M/s Sri Ganapathi Urban Co-operative Bank Limited, Shivamogga V. Deputy Commissioner of Income Tax Circle-1 , Shimoga

ITA 3303/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7174 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 12-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAMESH KUMAR
• Assessee Lawyers: R E BALASUBRAMANYAM
• Keywords: Opportunity of being heard; Bad and doubtful debts; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO . 3 303 /BANG/201 8 ASSESSMENT YEAR : 20 14 - 15 M/S. SRI GANAPATHI URBAN CO-OPERATIVE BANK LTD., NR. POST OFFICE, CHAMARAJAPET, SAGAR 577 401, SHIVAMOGGA DIST. PAN: AABAS0096C VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, SHIMOGA. APPELLANT RESPONDENT APPELLANT BY : SHRI R.E. BALASUBRAMANYAM, CA RESPONDENT BY : SHRI A. RAMESH KUMAR, JCIT (DR) DATE OF HEARING : 14 .01.2019 DATE OF PRONOUNCEMENT : 18 . 01 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT (A), DAVANGERE DATED 27.09.2018 FOR ASSESSMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. THE APPELLANT OBJECTS TO THE ORDER OF THE LD.CIT (A ) ON THE GROUNDS: GROUNDS RAISED TAX EFFECT IN INR 1. THAT THE IMPUGNED ORDER IS OPPOSED TO FACTS AND LAW IN SO FAR AS IT IS PRE-JUDICIAL TO THE INTERESTS OF THE APPELLANT. GENERAL GROUND 2. THAT THE LD. CIT(A) ERRED IN DISMISSING THE APPEAL WITHOUT ADJUDICATING THE CASE ON MERITS AND IN DOING SO, THE LD.CIT(A) FAILED TO APPRECIATE THAT IN THE ASSESSEE'S OWN CASE ON A SIMILAR ISSUE THE HONORABLE ITAT BANGALORE HAD ALREADY PASSED ORDERS FOR EARLIER YEARS ALLOWING RELIEF. GENERAL GROUND ITA NO. 3303/BANG/2018 PAGE 2 OF 3 3. WITHOUT PREJUDICE TO GROUND NO 2 THE APPELLANT FURTHER SUBMITS THAT A) THAT THE LD.CIT (A) ERRED IN DENYING THE DEDUCTION UNDER SECTION 36(1) (VIIA) OF THE INCOME TAX ACT IN RESPECT OF PROVISION FOR BAD DEBTS CREATED IN CONNECTION WITH A RURAL BRANCH AND IN DOING SO THE LD.CIT (A) FAILED TO APPRECIATE THE FACT THAT THE ACT USES THE WORDS 'SITUATED IN A PLACE' TO DEFINE A RURAL BRANCH AND NOT THE REACH OF THE BUSINESS OF THAT BRANCH. B) THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF PIGMY COMMISSION FOR NON-DEDUCTION OF TDS AND IN DOING SO THE LD.CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT WAS NOT REQUIRED TO DEDUCT TAX ON SUCH COMMISSION IN TERMS OF THE LETTER ISSUED BY THE MINISTRY OF FINANCE PURSUANT TO THE JUDGMENT OF THE HONORABLE SUPREME COURT. 13.16 LAKHS 1.81 LAKHS THE APPELLANT PRAYS FOR LEAVE TO ADD, DELETE, MODIF Y AND/OR ADDUCE ADDITIONAL GROUND AT ANY TIME BEFORE THE APPEAL IS DISPOSED OFF. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE ADDUCE D OR REMOVED IN TIME TO TIME, IT IS REQUESTED THAT THE HON'BLE ITAT MAY BE PLEASED TO EXAMINE THE CASE IN THE LIGHT OF JUSTICE AND GRANT THE RELIEF SOUGHT FOR. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT THE ORDER OF CIT (A) IS EX-PARTE QUA THE ASSESSEE AND HENCE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF CIT (A) FOR FRESH DECI SION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. AT THIS JUNCTURE, IT WAS A QUERY RAISED BY THE BENCH THAT HOW MANY OPPOR TUNITIES WERE PROVIDED BY CIT (A). IN REPLY, THE LD. AR OF ASSESSEE DRAWN MY ATTENTION TO PARA NO. 3 OF THE ORDER OF CIT(A) AND POINTED OUT THAT THE A PPEAL WAS FIXED FOR HEARING ON 3 DATES I.E. 07.03.2018, 07.08.2018 AND 18.09.2018 AND ALTHOUGH ASSESSEE COULD NOT APPEAR BEFORE CIT(A) BU T EVEN IN THE ABSENCE OF ASSESSEE, CIT(A) SHOULD HAVE DECIDED THE APPEAL ON MERIT AND SINCE THIS WAS NOT DONE BY CIT(A), THE MATTER MAY BE RESTORED BACK TO THE FILE OF ITA NO. 3303/BANG/2018 PAGE 3 OF 3 CIT(A) FOR FRESH DECISION IN THE INTEREST OF JUSTIC E. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT THIS IS TRUE THAT THE APPEAL WAS FIXED BY CIT (A) FOR HEARING ON 3 OCCASI ONS AND THERE WAS NO COMPLIANCE BY THE ASSESSEE ON ANY OF THESE DATES BU T STILL, THE LD. CIT (A) SHOULD HAVE DECIDED THE ISSUE ON MERIT. BUT HE SIM PLY DISMISSED THE APPEAL ON THIS BASIS THAT THE ASSESSEE IS NOT INTER ESTED IN PROSECUTING THE APPEAL. UNDER THESE FACTS, I AM OF THE CONSIDERED OPINION THAT THE MATTER SHOULD GO BACK TO THE FILE OF CIT(A) FOR FRESH DECI SION ON MERIT AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BO TH SIDES. I ORDER ACCORDINGLY. IN VIEW OF THIS DECISION, NO ADJUDICA TION IS CALLED FOR REGARDING THE MERIT OF THE CASE AT THE PRESENT STAGE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 18 TH JANUARY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.