THE AMRAVATI DISTRICT CENTRAL CO-OPERATIVE BANK LTD, Amaravati V. JCIT-AMRAVATI RANGE, Amaravati

ITA 286/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1657 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 23-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: L S DEWANI
• Section: 143(3); 263

Judgement Text

1 ITA NOS. 286 & 287/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T. A. NO. 286 & 287/NAG/201 4 ASSESSMENT YEARS : 2008 09 & 2009 10. THE AMRAVATI DISTRICT CENTRAL JT. COMMISSIONER OF INCOME TAX, CO OPERATIVE BANK LTD. V/S. AMRAVATI RANGE, AMRAVATI. (APPELLANT) RESPONDENT. APPELLANT BY : SH RI L.S. DEWANI. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 10 09 - 2015. DATE OF PRONOUNCEMENT : 24 TH SEPT., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE RES PECTIVE ORDERS OF LEARNED COMMISSIONER OF INCOME TAX III, NAGPUR PASSED UNDER SECTION 263 OF I.T. ACT FOR ASSESSMENT YEARS 2008 09 AND 2009 10 RESPECTIVELY. THE GROUNDS OF APPEAL READ AS UNDER : 1. THE LEARNED CIT III ERRED IN HOLDING THAT ORDER PASSED BY A.O. U/S 143(3) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE ORDER PASSED U/S 263 OF INCOME TAX ACT, 1961 IS ILLEGAL, INVALID AND BAD IN LAW. 2. THE LEARNED CIT III ERRED IN SETTING ASIDE THE ASSESSMENT FRAMED U/S 143(3) AND DIRECTING TO R E EXAMINE CLAIM OF DEDUCTION U/S 36(1)(VIIA) OF INCOME TAX ACT, 1961. 2 ITA NOS. 286 & 287/NAG/2014 3. THE DEDUCTION AS CLAIMED U/S 36(1)(VIIA) OF INCOME TAX ACT, 1961 WAS ALLOWED IN APPELLATE ORDER BY HONBLE CIT II, NAGPUR AND THUS CIT III WAS NOT JUSTIFIED IN DIRECTING TO REEXAMINE THE DEDUCTION U/S 36(1)(VIIA). 2. IN THE ORDER PASSED UNDER SECTION 263, LEARNED CIT HAS OBSERVED THAT ASSESSEE HAS NEVER MADE ANY CLAIM IN THE RETURN OF INCOME AS REGARD TO DEDUCTION UNDER SECTION 36(1)(VIIA) OF I.T. ACT. THE ALLOWANCE OF DEDUCTION IN THE ABSENCE OF CLAIM MADE IN THE RETURN IS NOT WITHIN THE POWERS OF ASSESSING OFFICER AND, THEREFORE, ORDER PASSED BY ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE CIT IN THE ORDER HAS REFERRED TO THE JUDGMENT OF HONBLE S UPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. REPORTED AT 284 ITR 323. ACCORDINGLY THE CIT DIRECTED THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF DEDUCTION UNDER SECTION 36(1)(VIIA). IN THIS REGARD THE ASSESSEE HAS FILED APPEALS BEFORE US. FACTS ARE IDEN TICAL. 3. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEES SUBMISSION IN THIS REGARD ARE AS UNDER : 1. THE OBSERVATION OF HONBLE CIT THAT DEDUCTION UNDER SECTION 36(1)(VIIA) OF I.T. ACT HAS NOT BEEN CLAIMED I N THE RETURN IS FACTUALLY INCORRECT. