M/s Zila Sahkari Bank Ltd., Jhansi V. DCIT-6, Jhansi

ITA 42/AGR/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0378 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-10-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: R C TOMAR I T P
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 42/AGRA/2011 ASSTT. YEAR : 2005-06 M/S. ZILA SAHKARI BANK LTD., VS. D.C.I.T. 6, J HANSI. CIVIL LINES, JHANSI. (PAN : AAALJ 0007C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.C. TOMAR, ITP. RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 15.02.2013 DATE OF PRONOUNCEMENT OF ORDER : 22.02.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-II, AGRA DATED 21.10.2010 FOR THE ASSESSMENT YEAR 2005- 06 ON THE FOLLOWING GROUNDS : 1. THAT THE AO HAS ERRED ON FACTS AND IN LAW IN DI SALLOWING THE PROVISION OF NPA AT RS.17,45,775/- DEBITED AS P ER RBI GUIDELINES WHICH IS ALLOWABLE U/S. 36(1)(VIIA) OF IT ACT. 2. THAT THE AO HAS ERRED ON FACTS AND IN LAW IN H OLDING THE DEDUCTION U/S. 36(1)(VIIA) IS NOT ALLOWABLE TO THE ASSESSEE BANK WHICH IS A COOPERATIVE BANK AND HAD FAILED TO APPRECIATE THAT IN THE PRECEDING AND SUBSEQUENT ASSESSMENT YEARS THE ASSES SEES CLAIM HAS BEEN ACCEPTED U/S. 143(3). ITA NO. 42/AGRA/2011 2 2. THE ASSESSEE IS A CO-OPERATIVE SOCIETY AND IS RE GISTERED UNDER THE REGISTRAR OF CO-OPERATIVE SOCIETIES, U.P. AND IS ENGAGED IN B ANKING BUSINESS. THE ASSESSEE HAS DEBITED RS.17,45,775/- AS PROVISIONS OF NPA. TH E ASSESSEE WAS REQUIRED TO EXPLAIN THE ALLOWABILITY OF THE SAME AND CLAIMED BE FORE THE AO THAT THE SAID CLAIM HAS BEEN MADE AS PER RBI GUIDELINES AND SAME IS COV ERED U/S. 36(1)(VIIA). THE AO, HOWEVER, DID NOT ALLOW THE CLAIM OF THE ASSESSEE AN D MADE THE ADDITION. HOWEVER, ON THE TOTAL INCOME, DEDUCTION WAS ALLOWED U/S. 80P (2) OF THE IT ACT AND INCOME OF THE ASSESSEE WAS ASSESSED AT NIL INCOME. THE LD. CIT(A) DID NOT DECIDE THIS ISSUE AND HELD THAT SINCE ULTIMATELY THE CLAIM HAS BEEN A LLOWED ON THE AFORESAID ADDITION U/S. 80P(2) OF THE IT ACT, THEREFORE, RELIEF ALREAD Y ALLOWED IN DIFFERENT PROVISION WOULD NOT BE ENTITLED FOR ASSESSEE TO CLAIM DEDUCTI ON UNDER THE ABOVE PROVISION. THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY DISMISSE D. 3. EARLIER, THE APPEAL WAS DISMISSED BY THE TRIBUNA L FOR NON-APPEARANCE OF THE ASSESSEE VIDE ORDER DATED 11.10.2011.THE SAME ORDER WAS RECALLED WHILE ALLOWING MISCELLANEOUS APPLICATION OF ASSESSEE IN MA NO. 35/ AGRA/2012 VIDE ORDER DATED 08.02.2013 AND THE APPEAL WAS TAKEN UP FOR HEARING ON MERITS. 4. THE LD. COUNSEL FOR THE ASSESSEE FILED COPY OF A SSESSMENT ORDER FOR PRECEDING ASSESSMENT YEAR 2004-05 ALONG WITH BALANCE SHEET AN D SUBMITTED THAT SIMILAR CLAIM ITA NO. 42/AGRA/2011 3 OF ASSESSEE HAS BEEN ALLOWED BY THE AO IN THE REGUL AR ASSESSMENT ORDER U/S. 143(3) DATED 29.11.2006. THEREFORE, THE LD. CIT(A) SHOULD HAVE DECIDED THE ISSUE ON MERITS AS IT IS COMING UP REGULARLY IN ALL THE YEAR S. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. ON CONSIDERATION OF THE FACTS OF THE CASE AS NOT ED ABOVE, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEV EL OF THE LD. CIT(A). THE AO ALLOWED SIMILAR CLAIM OF ASSESSEE IN PRECEDING ASSE SSMENT YEAR 2004-05 AS PER THE DOCUMENTS FILED BY THE LD. COUNSEL FOR THE ASSESSEE AND ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, SIMILAR ISSUE IS COMING U P IN OTHER YEARS ALSO. THEREFORE, THE LD. CIT(A) SHOULD HAVE DECIDED THE ISSUE ON MER ITS. FURTHER, WE FIND THAT THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT DECIDING THIS ISSUE ON MERITS MERELY ON THE REASONS THAT ULTIMATELY INCOME OF THE ASSESSEE IS HELD TO BE NIL EVEN AFTER MAKING THE AFORESAID ADDITION BY ALLOWING CLA IM OF ASSESSEE U/S. 80P(2) OF THE IT ACT. SUCH A REASON IS NOT VALID TO DISMISS THE A PPEAL OF THE ASSESSEE. EVEN IF THE INCOME OF THE ASSESSEE IS COMPUTED AT NIL INCOME BY ITSELF IS NO REASON TO DISMISS THE APPEAL OF THE ASSESSEE PARTICULARLY WITHOUT DEC IDING THE ISSUE IN APPEAL ON MERITS. ACCORDING TO SECTION 250(6) OF THE IT ACT, THE LD. CIT(A) IS REQUIRED TO DECIDE THE APPEAL ON MERIT GIVING REASONS FOR DECIS ION IN THE APPELLATE ORDER, DETERMINING THE ISSUE BEFORE HIM. ORDER OF THE LD. CIT(A) IS, THEREFORE, NOT ITA NO. 42/AGRA/2011 4 SUSTAINABLE IN LAW. WE ACCORDINGLY SET ASIDE THE OR DER OF THE LD. CIT(A) AND RESTORE THE ISSUE INVOLVED IN THE PRESENT APPEAL TO HIS FIL E WITH THE DIRECTION TO RE-DECIDE THE APPEAL OF THE ASSESSEE ON MERITS ON THE GROUNDS RAISED BY ASSESSEE BEFORE HIM BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY