS GROUND OF THE ASSE SSEE STANDS ACCEPTED. SIMILAR VIEW IS TAKEN IN CASE OF M/S. PARMESHWAR CO LD STORAGE 8 ITR 172 BY HONBLE ITAT, AHMEDABAD. 5.1 THE COPY OF THE SAID DECISION OF ITAT, MUMBAI BENCH, HAS NEITHER BEEN PLACED ON RECORD NOR THERE IS ANY REFERENCE OF THE SAID DECISION WITH REGARD TO APPEAL NO. OR DATE OF DECISION OF ITAT. H OWEVER, WE DECIDE THE SAID ISSUE ON THE BASIS OF MATERIAL ON RECORD AND A RGUMENTS OF PARTIES. THE FACTS BEFORE US ARE THAT THE CLAIM WITH REGARD TO D EDUCTION U/S 36(1)(VIIA) ON ACCOUNT OF RURAL ADVANCES WAS RAISED FOR THE FIRST TIME BY THE ASSESSEE IN ITS LETTER DATED 09.11.2009, WHICH HAS NOT BEEN CLAIMED IN THE ORIGINAL RETURN FILED ON 15.11.2007 AND REVISED E-RETURN FILED ON 3 1.03.2009. IN THIS REGARD, WE ARE OF THE VIEW THAT ALL THE DETAILS W.R.T. THE CLAIM OF THE ASSESSEE WERE BEFORE THE AO. THE A IS LEGALLY ENTITLED TO THE LEGAL CLAIM. AS PER THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE C ASE OF GOETZE (INDIA) LTD; (SUPRA), THE ISSUE IS LIMITED TO THE POWER OF ASSESSING AUTHORITY AND IT DOES NOT IMPINGE ON THE POWER OF THE INCOME TAX APP ELLATE TRIBUNAL U/S 254 OF THE ACT. THEREFORE, FOLLOWING THE DECISION O F HONBLE SUPREME COURT OF INDIA IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) AND DECISION OF LD. ITA NO.253(ASR)/202 6 CIT(A) VIDE PARA 9 OF HIS ORDER, CONSIDERING THE DE CISION OF MUMBAI, ITAT, IN THE CASE OF M/S. CHICAGO PNEUMATIC (I) LTD. (SU PRA) AND CBDT CIRCULAR NO.14(XL-35) DATED 11.4.1955 AND OUR POWER U/S 254 (1) OF THE ACT, WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSESSEE IS THE LEGAL CLAIM WHICH WAS MADE BEFORE THE AO AND WAS BEFORE LD. CIT(A) AS WELL. TH EREFORE, THE AO IS DIRECTED TO ALLOW THE CLAIM AFTER VERIFYING THE SAM E WITHIN FOUR CORNERS OF LAW BUT BY PROVIDING ADEQUATE OPPORTUNITIES OF BEI NG HEARD TO THE ASSESSEE. THEREFORE, ALL THE GROUNDS OF THE REVENUE ARE ALLOW ED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I N ITA NO.253(ASR)/2012 IS ALLOWED FOR STATISTICAL PURPOSE S. ORDER PRONOUNCED IN THE OPEN COURT ON 9TH OCTOBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 9TH OCTOBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:THE CITIZEN COOPERATIVE BANK LTD. JAMM U. 2. THE DCIT, CIRCLE-1, JAMMU. 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER