The Ambala Central Cooperative Bank Ltd., Ambala City V. ITO, Ambala

ITA 332/CHANDI/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60850 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Keywords: Rectification of order
• Section: 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI H.L. KARWA, VP AND SHRI T.R. SOOD, AM ITA NO. 332/CHD/2012 ASSESSMENT YEAR: 2009-10 THE AMBALA CENTRAL V. I.T.O. COOPERATIVE BANK LTD. WARD 1, AMBALA COURT ROAD AMBALA CITY AAABT 0447 Q (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ANIL KHANNA RESPONDENT BY: SMT. JYOTI KUMARI, CIT DATE OF HEARING: 10.05.2012 DATE OF PRONOUNCEMENT: 23.05.2012 ORDER PER T.R. SOOD, A.M IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS: 1 AS PER THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER THE PROVISIONS OF LAW, THE LD. CIT(A) HAS ERRED IN NOT AMENDING THE ORDER OF THE ASSESSING OFFICER BY ADJUSTING THE BROUGHT FORW ARD LOSSES CLAIMED IN THE RETURN AND REDUCING THE INCOME TO NIL. 2. AS PER THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER THE PROVISIONS OF LAW, THE BROUGHT FORWARD LOSSES BE SE T OFF AGAINST THE CURRENT YEAR INCOME AND THE INTIMATION AS WELL AS THE RECTIFICATION ORDER BE AMENDED AND THE DEMAND BE VACATED ACCORDINGLY. 3. AS PER THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER THE PROVISIONS OF LAW, THE ASSESSEE HAS BEEN PUT TO UNJ USTIFIED INCONVENIENCE BY RESORTING TO APPEALS AT VARIOUS LE VELS. IIT IS PRAYED THAT EXEMPLARY COST SHOULD BE AWARDED IN TERMS OF SUBSEC TION (2B) OF SECTION 254 OF INCOME-TAX ACT, 1961 FOR FORCING THE ASSESSE E TO FILE THIS APPEAL. 2. GROUND NOS. 1 AND 2 AFTER HEARING BOTH THE PARTIES WE FIND THAT THE ASSESSEE HAD FILED ITS RETURN THROUGH ELECTRONIC ME DIA IN WHICH THE INCOME OF RS. 9,53,75,262/- WAS DECLARED. HOWEVER, THERE WER E CARRY FORWARDED LOSSES OF RS. 12,43,94,853/- OUT OF WHICH A LOSS AMOUNTING TO RS. 9,53,75,262/- WAS SET OFF DURING THE YEAR AND THE BALANCE AMOUNT WAS CARRY FORWARDED TO THE FUTURE YEARS. IN THE ELECTRONIC PROCESSING THE LOS S SET OFF WAS SHOWN AT ZERO. ACCORDINGLY THE ASSESSEE MADE AN APPLICATION U/S 15 4 OF THE ACT FOR RECTIFICATION OF THE SAME. THE APPLICATION WAS RE JECTED BY STATING THAT THE 2 ASSESSEE HAD FILED RETURN DECLARING INCOME AND NO L OSS WAS CLAIMED BY THE ASSESSEE. 3. ON APPEAL, IT WAS MAINLY STATED THAT THE ASSESSE E HAD INCURRED LOSSES IN THE EARLIER YEAR, THE SAME SHOULD HAVE BEEN ALLOWED TO BE SET OFF AGAINST THE CURRENT INCOME AND THE REJECTION OF SET OFF OF LOSS ES WAS NOT JUSTIFIED. 4. THE LD. CIT(A) REJECTED THIS APPLICATION BY STAT ING THAT THE SCOPE OF RECTIFICATION PROCEEDINGS WAS LIMITED AND IT WAS AL SO OBSERVED THAT SET OFF OF LOSSES CANNOT BE A MATTER OF RECTIFICATION AND IN T HIS REGARD RELIANCE WAS PLACED ON CIT V. CHALTAN VIBHAG UDYOG KHAND SAHAKARI MANDL I LTD., 282 ITR 385. IT WAS ALSO OBSERVED THAT AFTER 1.6.1999 NO ADJUSTMENT TO THE TOTAL INCOME DECLARED BY THE ASSESSEE, CAN BE MADE. SINCE THE I NTIMATION WAS ISSUED TO THE ASSESSEE AFTER 1.6.1999, THE RECTIFICATION WAS NOT POSSIBLE. 