The Dabhla Co-opertive Gram Service Society Ltd., Bilaspur V. DCIT, Circle , Mandi

ITA 391/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3406 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 02-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: B M MONGA; ROHIT KUMAR S
• Keywords: Condonation of delay; Bonafide mistake
• Section: 80P; 6; 56

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.391/CHD/2018 ASSESSMENT YEAR: 2012-13 DCIT, CIRCLE MANDI, MANDI, HIMACHAL PRADESH VS THE DABHLA COOPERATIVE GRAM SERVICE SOCIETY LTD., VILLAGE & P.O. KOTHI, TEHSIL, GHUMANWIN, DISTRICT BILASPUR, HIMACHAL PRADESH PAN AABTT3042Q (RESPONDENT) (APPELLANT) APPELLANT BY : SH. B.M. MONGA AND SH. ROHIT KUMAR, ADVOCATES RESPONDENT BY : SH. MANJIT SINGH, SR. DR DATE OF HEARING : 14/02/2019 DATE OF PRONOUNCEMENT : 30/04/2019 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE COOPERATIVE SOCIETIES AGAINST THE ORDER DATED 02.11 .2017 OF THE COMMISSIONER OF THE INCOME TAX (APPEALS) (IN SHORT THE CIT(A). 2. THERE IS A DELAY OF 48 DAYS IN FILING THE APPEAL. AN APPLICATION FOR CONDONATION OF DELAY ACCOMPANIED WITH THE AFFIDAVIT F ILED OF SHRI SATYA BRAT SHARMA, SECRETARY OF THE ASSESSEE SOCIETY HAS BEEN F ILED. THE CONTENTS OF THE AFFIDAVIT READ AS UNDER: 2 1. THAT I AM PRESENTLY WORKING AS SECRETARY WITH T HE THE DABHLA CO-OPERATIVE GRAM SERVICE SOCIETY LTD., VILLAGE & P. O. KOTHI, TEHSIL GHUMARWIN, DISTRICT BILASPUR, HIMACHAL PRADES H, PAN: AABTT3042Q' AND FURTHER LOOKING AFTER ALL THE ACCOU NTS AND OTHER TAX MATTERS INCLUDING INCOME TAX MATTERS AND INCOME TAX APPEALS OF THE SAID SOCIETY. 2. THAT THE ORDER OF CIT(A), SHIMLA IN RESPECT OF TH E AFOREMENTIONED SOCIETY FOR THE ASSESSMENT YEAR 2012 -13, WAS RECEIVED ON 15.12.2017. AFTER CONSULTING THE COUNSE L OF THE SOCIETY SH. RAJESH SHARMA, IT WAS DECIDED TO FILE T HE APPEAL BEFORE HON'BLE ITAT, CHANDIGARH AND IT WAS GOT PREPARE D AND RECEIVED BACK FOR THE SIGNATURES. 3. THAT I, THE ABOVE NAMED DEPONENT, RECEIVED BACK THE DU LY FILLED FORM NO.36 FROM THE COUNSEL AND THEN I, PUT THE APPEAL PAPERS IN THE FOLDER OF THE ASSESSEE AND I WAS UNDER THE IMPRESSION THAT THE SAME HAS SINCE BEEN FILED/DISPATC HED TO THE COUNSEL AT CHANDIGARH. 4. THAT NOW, WHEN I WAS SEARCHING SOME PAPERS IN THE FO LDER OF THE SOCIETY REGARDING SOME INCOME TAX WORK AND I FO UND THAT THE APPEAL DOCUMENTS ARE LYING IN THE SAME AND HAVE N OT BEEN SENT TO THE COUNSEL AT CHANDIGARH AND THEREFORE THE APPEAL HAS NOT BEEN FILED BEFORE THE HON'BLE COURT. 5. THAT WHATEVER DELAY HAS OCCURRED, IT IS DUE TO MIST AKE ON THE PART OF THE UNDERSIGNED. THEREFORE, IT IS PRAYED THA T WHATEVER PREJUDICE HAS BEEN CAUSED TO THE AFORESAID SOCIETY, IS DUE TO THE BONAFIDE MISTAKE OF THE UNDERSIGNED FOR WHICH T HE SOCIETY SHOUID NOT SUFFER AND CONDONING THE DELAY I N FILING THE APPEAL WILL NOT CAUSE ANY PREJUDICE TO THE 'REVEN UE' AND FURTHER WILL SERVE THE CAUSE OF JUSTICE AND MEET TH E ENDS OF JUSTICE. 3. AFTER HEARING OF BOTH THE PARTIES AND PERUSING THE APPLICATION FOR CONDONATION OF DELAY, IT SEEMS THAT THERE IS NO INT ENTIONAL OR DELIBERATE DELAY IN FILING THE APPEAL BUT THE SAME IS DUE TO ABOVE STATED BONA FIDE MISTAKE OF THE SECRETARY OF THE ASSESSEE SOCIETY, HENCE THE DE LAY IS CONDONED. 4. THE ASSESSEE IN ITS APPEAL HAS RAISED THE FOLLOW ING GROUNDS: 3 1. THAT THE ORDER OF LD. CIT(A) IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDIN G THE DISALLOWANCE OF RS. 7,77,211/- ON WHICH THE APPELLANT HAS RIGHTLY CLAIMED DEDUCTION U/S 80P. 3. THAT THE LEARNED CIT(A) HAS ERRED IN DENYING THE DEDUCTION U/S 80P ON RS. 7,77,211/- WHICH HAS BEEN RIGHTLY CLAIMED BY THE APPELLANT AS PER THE WELL SETTLED LAW. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD AND DISPOSED OFF. 5. THE ASSESSEE IN ITS APPEAL HAS AGITATING THE ACT ION OF THE LD. CIT(A) IN UPHOLDING THE DISALLOWANCE OF RS.7,77,211 /- MADE BY THE ASSESSING OFFICER BY WAY OF DENYING THE DEDUCTION U /S 80P OF THE ACT. 6. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLA NT SOCIETY HAD CREDITED RS.7,77,211/- TO ITS PROFIT AND LOSS A CCOUNT OF THE CURRENT YEAR UNDER THE HEAD NPA PROVISION WRITTEN BACK AND CLAIMED DEDUCTION OF THE SAID AMOUNT UNDER THE PROV ISIONS OF SECTION 80P OF THE ACT. HOWEVER, THE AO NOTICED THA T THE SAID PROVISION WAS DEBITED TO P & L ACCOUNT IN THE PRECE DING A.Y. 2011-12. IT WAS THEN ADDED BACK TO THE INCOME IN TH E COMPUTATION OF TOTAL INCOME AND DEDUCTION U/S 80P W AS CLAIMED ON THE TOTAL INCOME INCLUDING THE AFORESAID AMOUNT OF RS.7,77,211/- DURING THE A.Y. 2011-12. DURING THE Y EAR UNDER 4 CONSIDERATION, THE ASSESSEE CREDITED THE SAID AMOUN T AS NPA PROVISION W/BACK IN THE P&L ACCOUNT AND AGAIN CLAI MED DEDUCTION U/S 80P ON THE SAID AMOUNT. THE AO HOWEVE R, HELD THAT NPA PROVISION W/BACK AND MISCELLANEOUS INCOME WOU LD FALL UNDER THE HEAD INCOME FROM OTHER SOURCES AND WAS TA XABLE U/S 56 OF THE ACT. HE, THEREFORE, DENIED THE DEDUCTION U/S 80P OF THE ACT ON THE AFORESAID AMOUNT AND CREDITED THE SAME I NTO THE TAXABLE INCOME OF THE ASSESSEE. 7. IN APPEAL, LD. CIT(A), HELD THAT THE AO WAS NOT JUSTIFIED TO HOLD THAT NPA PROVISION OF RS.7,77,211/- WAS INCOME FROM OTHER SOURCES AND TAXABLE U/S 56 OF THE ACT. HE, HOWEVER, OBSERVED THAT SINCE THE ASSESSEE HAD ALREADY CLAIMED DEDUCTION U/ S 80P OF THE ACT ON THE SAID AMOUNT IN PRECEDING A.Y. 2011-12, H ENCE, THE DEDUCTION CANNOT BE ALLOWED SECOND TIME ON THE SAID AMOUNT AS IT WILL AMOUNT TO DOUBLE DEDUCTION. HE, THEREFORE, UPHELD THE ADDITION MADE BY THE AO OF RS.7,77,211/-. 8. BEING AGGRIEVED BY THE ABOVE ORDER OF THE LD. CI T(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. 5 10. THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OU R ATTENTION TO THE DETAILS OF P& L ACCOUNT AS REPRODUCED BY THE LD . CIT(A) IN THE IMPUGNED ORDER ITSELF AND EXPLAINED THAT THOUGH IN THE P&L ACCOUNT, THE ASSESSEE HAD CREDITED PROVISION FOR NP A OF THE AFORESAID AMOUNT, HOWEVER, WHILE COMPUTING THE INCO ME FOR A.Y. 2011-12 THE ASSESSEE HAD ADDED THE SAID AMOUNT INTO ITS INCOME AS INADMISSIBLE EXPENDITURE AND THEREAFTER DEDUCTIO N WAS CLAIMED U/S 80P ON THE NET PROFIT IN ACCORDANCE WIT H LAW. THAT SINCE THE ASSESSEE HAD ALREADY BOOKED THE SAID AMOU NT OF RS.7,77,211/- AS INCOME FOR A.Y. 2011-12 AND DID NO T CLAIM THE SAME AS EXPENDITURE, HENCE, WRITING BACK THE SAID P ROVISION DURING THE CURRENT YEAR IN THE P&L ACCOUNT HAS NO E FFECT ON THE TAXABLE INCOME. THAT IT IS AN ACCOUNTING ENTRY IN T HE P&L ACCOUNT OF THE ASSESSEE, HOWEVER, SINCE THE SAID AMOUNT WAS NEITHER CLAIMED AN EXPENDITURE IN A.Y. 2011-12, HENCE, ADDI NG BACK THE SAID EXPENDITURE IN THE PROFIT AND LOSS ACCOUNT IS JUST AN ACCOUNTING ENTRY AND CANNOT BE TERMED AS INCOME OF THE YEAR. SINCE THE SAID AMOUNT DOES NOT FALL IN THE DEFINITI ON OF THE INCOME, HENCE, THERE IS NO QUESTION OF DISALLOWANCE OF DEDUCTION ON THE SAID AMOUNT. WE AGREE WITH THE ABOVE CONTENT ION OF THE LD. COUNSEL FOR THE ASSESSEE. THE WRITING BACK OF NPA PROVISION IS THE ACCOUNTING ENTRY OF THE ASSESSEE FOR ITS ACCOUN TING PURPOSES. 6 HOWEVER, SO FAR AS THE COMPUTATION OF INCOME IS CON CERNED, SINCE THE ASSESSEE HAD NOT CLAIMED THE SAID AMOUNT AS EXP ENDITURE IN THE EARLIER ASSESSMENT YEAR, HENCE THE WRITING BACK TO THE SAID PROVISION DURING THE CURRENT YEAR WOULD NOT FALL IN THE DEFINITION OF THE INCOME OF THE YEAR UNDER CONSIDERATION. 11. IN VIEW OF ABOVE OBSERVATIONS, THE SAID AMOUNT CANNOT BE TERMED AS INCOME OF THE ASSESSEE FOR THE YEAR CONSI DERATION, HENCE, THE ADDITION MADE BY THE LOWER AUTHORITIES I S NOT WARRANTED AND THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 30.0 4.2019. `SD/- SD/- (ANNAPURNA GUPTA) ( SANJY GARG) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED : 30/ 04/2019 AKS- TOUR COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, THE C IT(A), THE DR