Kendrapada Urban Co-Operative Bank Ltd., Kendrapada V. ACIT, Circle-1(2), Cuttack

ITA 376/CTK/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5318 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 24-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K BANDYOPADHYAY
• Keywords: Bad and doubtful debts

Judgement Text

1 ITA NO. 376/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 376 /CTK/2016 ASSESSMENT YEAR : 201 1 - 2012 KENDRAPARA URBAN CO - OPERATIVE BANK LTD., COLLEGE SQUARE, TINIMUHANI, KENDRAPARA. VS. ACIT, CIRCLE 1(2), CUTTACK PAN/GIR NO. AAATK 8347 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI S.K.BANDYOPADHYAY, DR DATE OF HEARING : 1 3 /1 2 / 2017 DATE OF PRONOUNCEMENT : 14 / 1 2 / 2017 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - CUTTACK DATED 27.3.2015 FOR THE ASSESSMENT YEAR 2011 - 12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1.THAT, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), CUTTACK [HEREINAFTER REFERRED AS 'THE LEARNED CIT (A)'] HAS COMMITTED SERIOUS ERROR IN NOT QUASHING THE ASSESSMENT ORDER PASSED BY THE LEARNED ASSESSING OFFICER WHICH IS PER SE ILLEGAL, UNJUST, WITHOUT JURISDICTION, ARBITRARY AND CONTRARY TO THE PROVISIONS OF THE ACT AND HAS BEEN PASSED ON GROSS VIOLATION TO THE PRINCIPLES OF NATURAL JUST ICE. 2. THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT QUASHING THE ASSESSMENT ORDER WHICH HAS BEEN PASSED ON THE BASIS OF ILLEGAL NOTICE U/S 143(2) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED AS 'THE ACT'). 2 ITA NO. 376/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 3.THAT, THE LEARNED CIT (A ) HAS COMMITTED SERIOUS ERROR IN NOT DELETING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER OF RS.1,16,05,262/ - U/S 36(1)(VIIA)(A) OF THE ACT. 4 . THAT, THE LEARNED CIT(A) HAS COMMITTED SERIOUS ERROR IN DISALLOWING OF AMOUNT OF RS.2,37,600/ - U/S 40(A) (IA) OF THE ACT. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE MATTER WAS CALLED FOR HE A RING. HOWEVER, AN ADJOURNMENT PETITION DATED 11.12.2017 IS FILED BY LD A.R. OF THE ASSESSEE STATING THAT ON THE DATE OF HEARING HE IS PREOCCUPIED DUE TO PROFESSIONAL ENGAGEMENT AND, THEREFORE, IS UNABLE TO ATTEND THE HEARING AND HENCE, REQUESTED FOR ADJOURNING THE HEARING TO SOME OTHER DATE. THE BENCH DID NOT FIND THE REASON FOR SEEKING ADJOURNMENT AS A PLAUSIBLE ONE. HENCE, THE ADJOURNMENT PETIT ION WAS REJECTED AND THE APPEAL WAS DISPOSED OF AFTER HEARING LD D.R. AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. GROUND NOS.1 & 2 OF APPEAL ARE GENERAL IN NAT URE AND HENCE, REQUIRES NO SEPARATE ADJUDICATION. 4. AS REGARDS TO GROUND NO.3 OF APPEAL, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO - OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING. IT FILED THE RETURN OF INCOME DECLARING RETURNED INCOME OF RS.36,44,350/ - . THE ASSESSING OFFICER FOUND THAT THE ASSESSEE IN THE RETURN OF INCOME HAD CLAIMED PROVISION FOR BAD AND DOUBTFUL ASSETS (NPA) AND PROVISION FOR RECOVERING TOTALLING TO RS.1,28,41,716/ - . THE ASSESSING OFFICER OBSERVED THAT AS PER THE PROVISION OF SECTION 36(1)(VIIA)(A) OF THE ACT, PROVISION FOR BAD AND DOUBTFUL DEB TS IS ALLOWED IN RESPECT OF A 3 ITA NO. 376/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 SCHEDULED BANK OR A NON - SCHEDULED BANK OR A CO - OPERATIVE BANK @ 7.%% OF THE TOTAL INCOME(COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER - VIA). HE ALSO OBSERVED THAT IN THE ASSESSMENT YEAR 2009 - 2010, THE CIT (A) HAS ALSO CONFIRMED THE ADDITION MADE UNDER THE HEAD PROVISION FOR BAD AND DOUBTFUL DEBTS. IN VIEW OF ABOVE, THE ASSESSING OFFICER OBSERVED THAT 7.5% OF THE TOTAL INCOME COMPUTED BEFORE MAKING ANY DEDUCTION UNDER SECTION PROVISION AND UNDER CHAPTER VIA OF THE ACT AS PER THE PROVISIONS OF SECTION 36(1)(VIIA)(A) OF THE ACT IS ALLOWABLE TO THE ASSESSEE AND, ACCORDINGLY, DISALLOWED RS.1,16,05,262/ - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 6. AFTER HEARING LD D.R. AND PERUSING THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT THE ASSESSING OFFICER HAS ALLOWED 7.5% OF THE TOTAL INCOME COMPUTED BEFORE MAKING ANY DEDUCTION UNDER SUCH PROVISION AND UNDER CHAPTER VIA OF THE ACT , WHICH IS ALLOWABLE TO A SCHEDULED BANK OR A NON - SCHEDULED BANK OR A CO - OPERATIVE BANK. IT IS ALSO NOTED BY THE CIT(A) THE VIEW OF THE ASSESSING OFFICER IS IN CONFORMITY WITH THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 2009 - 2010. HENCE, WE FIND NO S PECIFIC MISTAKE IN THE ORDER OF THE CIT( A) WHICH IS HEREBY CONFIRMED AND GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 7. IN GROUND NO.4 OF APPEAL, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF RS.2,37,600/ - U/S.40(A)(IA) OF THE ACT. 4 ITA NO. 376/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 8. `THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CLAIMED EXPENSES OF RS.2,37,600/ - TOWARDS AUDIT FEE ON WHICH REQUIRED TAX WAS NOT DEDUCTED U/S.194 OF THE ACT. THEREFORE, THE ASSESSING OFFICER DISALLOWED RS.2,37,600/ - AND ADDED T HE SAME TO THE TOTAL INCOME OF THE ASSESSEE AS PER SECTION 40(A)(IA) OF THE ACT. 9. ON APPEAL, THE CIT(A) CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 10. BEFORE US, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 11. AFTER HEARING LD D.R. AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS NOT DEDUCTED ANY TAX AGAINST THE PAYMENT OF RS.2,37,600/ - TOWARDS AUDIT FEES AS PER SECTION 40(A)(IA) OF THE ACT. BEFORE US ALSO, NO EVIDENCE WAS FILED TO SUBSTANTIATE THA T THE TAX HAS BEEN DEDUCTED FROM THE SAID PAYMENT. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND GROUND OF APPEAL IS REJECTED. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUN CED ON 14 /1 2 /2017. SD/ - SD/ - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 14 /1 2 /2017 B.K.PARIDA, SPS 5 ITA NO. 376/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : KENDRAPARA URBAN CO - OPERATIVE BANK LTD., COLLEGE SQUARE, TINIMUHANI, KENDRAPARA 2. THE RESPONDENT. ACIT, CIRCLE 1(2), CUTTACK 3. THE CIT(A) - CUTTACK 4. PR.CIT - CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//