SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., Jaipur V. ITO, Sikar

ITA 285/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2110 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 12-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: MAHENDRA GARGIA
• Keywords: Reopening of assessment; Rule of consistency; Difference of opinion; Change of opinion
• Section: 143(3); 234B; 147; 148; 37

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 285/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., BASANT VIHAR, JAIPUR ROAD, SIKAR. CUKE VS. THE INCOME TAX OFFICER, WARD-4, SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAAAS 1603 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 240/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. THE INCOME TAX OFFICER, WARD-4, SIKAR. CUKE VS. M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD., BASANT VIHAR, SIKAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAAAS 1603 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIA (C.A) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14.08.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29/08/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THESE TWO CROSS APPEAL ONE BY THE ASSESSEE I.E. ITA NO. 285/JP/2017 AND ONE BY THE REVENUE I.E ITA NO. 240/JP/2017 ARE DIRECTED AGAINST THE ORDER OF LD. CIT (A)-5, JAIPUR, DATED 25.01.2017 PERTAINI NG TO A.Y. 2011-12. BOTH THE 2 ITA NO. 285 & 240/JP/2017. M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD. SIKAR. APPEALS WERE TAKEN UP TOGETHER AND BEING DISPOSED O FF BY WAY OF CONSOLIDATED ORDER FOR THE SAKE OF BREVITY. ITA NO. 285/JP/2017 2. FIRST, WE TAKE UP ASSESSEES APPEAL IN ITA NO. 2 85/JP/2017. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1.1 THE VERY ACTION TAKEN U/S 147 R/W 148 IS BAD I N LAW WITHOUT JURISDICTION AND BEING VOID AB-INITIO, THE SAME KINDLY BE QUASHE D. CONSEQUENTLY THE IMPUGNED ASSESSMENT FRAMED U/S 143(3)/148 DATED 23.03.2015 ALSO KINDLY BE QUASHED. 1.2 THE IMPUGNED ORDER U/S 143(3)/148 DATED 23.03.2 015 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME KINDLY BE QUASHED. 2. RS. 41,25,000/-: THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE OF THE PROV ISION OF OVERDUE INTEREST MERELY ALLEGING THAT THE SAME IS NOT ALLOW ABLE UNDER THE ACT. THE DISALLOWANCE SO MADE AND CONFIRMED BY THE LD. C IT(A), BEING TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS KINDLY BE ALLOWED AS CLAIMED. 3. THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS OF THE CASE IN CHARGING INTEREST U/S 234B OF THE ACT. THE APPELLA NT TOTALLY DENIES ITS LIABILITY OF CHARGING OF ANY SUCH INTEREST. THE IN TEREST SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. 4. THE APPELLANT PRAYS YOUR HONOUR INDULGENCES TO A DD, AMENDED OR ALTER OF OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE THE DATE OF HEARING. 3. BRIEFLY, STATED THE FACTS ARE THAT THE CASE OF T HE ASSESSEE WAS REOPENED AND THE ASSESSMENT U/S 143(3) READ WITH 147 OF THE ACT WAS FRAMED VIDE ORDER DATED 23/03/2015. WHILE FRAMING THE ASSESSMENT THE ASSES SING OFFICER MADE ADDITION ON ACCOUNT OF OVERDUE INTEREST AMOUNTING TO RS. 41,25, 000/- AND AUDIT FEES AMOUNTING TO RS. 1,07,950/-. THUS, MADE ADDITION OF RS. 42,3 2,950/-. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE 3 ITA NO. 285 & 240/JP/2017. M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD. SIKAR. SUBMISSIONS CONFIRMED THE ACTION OF THE ASSESSING O FFICER IN RESPECT OF REOPENING OF ASSESSMENT AND ALSO DISMISSED THE GROUND RAISED AGA INST DISALLOWANCE OF OVERDUE INTEREST. HOWEVER, IN RESPECT OF AUDIT FEES, THE L D. CIT(A) ALLOWED THE GROUND OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO GIVE FULL DEDUCTION U/S 80P(2)(A)(I). 4. AGAINST THIS, BOTH ASSESSEE AND REVENUE ARE IN A PPEAL. 