The Alleppey Dist Co- Bank Ltd, Alappuzha V. The ACIT, Alappuzha

ITA 384/COCH/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2372 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-08-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 07-08-2018
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM ITA NO. 384 /COCH/201 8 : ASST.YEAR 2009 - 2010 ITA NO. 385 /COCH/201 8 : ASST.YEAR 2010 - 2011 THE ALLEPPEY DISTRICT CO - OPERATIVE BANK LIMITED PAZHAVEEDU P.O. ALAPPUZHA 688 009. PAN : AAAAT1275B. VS. THE ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 1 ALAPPUZHA. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI.R.KRISHNAN RESPONDENT BY : SMT.A.S.BINDHU, SR.DR DATE OF HEARING : 2 1 .08.201 9 DATE OF PRONOUNCEMENT : 04.09 .2019 O R D E R PER GEORGE GEORGE K, JM THESE APPEALS AT THE INSTANCE OF THE ASSESSEE ARE DIRECTED AGAINST TWO ORDERS OF THE COMMISSIONER OF INCOME - TAX (APPEALS) , BOTH DATED 09.10.2011 . THE RELEVANT ASSESSMENT YEAR S ARE 2009 - 2010 AND 2010 - 2011. COMMON ISSUES ARE RAISED IN THESE APPEALS, HENCE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATE ORDER. 2. THERE IS A DELAY OF 109 DAYS IN FILING THESE APPEALS. THE ASSESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY . THE LEARNED AR FILED AN AFFIDAVIT STATING THAT THE DELAY IN FILING THE APPEAL HAS OCCURRED AS HE WAS SUFFERING FROM BACK AILMENT. THE LEARNED AR HAS ALSO FILED A MEDICAL CERTIFICATE OF SREE RAMAKRISHNA PHARMACY & HOSPITAL, WHEREIN IT IS STATED THAT ITA NO. 384 - 385 / COCH /201 8 M/S. ALLEPPEY DISTRICT CO - OP.BANK LTD . 2 MR.R.KRISHNAN, CHARTERED ACCOUNTANT, WAS FOR TREATMENT OF BACK AILMENT DURING THE RELEVANT PERIOD. WE HAVE PERUSED THE REASONS STATED FOR FILING THE APPEAL BELATEDLY. WE FIND THAT THERE IS SUFFICIENT CAUSE FOR THE DELAYED FILING OF THE APPEA L AND NO LATCHES CAN BE ATTRIBUTED TO THE ASSESSEE. HENCE, WE CONDONE THE DELAY AND PROCEED TO DISPOSE OFF THE APPEALS ON MERITS. 3 . BRIEF FACTS OF THE CASE ARE AS FOLLOWS: - THE ASSESSEE IS A DISTRICT CO - OPERATIVE BANK. T HE ASSESSMENTS WERE COMPLETED U/ S 143(3) OF THE I.T.ACT VIDE ORDER DATED 31.03.2011 AND 28.03.2013, FOR ASSESSMENT YEARS 2009 - 10 AND 2010 - 2011, RESPECTIVELY. T HE ASSESSMENT COMPLETED FOR A.Y. 2009 - 2010 WAS REOPENED BY ISSUANCE OF NOTICE U/S 147 OF THE I.T.ACT, WHEREAS FOR ASSESSMENT YEAR 2010 - 2011, THE CIT(A) VIDE ORDER PASSED U/S 263 OF THE I.T.ACT, SET ASIDE THE ASSESSMENT U/S 143(3) OF THE I.T.ACT DATED 28.03.2013. THE REASON FOR REOPENING THE ASSESSMENT FOR ASSESSMENT YEAR 2009 - 2010 AND INVOKING REVISIONARY PROVISIONS FOR ASSESSMENT Y EAR 2010 - 2011 WAS THAT THERE WAS INCORRECT ALLOWANCE OF DEDUCTION U/S 36(1)(VIIA) OF THE I.T.ACT. SECTION 36(1)(VIIA) OF THE I.T.ACT ALLOWS DEDUCTION TOWARDS PROVISION FOR BAD AND DOUBTFUL DEBTS FOR AN AMOUNT NOT EXCEEDING 10% OF AGGREGATE AVERAGE ADVANCES MADE BY RURAL BRANCHES. THE ASSESSEE HAD CLAIMED DEDUCTION U/S 36(1)(VIIA) OF THE I.T.ACT STATING THAT THE ADVANCES WERE MADE BY THE RURAL BRANCHES. THE DEPARTMENT FOR ASSESSMENT YEARS 2009 - 2010 AND 2010 - 2011 WAS OF THE VIEW THAT THE ITA NO. 384 - 385 / COCH /201 8 M/S. ALLEPPEY DISTRICT CO - OP.BANK LTD . 