5. AGGRIEVED BY THE ABOVE ORDER, THE ASSESSEE HAS F ILED AN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL OF THE ASSESSEE SUBM ITTED THAT THE ASSESSEE HAD FILED RETURN ELECTRONICALLY IN WHICH THE INCOME OF RS. 9,53,75,262/- WAS DECLARED. HOWEVER, THE ASSESSEE HAD CLAIMED SET OF F OF CARRY FORWARD LOSSES TO THIS EXTENT OUT OF TOTAL CARRY FORWARD LOSSES OF RS . 12,43,94,853/-. IN THIS REGARD HE REFERRED TO PAGE 16 OF PAPER BOOK WHICH IS SCHED ULE OF LOSSES CARRIED OVER TO FUTURE YEARS. THE SCHEDULE CLEARLY SHOWS THAT THE TOTAL LOSSES WERE RS. 12,43,94,853/- OUT OF WHICH LOSSES AMOUNTING TO RS . 9,53,75,262/- WAS SET OFF DURING THE YEAR AND THE BALANCE LOSS OF RS. 2,90,19 ,591/- WAS CARRY FORWARDED. HE REFERRED TO PAGE 24 WHICH IS A COPY OF THE INTIM ATION U/S 143(1) OF THE ACT AND POINTED OUT THAT THE FIRST COLUMN WHICH READS AS PROVIDED BY TAX PAYER IN RETURN OF INCOME CLEARLY SHOWS THE LOSS OF PREVIOUS YEAR ADJUSTED WAS AT RS. 12,43,94,853/- WHICH CLEARLY SHOWS THAT THE ASSESSE E HAD MADE A CLAIM OF LOSS AND THEREFORE, THE ASSESSING OFFICER AND THE LD. C IT(A) ARE WRONG IN SAYING THAT THE ASSESSEE HAD NOT CLAIMED ANY LOSS. IN FAC T, THE LOSS ALLOWED TO BE SET OFF IS SHOWN AS ZERO WHICH MEANS ELECTRONICALLY NO SET OFF OF LOSS WAS ALLOWED AND THE DEMAND WAS RAISED AGAINST WHICH THE ASSESSE E HAD FILED RECTIFICATION 3 APPLICATION. HE THEN REFERRED TO PAGE 45 AND POINT ED OUT THAT LATER ON RECTIFICATION ORDER WAS ISSUED BY CENTRALIZED PROCE SSING CENTRE (IN SHORT CPC) THROUGH WHICH LOSS AMOUNTING TO RS. 9,53,75,262/- W AS ADJUSTED. HOWEVER, IT DOES NOT SHOW THE BALANCE LOSS TO BE CARRY FORWARD. ACCORDINGLY THE AUTHORITIES BELOW WERE WRONG IN STATING THAT THE ASSESSEE HAD N EVER CLAIMED LOSS AND THIS LOSS SHOULD BE ALLOWED TO BE SET OFF AS WELL AS LOS S WHICH IS NOT ABSORBED DURING THE YEAR SHOULD BE ALLOWED TO BE CARRY FORWARD. 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE ST RONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AN D FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE. TH E COPY OF RETURN AS WELL AS THE PROCESSING DONE BY THE CPC CLEARLY SHOWS THAT T HE ASSESSEE HAD CLAIMED SET OFF OF LOSSES AMOUNTING TO RS. 9,53,75,262/- OU T OF TOTAL CARRY FORWARDED LOSSES OF RS. 12,43,94,853/-. FURTHER THE ASSESSEE HAD ALSO FILED THE COPY OF RETURN FOR EARLIER YEARS WHICH SHOWS THAT THE LOSSE S WERE RETURNED IN THOSE YEARS. ONCE THE LOSSES HAVE BEE CLAIMED THE SAME W ERE REQUIRED TO BE ALLOWED AS SET OFF AFTER VERIFICATION THAT SUCH LOS SES WERE DETERMINED LOSSES. WE DO NOT AGREE WITH THE FINDINGS OF THE LD. CIT(A) THAT SET OFF OF LOSSES CANNOT BE A MATTER OF RECTIFICATION IN VIEW OF THE JUDGMEN T OF HON'BLE GUJARAT HIGH COURT IN CASE OF CIT V. CHALTAN VIBHAG UDYOG KHAND SAHAKARI MANDLI LTD.,282 ITR 385. IN THAT CASE THE ISSUE WAS REGARDING RECT IFICATION OF PRIORITY OF CARRY FORWARDED ITEMS I.E. OF DEDUCTION OF CARRY FORWARD LOSSES, CURRENT DEVELOPMENT REBATE ETC. IN THE BACKGROUND OF THAT DECISION IT WAS HELD AS UNDER: THAT THE QUESTION OF THE ORDER OF PRIORITY AMONGST DIFFERENT ITEMS LIKE CARRY FORWARD LOSS BUSINESS OF EARLIER YEARS, UNABSORBED DEVELOPMENT REBATE OF EARLIER YEARS, ETC., WAS NOT FREE FROM DOUBT. THE ACTION U/S 154 OF THE ACT COULD NOT BE SUSTAINED IN THE ABSENCE OF ANY MISTAKE APPA RENT FROM THE RECORD AND NO RECTIFICATION WAS PERMISSIBLE. THEREFORE, FROM THE ABOVE IT IS CLEAR THAT THE ISSU E WAS QUITE DIFFERENT I.E. WHAT IS THE PRIORITY FOR ADJUSTED CARRY FORWARD LOSSES, DEVELOPMENT REBATE ETC., WHEREAS IN CASE BEFORE US, SIMPLE ISSUE IS WHETHER THE CARRY FORWARD LOSSES 4 CAN BE SET OFF OR NOT? THEREFORE, WE ARE OF THE O PINION THAT IF THE LOSSES HAVE ALREADY BEEN DETERMINED THE SAME WERE REQUIRED TO B E ALLOWED AS SET OFF AGAINST CURRENT INCOME OF THE ASSESSEE. IN FACT, T HE CPC HAS ITSELF LATER ON ISSUED A RECTIFICATION ORDER (SEE PAGE 45) WHEREIN THE LOSSES TO THE EXTENT OF RS. 9,53,75,262/- HAS BEEN ALLOWED TO BE SET OFF. H OWEVER, THERE IS NO MENTION OF CARRY FORWARD OF LOSSES. THEREFORE, WE SET ASI DE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO VERIFY THE FIGU RES OF LOSSES DETERMINED ALREADY ON RECORD AND ALLOW THE SET OFF AS WELL AS CARRY FORWARD OF SUCH LOSSES. 8. GROUND NO. 3 THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS BEEN UNNECESSARILY PUT TO HARDSHIP BY WAY OF RAISING A DEMAND IN EXCESS OF RS. 3.00 CRORE AND UNNECESSARY LITIGAT ION BY THE DEPARTMENT. THEREFORE, SUITABLE COST SHOULD BE IMPOSED ON THE REVENUE. 9. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SU BMITTED THAT THE ASSESSING OFFICER WAS DOING HIS DUTY WHILE ADJUDICA TING THE MATTER AND THEREFORE, NO COST SHOULD BE IMPOSED. FURTHER NO COST CAN BE POSSIBLY IMPOSED ON THE APPELLATE AUTHORITY. THEREFORE, TH IS IS NOT A FIT CASE FOR LEVY OF COST. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY A ND AGREE WITH THE LD. DR FOR THE REVENUE THAT THE ORDERS HAVE BEEN PASSED WH ILE PERFORMING THE STATUTORY DUTIES BY THE ASSESSING OFFICER AND THEREFORE, IT IS NOT A FIT CASE FOR LEVY OF COST. THE APPELLATE AUTHORITIES NORMALLY EXPRESS THEIR JU DICIAL OPINION AND THEREFORE, OPINION EXPRESSED BY THE LD. CIT(A) IN THIS CASE AL SO REMAINS ONLY A JUDICIAL OPINION. HIS JUDICIAL OPINION MAY NOT BE CORRECT B UT THAT DOES NOT CALL FOR LEVY OF COST. HENCE WE DECLINE TO ACCEPT THE REQUEST THAT THE COST SHOULD BE IMPOSED ON THE REVENUE. 11. HOWEVER, WE WOULD LIKE TO TAKE THIS OPPORTUNITY TO BRING TO THE NOTICE OF CBDT THAT AFTER THE PROCEDURE OF CENTRAL PROCESSING OF RETURNS, MANY ISSUES HAVE COME BEFORE VARIOUS FORUMS WHERE UNNECESSARY D EMANDS HAVE BEEN 5 RAISED DUE TO NON-GRANT OF TDS, WRONG COMPUTATION O F INCOME, ADJUSTMENT OF THE PREVIOUS YEAR DEMAND WHICH HAVE ALREADY BEEN DE LETED BY THE JURISDICTIONAL ASSESSING OFFICER. THEREFORE, WE WOULD LIKE TO URGE THE CBDT TO TAKE UP THIS MATTER URGENTLY AND ESTABLISH PROPER COORDINATION B ETWEEN THE ASSESSING AUTHORITY AND CENTRAL PROCESSING AUTHORITY SO THAT THESE PROBLEMS ARE IMMEDIATELY SOLVED AND UNNECESSARY LITIGATION CAN B E AVOIDED. COPY OF THIS ORDER SHOULD BE FORWARDED TO THE CHIEF COMMISSIONER OF INCOME-TAX, CHANDIGARH AND CHAIRMAN OF CBDT FOR NECESSARY ACTIO N. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 23.5.2012 SD/- SD/- (H.L. KARWA) (T.R. SOOD) VICE PRESIDENT ACCOUNTANT ME MBER DATED: 23 .5.2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/ THE DR 6