5. GROUNDS NO. 1.1 TO 1.2 OF THE ASSESSEES APPEAL ARE AGAINST CONFIRMING TH E ACTION OF THE REOPENING OF THE ASSESSMENT. 5.1 LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE IN THE WRITTEN SUBMISSIONS AND VEHEMENTLY ARGUED THAT LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION. 5.2 ON THE CONTRARY, LD. DEPARTMENTAL REPRESENTATI VES OPPOSED THE SUBMISSIONS AND SUBMITTED THAT THE REOPENING IS WITHIN 4 YEARS THE REASONS AS RECORDED IN THE REASON FOR THE BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT. THERE WERE TWO COMPONENTS ONE WAS OVERDUE INTEREST OF RS. 41,25,00 0/- AND ANOTHER AUDIT FEES OF RS. 1,07,950/- . LD. D/R SUBMITTED THAT NO QUERY WA S RAISED DURING THE ASSESSMENT PROCEEDINGS. 5.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE COULD NOT POINT OUT THAT THE ASSESSING OFFICER DURING THE COURSE OF HEARING HAD MADE ANY Q UERY WITH REGARD TO OVERDUE INTEREST AND AUDIT FEES. THE LD. CIT(A) DISMISSED THE GROUND BY OBSERVING AS UNDER:- 3.2 I HAVE CONSIDERED THE FACTS OF THE CASE, THE A SSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. THE ASSESSMENT HAD BE EN REOPENED AFTER OBSERVING THAT THERE WAS A CLAIM OF PROVISION OF RS . 41,25,000/- UNDER THE 4 ITA NO. 285 & 240/JP/2017. M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD. SIKAR. HEAD OVERDUE INTEREST AND AUDIT FEES OF RS. 1,07,95 0/- WHICH WERE DEBITED TO THE P & L ACCOUNT AND WERE ALLOWED AS SUCH IN THE O RIGINAL ASSESSMENT ORDER. FROM THE RECORD OF ORIGINAL ASSESSMENT PROCEEDINGS, IT IS OBSERVED THAT THE AO HAD NOT RAISED ANY SPECIFIC QUERY ON THE ISSUE O F ALLOWANCE OF PROVISION ON ACCOUNT OF OVERDUE INTEREST AND AUDIT FEE. THUS, N O OPINION HAD BEEN FORMED IN THE ORIGINAL ASSESSMENT ORDER REGARDING THESE TW O ISSUES. HENCE, THERE IS NO CHANGE OF OPINION INVOLVED IN THE SUBSEQUENT REO PENING OF ASSESSMENT. THUS, THE PEAL OF THE APPELLANT THAT THERE WAS FULL APPLICATION OF MIND BY THE AO ON THESE ISSUED IN THE ORIGINAL ASSESSMENT PROCE EDINGS IS NOT AT ALL BORNE OUT BY THE RECORD, AND IS THEREFORE NOT ACCEPTABLE. THUS, THERE IS NO REASON TO INTERFERE IN THE REOPENING OF THE CASE. ACCORDI NGLY THIS GROUND IS DISMISSED. THE ASSESSEE HAS NOT PLACED ANY CONTRARY MATERIAL T O THE FINDING OF THE LD. CIT(A). THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE IN TO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THIS GROUND OF ASSESSEES APPEAL IS REJECTED. 6. GROUND NO. 2, IS AGAINST THE DISALLOWANCE OF PROVISION OF OVERDU E INTEREST. 6.1 LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. IT IS SUBMITTED BY THE LD. CO UNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS BEEN CARRYING ON THE SAME BUSINESS IN THE SAME SETUP AND UNDER THE SAME FACTS AND CIRCUMSTANCES. EVEN THE MANNER AND METHOD OF RECORDING THE TRANSACTION HAS ALSO BEEN THE SAME SINCE THE INCEPT ION, ALL ALONG IN THE PAST, THE CASES OF THE ASSESSEE ARE BEING SELECTED FOR SCRUTI NY IN ALMOST EVERY YEAR EXCEPT IN ASSESSMENT YEAR 2010-11. THE SAME BOOKS OF ACCOUNT AND THE OTHER ANCILLARY RECORD SHOWING DETAILS MAINTAINED IN SIMILAR MANNER IN THE PAST ALSO, WERE DULY PRODUCED BEFORE THE EARLIER ASSESSING OFFICERS YET HOWEVER, IN NONE OF THESE YEARS, 5 ITA NO. 285 & 240/JP/2017. M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD. SIKAR. THE AO HAS NEVER MADE DISALLOWANCE ON ACCOUNT OF OV ERDUE INTEREST. SIMILAR IS THE POSITION IN LATER YEARS. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASS ESSING OFFICER HAS NOT DEMONSTRATED AS TO WHY HE IS NOT FOLLOWING THE RULE OF CONSISTENCY. 6.2 PER CONTRA LD. DEPARTMENTAL REPRESENTATIVES OPP OSED THE SUBMISSIONS AND SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 6.