3 ASSESSEE DID NOT HAVE ANY RURAL BRANCHES IN VIEW OF THE DICTUM LAID DOWN BY THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT V. LORD KRISHNA BANK LTD. [(201 1 ) 339 ITR 606 (KER.)] . THEREFORE, THE ASSESSEES CLAIM OF DEDUCTION U/S 36(1)(VIIA) OF THE I.T.ACT WITH REGARD TO THE ADVANCES MADE BY THE RURAL BRANCHES WAS DISALLOWED. THE RELEVANT FINDING OF THE ASSESSING OFFICER IN THE ORDER PASSED U/S 143(3) R.W.S. 147 OF THE I.T.ACT , FOR ASSESSMENT YEAR 2009 - 2010, READS AS FOLLOW: - SECTION 36(1)(VIIA) DOES NOT ALLOW DEDUCTION TO A CO - OPERATIVE BANK TOWARDS PROVISION FOR NPA. HOWEVER, THIS SECTION ALLOWS A COOPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR PRIMARY CO - OP. AGRICULTURAL AND RURAL DEVELOPMENT BANK, A DEDUCTION TOWARDS PROVISION FOR BAD AND DOUBTFU L DEBTS FOR AN AMOUNT NOT EXCEEDING 10% OF AGGREGATE AVERAGE ADVANCES MADE BY RURAL BRANCHES. HERE, RURAL BRANCH MEANS BRANCH SITUATED IN A PLACE, WHICH HAS A POPULATION OF NOT MORE THAN 10,000 AS PER THE LATEST CENSUS ON THE FIRST DAY OF THE RELEVANT PY. THE ASSESSEE HAS FURNISHED A LIST OF RURAL BRANCHES AND ADVANCES MADE BY THESE 43 BRANCHES. OF THIS, 24 BRANCHES HAVE POPULATION OF MORE THAN 10,000 (CENSUS OF INDIA 2001) AND HENCE NOT COMING UNDER THE NOMENCLATURE RURAL BRANCHES. IN THE CASE OF THE BAL ANCE 19 BRANCHES, THE PLACES LISTED OUT ARE ONLY PART OF A VILLAGE. SINCE SEVERAL WARDS MAY COME WITHIN A VILLAGE, PART OF A VILLAGE COULD NOT BE CONSIDERED AS A RURAL BRANCH AS REPORTED IN THE CASE OF CIT V. THE LORD KRISHNA BANK LTD. 4 . AGGRIEVED BY TH E ASSESSMENTS COMPLETED U/S 143(3) R.W.S. 147 OF THE I.T.ACT FOR ASSESSMENT YEAR 2009 - 2010 AND ASSESSMENT COMPLETED U/S 143(3) R.W.S. 263 OF THE I.T.ACT FOR ASSESSMENT YEAR 2010 - 2011, THE ASSESSEE PREFERRED APPEALS ITA NO. 384 - 385 / COCH /201 8 M/S. ALLEPPEY DISTRICT CO - OP.BANK LTD . 4 BEFORE THE FIRST APPELLATE AUTHORITY. THE CIT(A) CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER. 5 . AGGRIEVED BY THE ORDERS OF THE CIT(A), THE ASSESSEE HAS FILED THESE APPEALS BEFORE THE TRIBUNAL. FOR ASSESSMENT YEAR 2009 - 2010, TWO ISSUES WERE RAISED IN THE GROUND, HOWEVER, THE LEARNED A R DID NOT PRESS THE ISSUE RELATING TO REOPENING OF THE ASSESSMENT. HENCE, GROUND NO.1 TO 3 IN ITA NO.384/COCH/2008 ARE DISMISSED. THE SURVIVING GROUND, VIZ., GROUND NO.4 RELATES TO THE ISSUE ON MERITS, WHETHER THE CIT(A) WAS JUSTIFIED IN CONFIRMING THE DI SALLOWANCE MADE BY THE ASSESSING OFFICER U/S 36(1)(VIIA) OF THE I.T.ACT. FOR ASSESSMENT YEAR 2010 - 2011, THE ONLY ISSUE RAISED IS REGARDING THE DISALLOWANCE U/S 36(1)(VIIA) OF THE I.T.ACT. THE LEARNED AR FAIRLY CONCEDED THAT THE ISSUE ON MERITS IS COVERED A GAINST THE ASSESSEE BY THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT V. THE LORD KRISHNA BANK LTD. (SUPRA) . THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS DULY HEARD. 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECOR D. THE LEARNED AR HAS FAIRLY CONCEDED THAT THE ISSUE ON MERITS IS COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. THE LORD KRISHNA BANK LTD. (SUPRA) . IN VIEW OF THE SUBMISSION MADE BY THE LEARNED AR, THE APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2009 - 2010 AND 2010 - 2011 ARE DISMISSED. ITA NO. 384 - 385 / COCH /201 8 M/S. ALLEPPEY DISTRICT CO - OP.BANK LTD . 5 7 . IN THE RESULT, THE APPEAL S FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 04 TH DAY OF SEPTEMBER , 2019 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN ; DATED : 04 TH SEPTEMBER , 2019 . DEVDAS* COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT 2. THE RESPONDENT. 3. THE PR.CIT, KOTTAYAM. 4. THE CIT(APPEALS) KOTTAYAM . 5. DR, ITAT, COCHIN 6 . GUARD FILE.