The Nainital Bank Ltd., Nainital V. Pr. CIT, Haldwani

ITA 3484/DEL/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4153 (ITAT-DEHRADUN)
• Duration Of Justice: 4 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 10-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N C UPPADHAY
• Assessee Lawyers: K R RASTOGI
• Keywords: Principle of natural justice; Earning of tax free income; Rule 8D; Set aside
• Section: 143(3); 14A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL DEHRADUN CIRCUIT BENCH: DEHRAD UN BEFORE, SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.3484/DEL/2016 (ASSESSMENT YEAR 2011-12 ) THE NAINITAL BANK LTD. 7-OAKS, MALLITAL, NAINITAL. PAN AAACT 5714D VS. PR. CIT HALDWANI. (APPELLANT) (RESPONDENT) APPELLANT BY SH. K.R. RASTOGI, FCA RESPONDENT BY SH. N.C.UPPADHAY, SR. DR DATE OF HEARING 04.03.2021 DATE OF PRONOUNCEMENT 31.05.2021 ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS DIRECTED AGAINST THE ORDER PA SSED U/S 263 OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 31.03.201 6 PASSED BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME, HALDWA NI {PR. CIT) FOR ASSESSMENT YEAR 2011-12, WHEREIN THE LD. PR. CIT HAS SET ASIDE THE ASSESSMENT ORDER ON THE GROUND THAT THE ASSESSI NG OFFICER DID 2 ITA NO.3484/DEL/2016 THE N AINITAL BANK LIMITED VS. PR.CIT NOT RAISE ANY QUERY REGARDING ANY INTEREST EXPENDIT URE HAVING BEEN INCURRED IN RELATION TO THE EXEMPT INCOME AND, THER EFORE, THE ASSESSMENT ORDER WAS ERRONEOUS. 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A BANKING COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AND IS ENGAGED IN BANKING ACTIVITIES. THE RETURN ON INCOME WAS FILED DECLARING INCOME OF RS.84,73,50,890/-. THE CASE WAS SELECTED FOR COMPULSORY SCRUTINY AND THE ASSESSMENT WAS COMPLETED AT THE RETURNED INCOME VIDE ORDER DATED 12.03.2014. SUBSEQ UENTLY, THE LD. PR. CIT INITIATED PROCEEDINGS U/S 263 OF THE AC T AND SET ASIDE THE ASSESSMENT ORDER, AGAINST WHICH THE ASSESSEE IS NOW IN APPEAL BEFORE US. 3.0 THE FOLLOWING GROUNDS HAVE BEEN RAISED B Y THE ASSESSEE IN THIS REGARD: (1) THE LD. PR. C.I.T., HALDWANI ERRED ON FACTS AND IN LAW IN PASSING ORDER U/S 263 OF I.T. ACT WITHOUT APPREC IATING THAT ASSESSMENT MADE U/S 143(3) OF I. T. ACT DATED 12.03 .2014 IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F REVENUE. 3 ITA NO.3484/DEL/2016 THE N AINITAL BANK LIMITED VS. PR.CIT (2) THE LD. PR. C.I.T. ERRED ON FACTS AND IN L AW IN PASSING ORDER U/S 263 MECHANICALLY WITHOUT APPLICATION OF M IND AS HE NEITHER EXAMINED THE RECORDS NOR MADE OR CAUSE T O BE MADE SUCH ENQUIRY AS REQUIRED TO JUSTIFY THE ORDER U/S 263 OF I. T. ACT. (3) THAT LD. PR. C.I.T. DID NOT APPRECIATE THA T LD. A.O. IN ASSESSMENT PROCEEDING RAISED QUERY, EXAMINED THE IS SUE W. R. T. DISALLOWANCE U/S 14A READ WITH RULE 8D FROM T HE DETAILS PRODUCED AND SUBMITTED. LD. A.O. ALSO CONSIDERED TH E ORDER OF HIGHER COURTS IN ASSESSEE'S OWN CASE ON THIS ISS UE OF EARLIER YEARS. (4) THAT THE LD. A. O. SATISFIED HIMSELF WITH THE ASSESSEE'S SUBMISSION, CASE LAWS IN ASSESSEE'S OWN CASE, ASSES SMENT OF EARLIER YEARS ON THIS ISSUE AND HE TOOK A PERFEC TLY CORRECT OR A POSSIBLE VIEW, THEREFORE, THE ORDER PASSED BY HIM CANNOT BE TREATED AS ERRONEOUS IN SO FAR AS IT IS PREJUDIC IAL TO THE INTEREST OF REVENUE. (5) THAT INITIATION OF PROCEEDING U/S 263 OF I. T. ACT AND ORDER U/S 263 OF I. 1. ACT IS CONTRARY TO THE FACTS , LAW AND PRINCIPAL OF NATURAL JUSTICE AND WITHOUT PROVIDING PROPER OPPORTUNITY TO HAVE ITS SAY ON THE REASONS RELIED U PON BY HIM. 4 ITA NO.3484/DEL/2016 THE N AINITAL BANK LIMITED VS. PR.CIT 4.0 AT THE OUTSET, THE LD. AUTHORIZED REPRESEN TATIVE (AR) SUBMITTED THAT THE CONSEQUENTIAL ASSESSMENT ORDER U /S 143(3) READ WITH SECTION 263 OF THE ACT SUBSEQUENT TO THE PROCEE DINGS INITIATED U/S 263 OF THE ACT WAS PASSED ON 29.06.2016 BY MAKIN G AN ADDITION OF RS.3,78,67,952/- U/S 14A OF THE ACT WHICH WAS SUBS EQUENTLY DELETED BY THE LD. CIT(APPEALS) VIDE ORDER DATED 16 .05.2017 AND THE SAME WAS UPHELD BY THE DELHI BENCH OF THE ITAT IN IT A NO.5018/DEL/2017 VIDE ORDER DATED 31.01.2020, AND T HEREFORE, APPARENTLY, THE CAPTIONED APPEAL WAS ONLY OF ACADEM IC IMPORTANCE AS NO ADDITION WAS MADE ON THE ISSUE ON WHICH THE PR OCEEDINGS U/S 263 HAD CULMINATED. 5.0 THE LD. SR. DEPARTMENTAL REPRESENTATIVE ( DR) AGREED TO THE SUBMISSIONS OF THE LD. AR. 6.0 HAVING HEARD BOTH THE PARTIES AND CONSIDER ING THE FACT THAT NO ADDITION HAS BEEN MADE ON THE ISSUE ON WHICH THE PROCEEDINGS U/S 263 HAD BEEN COMPLETED, WE AGREE WITH THE CONTEN TION OF THE LD. AR THAT THE PRESENT APPEAL IS NOW ONLY OF ACADEM IC INTEREST. 5 ITA NO.3484/DEL/2016 THE N AINITAL BANK LIMITED VS. PR.CIT ACCORDINGLY, WE DEEM IT FIT TO DISMISS THE APPEAL A S NOT BEING PRESSED. 7.0 IN THE FINAL RESULT, THE APPEAL OF THE ASSE SSEE STANDS DISMISSED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 31/05/2021. SD/- SD/- (PRASHANT MAHARISHI) (SUDHANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 31/05/2021 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI (DEHRADUN CIRCUIT BENCH, DEHRADUN)