DCIT, Circle-1(1), Bhubaneswar, Bhubaneswar V. M/s . The Orissa State Co-operative Agricultural & Rural Development Bank Ltd., Bhubaneswar

ITA 424/CTK/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3803 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 11-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B N DAS
• Keywords: Revised return
• Section: 142(1)

Judgement Text

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.424/CTK/2014 ASSESSMENT YEAR : 2011 - 2012 DCIT, CIRCLE 1(1), BHUBANESWAR. VS. THE ORISSA STATE CO - OPERATIVE AGRICULTURAL & RURAL DEVELOPMENT BANK LTD., A/34, J.N.MARG, KHARVEL NAGAR, UNIT - III, BHUBANESWAR. PAN/GIR NO. AABAT 0086 F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI J.K.MI SHRA REVENUE BY : SHRI B.N.DAS , DR DATE OF HEARING : 30 /05/ 2017 DATE OF PRONOUNCEMENT : 31 /05/ 2017 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR , DATED 14.8.2014 , FOR THE ASSESSMENT YEAR 2011 - 12 . 2. AT THE TIME OF HEARING, LD A.R. OF THE ASSESSEE HAS FILED AN ADJOURNMENT PETITION ON THE GROUND THAT THE CONDUCTING LAWYER SHRI A.K.RAY IS UNABLE TO APPEAR FOR HEARING DUE TO HIS SEVERE ILLNESS. SINCE THE 2 ITA NO.424/CTK/2014 ASSESSMENT YEAR : 2011 - 2012 APPEAL CAN BE DECIDED, W E REJECT ED THE ADJOURNMENT AND PROCEED TO DECIDE THE APPEAL ON MERITS. 3 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CI(A) IS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO TO TAKE THE INCOME AT NIL IN PLACE OF THE INCOME ASSESSED BY THE AO, WHEN THE LD CIT(A) UPHELD THE AOS ACTION IN IGNORING THE AUDIT REPORT BASED ON PROVISIONAL ACCOUNTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) IS NOT JUSTIFIED IN NOT ADJUDICATING ON THE ISSUE OF CARR Y FORWARD AND SET OFF OF LOSSES CLAIMED BY THE ASSESSEE. 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A STATE CO - OPERATIVE BANK AND FILED THE R ETURN OF INCOME ON 29.9.2011 DECLARING TOTAL INCOME AT RS. NIL . T HE R ETURN OF INCOME WAS PROCESSED U/ S.143(1) OF THE ACT AND THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. NOTICES U/S.143(2) AND 142(1) WERE ISSUED . IN COMPLIANCE, THE LD A.R. OF THE ASSESSEE APPEARED FROM TIME TO TIME AND THE CASE WAS DISCUSSED. THE ASSESSING OFFICER ON THE BASIS OF FI NANCIAL STATEMENT S FOUND THAT THE ASSESSEE SOCIETY BOOKS OF ACCOUNTS ARE A UDITED U/S.44A B OF THE ACT AND FILED THE R ETURN OF INCOME AS PER THE PROVISIONAL INFORMATION AVAILABLE WITH AUDITORS . THE ASSESSEE IS A CO - OPERATIVE SOCIETY GOVERNED BY STATUTORY A UDIT AND AUDIT WAS COMPLETED ON 19.10.2012 AND T HE A SSESSING OFFICER CONSIDERED THE STATUTORY AUDIT REPOR T IN THE ASSESSMENT PROCEEDINGS BUT S INCE THE ASSESSEE SOCIETY HAS NOT FILED THE R EVISED RETURN OF INCOME AND THE STATUTORY AUDIT WAS NOT DONE AND WH EREAS TAX AUDIT IS BASED ON THE PROVISIONAL FIGURE S , THE ASSESSING OFFICER REJECTED THE ACCOUNTS U/S.145(3) AND DID NOT ALLOW B USINESS LOSS 3 ITA NO.424/CTK/2014 ASSESSMENT YEAR : 2011 - 2012 TO BE CARRIED FORWARD ON T HE BASIS OF PROVISIONAL ACCOUNT S AND ASSESSED INCOME AT RS.1,49,99,840/ - AND PASSED ORDER U/S.143(3) R.W.S. 145(3 ) OF THE INCOME TAX ACT, 1961 O N 6.2.2014. 5 . AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE HAS FILED APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS, LD A.R. OF THE ASSESSEE ARGUED AND SUPPORTED WITH WRITTEN SUBMISSION ON NATURE O F ACTIVITIES CONDUCTED AND THE R EASONS FOR NOT FILING THE STATUTORY AUDIT REPORT. THE CIT(A) HAVING CONSIDERED THE WRITTEN SUBMISSIONS AND THE FINDINGS OF THE ASSESSING OFFICE R OBSERVED THAT THE ASSESSEE HAS FILED RETURN O F INCOME U/S.139(3) R.W.S. 139(1) ON 29.9.2011 CLAIMING CURRENT YEAR LOSS OF RS.1,38,03,189/ - WHEREAS THE ASSESSING OFFICER RELIED ON THE JUDICIAL DECISION AND OBSERVED THAT SINCE NO REVISED RETURN WAS FILED, DECLINED TO ACCEPT THE TAX AUDIT REPORT. THE C IT(A) OBSERVED THE ACCOUNTS ARE NOT APPROVED BY THE AUDITOR GENERAL O F CO - OPERATIVE SOCIETY, ORISSA AS THE STATUTORY AUDIT REPORT OBTAINED AFTER T HE TAX AUDIT REPORT U/S. 44AB. THE ASSESSEE HAS FILED AUDIT REPORT B ASED ON THE PROVISIONAL ACCOUNT S AND TH E ASSESSING OFFICER HAS NOT ISSUED NOTICE U/S.139(9 ) TO RECTIFY THE DEFECT. THE CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HAS FILED A UDIT REPORT WITHIN TIME FRAME OF ASSESSMENT PROCEEDINGS AS THERE WAS DELAY IN GETTING ACCOUNTS AUDITED BY THE AUDITOR G ENERAL OF CO - OPERATIVE SOCIETY, ORISSA AND FURTHER THE ASSESSEE HAS COMPLIED WITH THE PROVISIONS U/S.44AB OF THE ACT AND THE ASSESSING OFFICER WAS NOT CORRECT TO RELY ON TH E SAME AUDIT REPORT IGNORING AUDITED P&L ACCOUNT AND DIRECTED THE ASS ESSING OFFICER TO 4 ITA NO.424/CTK/2014 ASSESSMENT YEAR : 2011 - 2012 CONSIDER THE A SSESSED INCOME AT NIL AND PARTLY ALLOWED THE APPEAL BY ORDER DATED 14.8.2014. 6. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVENUE HAS FILED APPEAL BEFORE THE TRIBUNAL. LD D.R. SUBMITTED THAT THE CIT(A) HAS ERRED IN NOT CONSIDERING THE FI NDINGS OF THE ASSESSING OFFICER AND DIRECTING THE ASSESSING OFFICE R TO CONSIDER THE INCOME AS NIL. T HE ASSESSING OFFICER HAS CONSIDERED THE STATUTORY AUDITED A CCOUNTS BUT BECAUSE NO R EVISED RETURN WAS FILED HENCE CLAIM WAS DECLINED AND THE CIT(A) ERRED IN NOT CALLING FOR COMMENTS FROM THE ASSESSING OFFICER AND PRAYED FOR ALLOWING THE APPEAL. 7. WE HEARD LD D.R. AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. PRIMA FACIE, WE FIND THAT THE ASSESSEE BEING A CO - OPERATI VE S OCIETY IS ENGAGED IN THE BUSINESS OF PROVIDING AGRICULTURAL LOAN IN RURAL AREAS TO THE FA RMERS. THE ASSESSEE HAS FILED RETURN OF INCOME WITHIN DUE DATE U/S.139(1) OF THE ACT . THE STATUTORY AUDIT HAS TO BE CONDUCTED BY THE AUDITOR GENERAL OF COOPERAT IVE SOCIETY, ORISSA, AND SINCE IT WAS NOT COMPLETED BEFORE FILING OF R ETURN OF INCOME ON DUE DATE, THE ASSESSEE HAD N O OTHER OPTION BUT TO FILE THE R ETURN OF INCOME UNDER SECTION 139(1) OF THE ACT ALONGWITH T AX AUDIT REPORT U/S.44AB OF THE ACT IN FORM 3CA AND 3CD. THE ASSESSEE HAD COMPLIED WITH THE PROVISIONS OF FILING RETURN OF INCOME WITHIN TIME LIMIT U/S.139(1) OF THE ACT AND IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS IGNORED THIS FACT S AND ALSO ACCEPTED THE ST ATUTORY AUDIT REPORT DATED 19.10 .2012 BUT HAS OMITTED TO CONSIDER THE REPORT. WE ARE OF THE OPINION THAT THE ASSESSING OFFICER 5 ITA NO.424/CTK/2014 ASSESSMENT YEAR : 2011 - 2012 SHOULD HAVE CONSIDERED AND ACCEPT THE AUDIT REPORT WITH REASONS EXPLAINED FOR THE DELAY. ACCORDINGLY, IN THE IN TEREST OF JUSTICE, WE REMIT THE DISPUTED ISSUE TO THE FILE OF THE ASSESSING OFFICER TO VERIFY AND EXAMINE AND PASS THE ORDER ON MERITS AND THE ASSESSEE SHALL BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING AND SHALL CO - OPERATIVE IN FILING IN STATUTORY AUDIT REPORT AND OTHER DETAILS IN RE SPECT OF CLAIM BEFORE PASSING THE ORDER 8. IN THE RESULT, THE APPEAL F ILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. OR DER PRONOUNCED ON 31 /05/ 2017. SD/ - SD/ - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 31 /05/2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : DCIT, CIRCLE 1(1), BHUBANESWAR. 2. THE RESPONDENT. THE ORISSA STATE CO - OPERATIVE AGRICULTURAL & RURAL DEVELOPMENT BANK LTD., A/34, J.N.MARG, KHARVEL NAGAR, UNIT - III, BHUBANESWAR 3. THE CIT(A) - 1, BHUBANESWAR 4. PR.CIT - 1, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//