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS ALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 36(1)(VIIA) OF I.T. ACT AT ` 75,66,620/ IN RESPECT OF A.Y. 2008 09 AND AT ` 1,24,08,909/ IN RESPECT TO A.Y. 2009 10. THE ASSESSEE INVITES ATTENTION TO THE COMPUTATION OF INCOME AND PROFIT AND LOSS ACCOUNT SUBMITTED ALONG WITH RETURN OF INCOME TO DEMONSTRATE THAT THE DEDUCTION UNDER SECTION 36(1)(VIIA) OF I.T. ACT WAS CLAIMED IN RESPECT TO PROVISION FOR DOUBTFUL DEBT MADE IN THE BOOKS OF ACCOUNT. 3 ITA NOS. 286 & 287/NAG/2014 2. THE ASSESSEE INVITES ATTENTION TO PARA 5 OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2008 09S TO SHOW THAT THE ISSUE IN DISPUTE WAS CONSIDERED BY A.O. AND MAJOR PORTION OF THE CLAIM MADE U/S 36(1)(VIIA) OF I.T. ACT, 1961 HAS BEEN DI SALLOWED BY A.O. AFTER ELABORATE DISCUSSION AT PAGES 2 AND 3 OF ASSESSMENT ORDER. 3. THE ASSESSEE INVITES ATTENTION TO PARA 9 OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009 10 WHEREIN THE CLAIM MADE IN THE RETURN OF INCOME IN RESPECT TO PROVISION FOR BAD AN D DOUBTFUL DEBT U/S 36(1)(VIIA) OF I.T. ACT, 1961 HAS BEEN DISCUSSED IN DETAIL AND MAJOR PORTION OF THE CLAIM HAS BEEN DISALLOWED BY A.O. AFTER ELABORATE DISCUSSION AT PAGES 5S TO 7 OF ASSESSMENT ORDER. 4. ON ABOVE FACTUAL POSITION THE OBSERVATION OF LEARNED CIT IN ORDER U/S 263 IS FACTUALLY INCORRECT. THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. REFERRED IN THE ORDER OF CIT U/S 263 IS INAPPLICABLE TO THE FACTS IN THE CASE OF THE ASSESSEE. THE ORDER PASSED BY CIT U/S 263 IS UNJ USTIFIED AND UNSUSTAINABLE AND BAD IN LAW. ORDER PASSED BY LEARNED CIT U/S 263 IS LIABLE TO BE QUASHED. GROUND NO. 3: MERGER WITH APPELLATE ORDER A) IN THE CASE OF ASSESSEE DISALLOWANCE OUT OF PROVISION FOR BAD AND DOUBTFU L DEBT U/S 36(1)(VIIA) OF I.T. ACT, 1961 HAD BEEN CONSIDERED AND DECIDED BY LEARNED CIT(APPEALS) IN APPEAL NO. CIT(A) II/767/11 12 FOR ASSESSMENT YEAR 2008 09 VIDE ORDER DATED 03 03 2014 AND IN APPEAL NO. CIT(A) II/766/11 12 FOR ASSESSMENT YEAR 2009 10 VI DE ORDER DATED 10 03 2014 AND DEDUCTION U/S 36(1)(VIIA) OF I.T. ACT, 1961 WAS HELD TO BE ALLOWABLE AT THE HANDS OF ASSESSEE FOR THE DETAILED REASONS RECORDED THEREIN. 4 ITA NOS. 286 & 287/NAG/2014 B) THE ORDER U/S 263 OF I.T. ACT, 1961 HAS BEEN PASSED ON 24 03 2014 . C) THE ISSUE AS TO THE CLAIM OF DEDUCTION U/S 36(1)(VIIA) OF I.T. ACT, 1961 HAS BEEN CONSIDERED AND DECIDED IN THE CASE OF ASSESSEE IN APPELLATE PROCEEDINGS BY LEARNED CIT(APPEALS). D) THE ORDER OF A.O. MERGED IN THE ORDER OF CIT(APPEALS). THE DEDUCTION U/S 36(1)(VIIA) ALLOWED BY CIT(A) IN APPELLATE PROCEEDINGS CANNOT BE DISPUTED UNDER THE PROVISIONS OF SECTION 263 OF I.T. ACT, 1961. RELIANCE ON: 1) 248 ITR 126 (GUJ) CIT V/S. SHASHI THEATRE (P) LTD. E) ASSUMING JURISDICTION U/S 263 OF I.T. ACT IN RESPECT TO MATTER ALREADY CONSIDERE D AND DECIDED IN APPEAL BY LEARNED CIT(APPEALS) IS UNJUSTIFIED AND BAD IN LAW. ORDER PASSED BY LEARNED CIT U/S 263 IS LIABLE TO BE QUASHED. 4. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF LEARNED CIT. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION S AND PERUSED THE RECORDS. FIRSTLY WE FIND THAT AS PER THE FACTS EMANATING FROM THE RECORDS, LEARNED CIT IS FACTUALLY WRONG IN HOLDING THAT THE ASSESSEE HAS NOT CLAIMED DEDUCTION UNDER SECTION 36(1)(VIIA) IN THE RETURN OF INCOME. FURTHER MORE THE ASSESSIN G OFFICER HAS DULY CONSIDERED THE SAME. THE ASSESSING OFFICER HAS CONSIDERED THE CLAIM OF DEDUCTION UNDER SECTION 36(1)(VIIA) IN THE ASSESSMENT ORDER. AS A MATTER OF FACT IN ASSESSMENT YEAR 2008 09 THE ASSESSING OFFICER HAS CONSIDERED THIS ISSUE ELABORATEL Y IN PAGES 2 AND 3 OF ASSESSMENT ORDER. SIMILARLY THIS ISSUE HAS BEEN DISCUSSED ELABORATELY IN PAGE 5 AND 6 OF THE ASSESSMENT ORDER AND IN PAGES 9 AND 10. THUS THE DIRECTION OF LEARNED CIT TO EXAMINE THE ISSUE AFRESH AS THE ASSESSING OFFICER HAS NOT CONSIDERED THE SAME, IS FACTUALLY INCORRECT. HENCE THE LEARNED CITS ASSUMPTION OF JURISDICTION IN THIS REGARD IS NOT LEGALLY SUSTAINABLE. F URTHER MORE LEARNED CITS RELIANCE UPON THE HONBLE APEX COURT DECISION IN THE CASE OF 5 ITA NOS. 286 & 287/NAG/2014 GOETZE (INDIA) LTD. IS ALSO NOT APPLICABLE ON THE FACTS OF THIS CASE. WHEN THE CLAIM HAS BEEN DULY MADE, THERE IS NO REQUIREMENT OF SPECIFICALLY CLAIMING THE SAME AGAI N IN THE RETURN OF INCOME. MOREOVER AS HELD BY HONBLE APEX COURT IN THE CASE OF CIT V/S. V. MR. P. FIRM, MUAR 56 ITR 67 THE ASSESSEE CANNOT BE WRONGLY TAXED ON THE BASIS OF ESTOPP EL OR ANY OTHER EQUITABLE DOCTRINE. HENCE LEARNED CITS ASSUMPTION OF JURI SDICTION UNDER SECTION 263 IS NOT SUSTAINABLE ON THIS ACCOUNT ALSO. FURTHER MORE WE NOTE THAT THIS ISSUE OF DEDUCTION UNDER SECTION 36(1)(VIIA) WAS A SUBJECT MATTER OF ADJUDICATION BY THE LEARNED CIT(APPEALS) IN APPEAL BEFORE HIM. LEARNED CIT(APPEALS) HAS CONSIDERED THE ISSUE. HENCE WE AGREE WITH THE SUBMISSION OF THE LEARNED COUNSEL OF THE ASSESSEE THAT THE ASSESSING OFFICERS ORDER HAS MERGED WITH THAT OF THE APPELLATE ORDER OF LEARNED CIT(APPEALS). SECTION 263(1) E XPLANATION 1C HAS SPECIFICALLY PROHIBI TED ASSUMPTION OF JURISDICTION BY LEARNE D CIT IN THIS SITUATION. HENCE O N THIS COUNT ALSO ASSUMPTION OF JURISDICTION BY THE LEARNED CIT IS ILLEGAL AND LIABLE TO BE QUASHED. ACCORDINGLY THE ORDER PASSED BY THE LEARNED CIT IS QUASHED. 6. IN THE RESULT, TH ESE APPEALS FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SEPT., 2015. SD/ SD/ (MUKUL K . SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 24 TH SEPT. , 2015. 6 ITA NOS. 286 & 287/NAG/2014 COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR