The Cuddalore District Central Co-operative Bank Ltd., Cuddalore V. ACIT, Cuddalore

ITA 2805/CHNY/2014

• Counselvise Citation: 280521714 RSA 2014
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 12-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: PHILIP GEORGE

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.2805 & 2806/MDS/2014 ' (' / ASSESSMENT YEARS : 2007-08 & 2010-11 M/S THE CUDDALORE DISTRICT CENTRAL CO-OPERATIVE BANK LTD., BEACH ROAD, CUDDALORE-607 001. PAN : AAAAT 0209 P V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CUDDALORE CIRCLE, CUDDALORE. THE INCOME TAX OFFICER, WARD-I(1), CUDDALORE. (*+/ APPELLANT) (,-*+/ RESPONDENTS) *+ . / / APPELLANT BY : SHRI PHILIP GEORGE, ADVOCATE ,-*+ . / / RESPONDENTS BY : SHRI PATHLAVATH PEERYA, CIT 0 . 1$ / DATE OF HEARING : 12.05.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 29.05.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, CHENNAI, DATED 29.08.2014, CONFIRMING THE PENALTY L EVIED BY THE 2 I.T.A. NOS.2805 & 2806/MDS/14 ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE IN COME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SHRI PHILIP GEORGE, THE LD.COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE ASSESSEE CLAIMED PROVISION FOR D OUBTFUL DOUBTS AS DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT. ACCORDING TO THE LD.COUNSEL, THE FIRST PROVISO PROVIDES DEDUCTION OF 5% OF THE PROVISIONS OF DOUBTFUL DEBT. PLACING RELIANCE ON T HE DECISION OF COCHIN BENCH OF THIS TRIBUNAL IN KANNUR DISTT. CO-O P BANK LTD. V. ACIT (2012) 136 ITD 102, THE LD.COUNSEL SUBMITTED THAT THE COCHIN BENCH, AFTER REFERRING TO THE JUDGMENT OF KERALA HI GH COURT IN CIT V. LORD KRISHNA BANK LTD. (2010) 195 TAXMAN 57, FOUND THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTIO N 36(1)(VIIA) OF THE ACT. ACCORDING TO THE LD.COUNSEL, IT IS A CLAI M MADE BY THE ASSESSEE BY FURNISHING ALL THE MATERIAL FACTS. MER ELY BECAUSE THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE, ACCORDING TO THE LD.COUNSEL, IT CANNOT BE CONSIDERED AS CONCE ALMENT OF ANY INCOME OR FURNISHING OF INACCURATE PARTICULARS. IT MAY BE IN THE OPINION OF THE ASSESSING OFFICER THAT THE ASSESSEE S CLAIM CANNOT BE ALLOWED. HOWEVER, WHEN AN ASSESSEE BONAFIDELY MAKI NG CLAIM, IT CANNOT BE SAID THAT THERE WAS CONCEALMENT OF INCOME MERELY BECAUSE THE CLAIM OF THE ASSESSEE WAS DISALLOWED BY THE ASSESSING 3 I.T.A. NOS.2805 & 2806/MDS/14 OFFICER. THE LD.COUNSEL PLACED HIS RELIANCE ON THE JUDGMENT OF APEX COURT IN THE CASE OF CIT V. RELIANCE PETROPROD UCTS (P) LTD. (2010) 322 ITR 158 AND ON THE JUDGMENT OF MADRAS HI GH COURT IN THE CASE OF CIT V. GEM GRANITES (2013) 86 CCH 160. 3. ON THE CONTRARY, SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSEE KNOWS VERY WELL THAT IT IS NOT ENTITLED FOR DEDUCTION UND ER SECTION 36(1)(VIIA) OF THE ACT IN RESPECT OF PROVISIONS FOR DOUBTFUL DE BT. ACCORDING TO THE LD. D.R., 36(1)(VIIA) OF THE ACT IS APPLICABLE ONLY TO THE SCHEDULED BANK. THE ASSESSEE BEING A CO-OPERATIVE BANK, CANNOT BE CLASSIFIED AS SCHEDULED BANK OR NON-SCHEDULED BA NK. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CL AIM OF THE ASSESSEE. SINCE THE ASSESSEE HAS MADE A WRONG CLAI M, IT AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. ADMITTEDL Y, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT. THIS CLAIM OF THE ASSESSEE CANNOT BE ALLOWED BECAUSE OF STATUT ORY PROVISION. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER MA KING A CLAIM OF WRONG DEDUCTION WOULD AMOUNT TO FURNISHING OF INACC URATE PARTICULARS? THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT THE CLAIM 4 I.T.A. NOS.2805 & 2806/MDS/14 MADE BY THE ASSESSEE ITSELF CANNOT BE CONSIDERED AS FURNISHING OF INACCURATE PARTICULARS. THE CLAIM MAY NOT BE ALLOW ABLE UNDER STATUTORY PROVISION. HOWEVER, IT CANNOT BE SAID TH AT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS. IN FACT, THE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) FOU ND THAT A MERE DISALLOWANCE OF A CLAIM CANNOT BE CONSIDERED AS FUR NISHING OF INACCURATE PARTICULARS. BY RESPECTFULLY FOLLOWING THE JUDGMENT OF THE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P ) LTD. (SUPRA) AND FOR THE REASONING STATED THEREIN, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO JUSTIFICATION F OR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ACCORDINGLY, T HE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND PENALTY LEVIED BY THE ASSESSING OFFICER FOR BOTH THE ASSESSMENT YEARS ARE DELETED. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON 29 TH MAY, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) (. !' ) ( . . . ) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 29 TH MAY, 2015. KRI. 5 I.T.A. NOS.2805 & 2806/MDS/14 . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENTS 3. 0 81 () /CIT(A)-VI, CHENNAI-34 4. 0 81 /CIT, PONDICHERRY 5. 69 ,1 /DR 6. :' ; /GF.