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD. CIT(A) HAS GIVEN FINDI NG ON FACT THAT ASSESSEE HAS NOT WRITTEN OFF SUCH NPA AND INTEREST THEREON AS BAD DE BT DURING THE YEAR UNDER CONSIDERATION THIS FINDING ON FACT IS NOT CONTROVER TED BY THE LD. COUNSEL FOR THE ASSESSEE. LD. COUNSEL SUBMITTED THAT THIS IS ALLOW ABLE U/S 37 OF THE ACT. IN OUR VIEW, THE CONTENTIONS OF THE LD. COUNSEL FO R THE ASSESSEE IS MISPLACED THE SECTION 37 RELATES TO THE ANY EXPENDITURE NOT BEING EXPENDITURE OF THE NATURE DESCRIBED IN SECTION 30 TO 36 SINCE THE INTEREST IS PART OF THAT WOULD BE COVERED U/S 36(1)(VII) OF THE ACT. FURTHER, THE PLEA OF THE A SSESSEE IS THAT THIS HAS BEEN ALLOWED IN THE EARLIER YEARS IN OUR VIEW RULE OF CONSISTENC Y WOULD APPLY WHERE THE ASSESSEE HAS BEEN FOLLOWING THE PARTICULAR ACCOUNTING POLICY AND THE REVENUE HAS BEEN ACCEPTED THE SAME BUT THE ISSUE OF ALLOWABILITY OR DISALLOWABILITY OF EXPENSES WOULD CERTAINLY DEPEND UPON THE PROVISION OF THE ACT. TH EREFORE, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 7. GROUND NO. 3 IS AGAINST CHARGING OF INTEREST U/S 234B OF THE AC T. THIS BEING THE CONSEQUENTIAL IN NATURE NEEDS NO SEPARATE ADJUD ICATION. 8. GROUND NO. 4 , IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDI CATION. 9. IN THE RESULT APPEAL OF ASSESSEE IN ITA NO. 285/JP/2017 IS DISMISSED. 6 ITA NO. 285 & 240/JP/2017. M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD. SIKAR. ITA NO. 240/JP/2017. 10. NOW, WE TAKE UP REVENUES APPEAL IN ITA NO. 240 /JP/2017 PERTAINING TO A.Y. 2011-12. THE GROUNDS RAISED IN THIS APPEAL ARE AS UNDER:- APPEAL IS FILED ON THE FOLLOWING GROUNDS AGAINST T HE ORDER OF THE LDJ. CIT(A), ALWAR IS APPEAL NO. 140/215-16 DATED 25-01-2017 IN THE CASE OF M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD. FOR THE A.Y. 2011-1 2:- 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS)-5, JA IPUR HAS ERRED IN ALLOWING DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT 1961 TO THE ASSESSEE ON THE OVERDUE INTEREST OF RS. 41,25,000/. 2. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AN D IN LAW, THE CIT(A) HAS ERRED IN ALLOWING DEDUCTION UNDER SECTIO N 80P(20(A)(I) OF THE IT ACT 1961 TO THE ASSESSEE, IGNORING THAT I T IS A CO- OPERATIVE BANK NOT ENTITLED FOR DEDUCTION AS PER T HE PROVISION OF SUB-SECTION(4) OF SECTION 80P. 3. THE APPELLANT CRAVES LEAVE OR ADD, ALTER, AMEND, WI THDRAW OR INSERT ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE TI ME OF HEARING OF THE APPEAL. 11. ONLY EFFECTIVE GROUND IS AGAINST ALLOWING DEDUC TION U/S 80P(2)(A)(I) OF THE INCOME TAX ACT TO THE ASSESSEE ON THE OVERDUE INTER EST OF RS. 41,25,000/-. 11.1 LD. D/R VEHEMENTLY ARGUED THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION AND SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 11.2 PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUPPOR TED THE ORDER OF THE LD. CIT(A) AND REITERATED THE SUBMISSIONS AS MADE IN THE WRITT EN SUBMISSIONS. 11.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) DECIDED THE ISSUE BY FOLLOW ING THE DECISION OF THE CO- ORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO. 87 8/JP/2016. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF T HE LD. CIT(A), SAME IS HEREBY AFFIRMED. THE REVENUE HAS NOT BROUGHT ANY CONTRARY BINDING PRECEDENTS BY THE JURISDICTIONAL HIGH COURT. GROUND NO. 1 AND 2 OF T HE REVENUES APPEAL IS DISMISSED. 7 ITA NO. 285 & 240/JP/2017. M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD. SIKAR. 12. GROUND NO. 3 , IS GENERAL IN NATURE NEEDS NO SEPARATE ADJUDICATI ON. 13. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE (285/JP/2017) AND REVENUE (240/JP/2017) ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 29 TH DAY OF AUGUST 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 29/08/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S SIKAR SAHAKARI BHOOMI VIKAS BANK LTD.,SIKAR. 2. THE RESPONDENT THE ITO,WARD-4, SIKAR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 285 & 240/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR