DENA BANK, MUMBAI V. CIT 2, MUMBAI

ITA 4326/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3824 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-03-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 27-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUPINDER BRAR
• Keywords: Rectification of order; Question of law; Bad and doubtful debts; Reassessment proceedings
• Section: 143(3); 115JB; 263; 154; 11

Judgement Text

, ,, , . .. . INCOME TAX APPELLATE TRIBUNAL, MUMBAI - BENCH D. ! ! ! ! ' ' ' ' #$ #$ #$ #$ , # ## # ! ! ! ! BEFORE S/SH.VIJAYPAL RAO,JUDICIAL MEMBER AND RAJE NDRA,ACCOUNTANT MEMBER ./ ITA/4325/M/11- % % % % & & & & ASSESSMENT YEAR 2003-04 . / ITA/4326/M/11- % % % % & & & & / ASSESSMENT YEAR 2004-05 . /ITA/1600/M/12- % % % % & & & & / ASSESSMENT YEAR 200 6 -0 7 DENA DENA BANK,DENA BANK BUILDING, FL 2 ND FLOOR.17/B HORNIMAN CIRCLE, FORT, MUMBAI.400023 PAN:AAACD4249 D ACIT2(3), ROOM NO. 521, 5 TH FLOOR, AAYKAR BHAVAN, M K ROAD, MUMBAI -400 020. ( '( '( '( '( / APPELLANT) ( )*'( )*'( )*'( )*'( / RESPONDENT) '( + # / APPELLANT BY : S.ANANTHAN )*'( , + # /RESPONDENT BY : MS.RUPINDER BRAR . % , - DATE OF HEARING :12.03.2013 ./& , - DATE OF PRONOUNCEMENT : 10.04.2013 #0 / O R D E R PER BENCH: CHALLENGING THE ORDERS DATED 28.03.2011;PASSED BY T HE COMMISSIONER OF INCOME TAX(CIT)-2, MUMBAI U/S.263 OF THE INCOME-TAX ACT,1961(ACT)FOR T HE ASSESSMENT YEARS(AYS.) 2003-04,2004 -05;ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL. GROUNDS OF APPEAL FOR THE AY.2003-04,AND 2004-05 ARE IDENTICAL EXCEPT FOR THE DIFFERENCE IN THE AMOUNT INVOLVED IN THE LAST GROUND OF APPEAL. ITA/4325/M/11-AY.2003-04 GROUNDS FOR AY.2003-04 READ AS UNDER: 1)THE ORDER OF THE LEARNED COMMISSIONER OF INCOME T AX IS AGAINST THE LAW AND FACTS OF THE CASE. 2)THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN R EVISING THE ORDER PASSED BY THE ASSESSING OFFICER U/S 250 OF THE INCOME TAX ACT 1961. 3)THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO APPRECIATE THE FACT THAT THERE WAS NO ERROR IN THE ORDER PASSED BY THE ASSESSING OFFICER U/S 250 OF TH E INCOME TAX ACT. 4)THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN H OLDING THAT THE ORIGINAL ASSESSMENT ORDER CEASED TO EXIST ONCE THE APPELLATE ORDER IS PASSED. 5)THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN H OLDING THAT THE NPA PROVISION HAS TO BE ADDED BACK WHILE COMPUTING THE BOOK PROFITS U/S 115JB OF THE A CT. 6)THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO APPRECIATE THE FACT THAT THE AMOUNT OF RS. 2,69,68, 00,000/- IS NOT A PROVISION BUT A WRITE OFF. FOR ALL THESE AND OTHER GROUNDS WHICH MAY BE URGED AT THE TIME OF THE HEARING OF THIS APPEAL, THE APPELLANT PRAYS THAT ITS APPEAL BE ALLOWED AND THE ORDER OF THE COMMISSIONER OF INCOME TAX BE SET ASID E. IN THE APPEAL FILED FOR THE NEXT AY WRITE OFF AMOUN T INVOLVED IN GROUND NO.6 IS RS.3,06,15,90, 902-/, OTHERWISE BOTH THE APPEALS HAVE SAME ISSUES. FIRST WE ARE TAKING UP APPEAL FOR THE AY. 2003-04. 2. APPELLANT,A NATIONALISED BANK,HAD FILED ITS RETURN OF INCOME ON 28.11.2003 DECLARING A TOTAL INCOME OF RS.NIL.TAX LIABILITY COMPUTED BY THE BANK UNDER MAT PROVISIONS WAS RS.7,44,45, 176/-.THE REGULAR ASSESSMENT U/S 143 (3) OF THE ACT WAS COMPLETED BY THE ASSESSING OFFICER(AO) ON 16.03.2005 MAKING VARIOUS DISALLOWANCES/ADDITION S.HE DETERMINED THE TOTAL INCOME OF THE AT RS.5,29,11,92,890/- UNDER THE NORMAL PROVISIONS OF THE ACT AND BOOK PROFITS AT RS.1,94,85,35, 496/-.THE BANK FILED AN APPEAL BEFORE THE FIRST APP ELLATE AUTHORITY(FAA) AGAINST THE ABOVE ORDER.FAA DECIDED THE APPEAL VIDE HIS ORDER DATED 2 8.04.2008 AND GAVE RELIEF TO THE BANK. ON RECEIPT OF THE APPELLATE ORDER, AO PASSED AN ORDER ON 17.11.2008 TO GIVE EFFECT TO THE APPELLATE ORDER OF THE FAA.AFTER GIVING EFFECT TO THE RELIEF ALLOWED BY FAA THE TOTAL INCOME OF THE ASSESSEE-BANK WAS UNDER NORMAL PROVISIONS WAS DETER MINED AT A LOSS OF RS. 31,16,95,059/-, HOWEVER THERE WAS NO CHANGE IN THE BOOK PROFITS COM PUTED U/S.115 JB OF THE ACT. 2.1. AS PER THE CIT ON GOING THROUGH THE ABOVE ORDER OF THE AO,HE FOUND THAT WHILE COMPUTING THE BOOK PROFITS U/S.115 JB OF THE ACT,AO HAD NOT C ONSIDERED THE PROVISION FOR NPA TO THE EXTENT OF RS.2,69,68,00,000/-.THROUGH HIS OFFICE NOTICE, D TD. 22.02.2011, HE PROPOSED TO SET ASIDE THE ORDER DTD.17.11.2008 OF THE AO,AND HE CALLED FOR TH E OBJECTIONS OF THE ASSESSEE.AFTER CONSIDERI- NG THE SUBMISSIONS OF THE ASSESSEE-BANK HE HELD THA T AO HAD FAILED TO INCLUDE AN AMOUNT OF RS. 2,69,65,00,000/-ON ACCOUNT OF PROVISIONS MADE FOR N PA U/S.36(VII)(A) OF THE ACT,WHILE COMPUT- ING THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT, THAT THE DEDUCTION OF BAD DEBTS ACTUALLY CLAIMED COULD NOT BE ALLOWED AGAINST THE ABOVE PROV ISION,THAT THE ORDER OF THE AO DATED 17.11. 2008 PASSED U/S.250 OF THE ACT WAS ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF REVENUE TO THAT EXTENT,THAT ONCE THE APPEAL AGAINST AN ORDER WAS PA SSED THE ORIGINAL ORDER CEASED TO EXIST,THAT IN SUCH CIRCUMSTANCES REVISED ORDER PREVAILED. HE SET ASIDE THE ORDER OF THE AO AND DIRECTED HIM TO BE PASS FRESH ORDER AFTER TAKING INTO ACCOUNT COMPL ETE FACTS AND CIRCUMSTANCES OF THE CASE AND APPLY THE CORRECT PROVISIONS OF THE ACT. HE ALSO RE LIED UPON THE JUDGMENTS DELIVERED BY THE HON BLE APEX COURT AND THE HONBLE DELHI HIGH COURT IN THE CASES OF K.L.SRIHARJ (HUF) (250 ITR 193)AND TONY ELECTRONICS (185 TAXMAN 121). 3. BEFORE US AR SUBMITTED THAT THAT THE REVISION MADE BY THE CIT WAS NO TENABLE BOTH ON MERITS AND ON TECHNICAL, GROUNDS, THAT THE ORDER OF THE AO WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO REVENUE,THAT WHILE GIVING EFFECT TO CIT(A)S ORDER NO DIFFERENT WAS STAND TAKEN BY THE AO FROM THE STAND TAKEN BY HIM IN THE ORIGINAL ASSESSMENT O RDER,THE TIME LIMIT FOR REVISIONING THE ORDER U/S. 143(3) PASSED ON 16.03.2005 HAD ELAPSED ON 31. 03.2007,THAT THE CITS POWER TO INVOKE THE REVISIONERY POWERS IN THE CASE UNDER CONSIDERATION WAS BARRED BY LIMITATION,THAT THE MISTAKE AS POINTED OUT IN THE NOTICE DATED 22.02.2011 OF THE C IT-2,MUMBAI DID NOT FLOW FROM THE ORDER DATED 17.11.2008 GIVING EFFECT TO FAAS ORDER,THAT SAME COULD NOT BE REVISIONED U/S.263 OF THE ACT. AR RELIED UPON THE CASES OF INFOSYS TECHNOLOG Y LTD.(18TAXMANN.68),VIJAYA BANK(ITA/563 /B/2011-AY2006-07-BANGLORE ITAT).DR SUPPORTED THE O RDER OF THE CIT. 4. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL AVAILABLE ON RECORD.THE BASIC ISSUE TO BE DECIDED BY US IS WHETHER THE ORDER PASS ED BY CIT-2,MUMBAI ON 28.03.2011WAS BARR- ED BY TIME-LIMIT AS ENVISAGED BY THE PROVISIONS OF SECTION 263 OF THE ACT ?AS PER THE AVAILABLE RECORD ORDER U/S.143(3)OF THE ACT WAS PASSED BY THE AO ON 16.03.2005.SECTION 263(2) OF THE ACT PRESCRIBES THE TIME LIMIT FOR PASSING REVISIONARY O RDER U/S.263 AS UNDER: NO ORDER SHALL BE MADE UNDER SUB-SECTION (1) AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANC IAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PA SSED. THEREFORE,THE CIT HAD JURISDICTION TO INVOKE HIS RE VISIONARY POWER TILL THE END OF THE FINANCIAL YEAR 2007.BUT,IN THE CASE UNDER CONSIDERATION HE HA D PASSED ORDER U/S.263 ON 28.03.2011.IN OUR OPINION ACTION OF THE CIT WAS BEYOND THE TIME LIMIT ALLOWED BY THE PROVISIONS OF ACT.ANY ACTION TAKEN BY A REVENUE AUTHORITY AGAINST THE LAW CANNOT BE CONFIRMED.ORDER PASSED BY THE CIT IN THE CASE UNDER CONSIDERATION FALLS IN THAT CATEGORY AND THEREFORE,SAME IS LIABLE TO BE QUASHED.IN OTHER WORDS ORDER PASSED BY THE CIT WAS WITHOUT JURISDICT ION. IN HIS ORDER CIT HAS HELD THAT THAT ONCE THE APPEAL AGAINST AN ORDER WAS PASSED THE ORIGINAL ORDER CEASED TO EXIST AND THUS TIME LIMIT FOR PASSING ORDER U/S.263 SHOULD BE CALCULATED FROM THE DATE OF THE ORDER BY WHICH AO GAVE EFFECT TO THE ORDER OF THE FAA I.E.17.11.2008.FOR THE SAID PR OPOSITION HE RELIED UPON THE CASES OF K.L. SRIHARJ (HUF) AND TONY ELECTRONICS (SUPRA). WE FIND THAT FACTS OF BOTH THE CASES RELIED UPON BY THE CIT ARE TOTALLY DISTINGUISHABLE FROM THE CASE U NDER CONSIDERATION.IN THE CASE OF K.L.SRIHARJ (HUF)(SUPRA) ISSUE BEFORE THE HONBLE KARNATAKA HIG H COURT (SINGLE BENCH,DOUBLE BENCH) AND THE APEX COURT WAS LEVY OF INTEREST U/S.139(8) AND 215 OF THE ACT IN THE REASSESSMENT PROCEED- INGS.IN OUR OPINION THE MATTER OF K.L.SHIRAJ(HUF) I S OF NO HELP IN DECIDING THE ISSUE OF TIME LIMIT UNDER SECTION 263 (2)OF THE ACT.IN THE CASE O F TONY ELECTRONICS(SUPRA) ISSUE DECIDED PERTAIN -ED TO THE TIME LIMIT AVAILABLE U/S.154(7)OF THE AC T.IN THAT CASE IT WAS HELD THAT ONCE AN ORDER IS PASSED ON APPEAL, ORDER OF THE ORIGINAL AUTHORITY C EASES TO EXIST AND THE ORDER OF THE APPELLATE AUTHORITY PREVAILS, IN WHICH THE ORDER OF THE ORIGI NAL AUTHORITY IS MERGED; FOR ALL INTENT AND PURPOSES, IT IS THE ORDER OF THE APPELLATE AUTHORIT Y THAT WOULD BE SEEN; LIMITATION FOR THE PURPOSE OF SECTION 154(7) HAS TO BE COUNTED FROM THE DATE O F APPELLATE ORDER AND NOT THE ORIGINAL ORDER OF ASSESSMENT.HONBLE DELHI HIGH COURT HAD NOT DISCUSS ED OR ADJUDICATED THE ISSUE OF TIME LIMIT PROVIDED U/S.263(2) OF THE ACT. IN OUR OPINION PROV ISIONS OF RECTIFICATION OF MISTAKES I.E. SECTION 154 CANNOT BE EQUATED WITH THE PROVISIONS OF TREATI NG AN ASSESSMENT ERRONEOUS AND PREJUDICIAL TO REVENUE-SEC.263 OF THE ACT.BOTH THE SECTION OPERATE IN DIFFERENT SITUATIONS/CIRCUMSTANCES/FIELDS AND HAVE BEEN INCORPORATED WITH SPECIFIC PURPOSES.D ECISIONS PRONOUNCED BY HIGHER JUDICIAL FORUMS HAVE TO BE APPLIED IN THE CONTEXT THEY ARE D ELIVERED.RELIANCE PLACED ON JUDGMENT BY THE CIT ARE NOT RELEVANT FOR THE QUESTION UNDER CONSIDE RATION DO NOT HELP THE ISSUE AT HAND.IN SHORT, CASES RELIED BY THE CIT DO NOT STRENGTHEN HIS CASE AT ALL. 4.1. ON THE OTHER HAND WE FIND THAT THE ISSUE OF TIME LI MIT AVAILABLE UNDER SECTION 263(2) OF THE ACT HAS BEEN DEALT BY THE HONBLE HIGH COURT OF KAR NATAKA IN THE CASE OF INFOSYS TECHNOLOGIES LTD. (SUPRA).IN THAT MATTER ISSUE BEFORE THE HONBL E COURT WAS TO DECIDE THE TIME LIMIT IN LIGHT OF THE PROVISIONS OF THE SECTION 263(2) OF THE ACT.FAC TS OF THE CASE WERE THAT THE AO HAD PASSED ASSESSMENT ORDER ON 27-2-1997.ASSESSE PREFERRED AN APPEAL BEFORE THE FAA.ON 31.3. 1999 AO PASSED AN ORDER TO GIVE APPEAL EFFECT TO THE ORDER OF THE FAA. CIT VIDE HIS ORDER DATED 20-2-2001 PASSED UNDER SECTION 263 OF THE ACT.IN THE APPELLAT E PROCEEDINGS TRIBUNAL HELD THAT THE ORDER OF THE CIT PASSED U/S.263 WAS BARRED BY TIME LIMIT.WHE N THE MATTER WAS ARGUED BEFORE THE HONBLE HIGH COURT IT WAS SUBMITTED ON BEHALF OF THE REVENU E THAT: (I)ASSESSMENT ORDER WAS SUBJECT MATTER OF APPEAL AN D SUCCEEDED TO SOME EXTENT, (II)WHILE GIVING EFFECT TO DIRECTIONS OF APPELLATE ASSISTANT COMMISSIONER,AO HAD PASSED AN ORDER AFRESH ON 31-3-1999, (III)THEREFORE, STARTING POINT FOR COMPUTATION OF P ERIOD OF LIMITATION OF TWO YEARS SHOULD BE TAKEN AS 31-3-1999. HONBLE HIGH COURT FRAMED THE QUESTION OF LAW AS UN DER: WHETHER, ON FACTS AND IN CIRCUMSTANCES OF CASE, OR DER OF COMMISSIONER WAS CLEARLY BARRED BY LIMITATION ? DELIVERING THE JUDGMENT HONBLE HIGH COURT HELD AS UNDER: AFTER EXAMINATION OF THE FACT AND LEGAL POSITION W E ARE QUITE SATISFIED THAT THE ORDER PASSED BY THE COMMISSIONER IN EXERCISE OF THE REVISIONAL JURISDIC TION ON 20.2.2001 IS CLEARLY OUT OF TIME INSOFAR AS IT RELATES TO ORDER DATED 27.2.1997 RELATING TO THE AS SESSMENT YEAR 1994-95. THEREFORE, THE TRIBUNAL WAS VERY CORRECT IN SETTING ASIDE THE ORDER OF THE COMM ISSIONER ON THIS GROUND. 4.2. WE FIND THAT THE FACTS OF THE CASE ARE SQUARELY APP LICABLE TO THE FACTS OF THE PRESENT CASE.THERE -FORE,RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA WE DECIDE THE APPEAL IN FAVOUR OF THE ASSESSEE-BANK.IN OUR OPINION ORDER PASSED BY AO ON 17.11. 2008 WAS NOT A FRESH ORDER OF ASSESSMENT AS SUCH BU T AN ORDER IMPLEMENTING THE DIRECTIONS OF THE FAA AND AN ORDER IMPLEMENTING THE DIRECTION OF THE FAA IS NOT OPEN TO REVISIONARY PROCEEDINGS U/S. 263 OF THE ACT. AS A RESULT APPEAL FILED BY THE ASSESSEE STANDS ALL OWED. ITA/4325/M/11-AY.2004-05 5. FOLLOWING GROUNDS OF APPEAL WERE FILED BY THE ASSES SEE FOR THE AY.2004-05 1)THE ORDER OF THE LEARNED COMMISSIONER OF INCOME T AX IS AGAINST THE LAW AND FACTS OF THE CASE. 2)THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN R EVISING THE ORDER PASSED BY THE ASSESSING OFFICER U/S 250 OF THE INCOME TAX ACT 1961. 3)THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO APPRECIATE THE FACT THAT THERE WAS NO ERROR IN THE ORDER PASSED BY THE ASSESSING OFFICER U/S 250 OF TH E INCOME TAX ACT. 4)THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN H OLDING THAT THE ORIGINAL ASSESSMENT ORDER CEASED TO EXIST ONCE THE APPELLATE ORDER IS PASSED. 5)THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN H OLDING THAT THE NPA PROVISION HAS TO BE ADDED BACK WHILE COMPUTING THE BOOK PROFITS U/S 115JB OF THE A CT. 6)THE LEARNED COMMISSIONER OF INCOME TAX FAILED TO APPRECIATE THE FACT THAT THE AMOUNT OF RS.3,06,15,9 0, 902/- IS NOT A PROVISION BUT A WRITE OFF. FOR ALL THESE AND OTHER GROUNDS WHICH MAY BE URGED AT THE TIME OF THE HEARING OF THIS APPEAL, THE APPELLANT PRAYS THAT ITS APPEAL BE ALLOWED AND THE ORDER OF THE COMMISSIONER OF INCOME TAX BE SET ASID E. 5.1. AS STATED EARLIER,ALL THE GROUNDS OF APPEAL IN THE YEAR UNDER CONSIDERATION ARE SIMILAR TO THE GROUNDS OF EARLIER YEAR-EXCEPT FOR THE AMOUNT INVOL VED UNDER THE HEAD PROVISION FOR WRITE OFF. WE HAVE DECIDED,IN PARAGRAPH 4-4.2OF OUR ORDER,FOR THEAY 2003-04,THAT REVISIONARY ACTION TAKEN BY THE CIT WAS BARRED BY TIME LIMIT PRESCRIBED BY T HE PROVISIONS OF SEC. 263 OF THE ACT. FOLLOWING THE ORDER FOR THE AY.2003-04,WE DECIDE T HE APPEAL IN FAVOUR OF THE ASSESSEE FOR THE AY 2004-05 ALSO. ITA/1600/M/12-AY.2006-07: 6. IN THE APPEAL FILED FOR THE AY 2006-07 FOLLOWING GR OUNDS OF APPEAL HAVE BEEN RAISED BY THE ASSESSEE: 1)A.THE LEARNED COMMISSIONER OF INCOME-TAX (CIT) E RRED IN PASSING AN ORDER U/S.263 AND DIRECTING THE ASSESSING OFFICER TO MODIFY THE ORDER U/S 154.YOUR APPELLANTS SUBMIT THAT THE ORDER OF THE CIT IS ILLE GAL, BAD IN LAW AND VOID AND THE SAME OUGHT TO BE QUASHE D. B.THE APPELLANTS SUBMIT THAT THE ORDER OF THE AO IS NOT ERRONEOUS AND IS NOT PREJUDICIAL TO THE INTERE ST OF THE REVENUE. YOUR APPELLANTS THEREFORE SUBMIT THAT THE ORDER OF THE CIT BE QUASHED. 2)WITHOUT PREJUDICE TO THE ABOVE, A)THE LEARNED COMMISSIONER OF INCOME TAX (CIT) ERRE D IN NOT APPRECIATING THE FACT THAT THE PROVISIONS OF SECTION 115JB ARE NOT APPLICABLE IN THE CASE OF YOU R APPELLANTS.YOUR APPELLANTS SUBMIT THAT THE PROVISIONS OF THE SAID SECTION DO NOT APPLY TO THEM AND DENY THEIR LIABILITY TO BE ASSESSED U/S.115JB. B)THE LEARNED COMMISSIONER OF INCOME TAX (CIT) ERRE D IN DIRECTING THE ASSESSING OFFICER TO MODIFY THE ORDER U/S 154 TO THE EXTENT OF ADDING BACK SUM OF R S.42,92,48,000/- ON ACCOUNT OF PROVISION FOR STANDA RD ASSETS TO THE BOOK PROFITS COMPUTED UNDER MAT PROVI SIONS. YOUR APPELLANTS SUBMIT THAT THE PROVISION FO R STANDARD ASSETS IS NOT A PROVISION MADE IN DIMINUTI ON IN THE VALUE OF ASSETS, AND THUS SHOULD NOT BE A DDED TO THE BOOK PROFITS COMPUTED UNDER MAT PROVISIONS. 3)YOUR APPELLANTS FURTHER RESERVE THE RIGHTS TO ADD , AMEND OR ALTER THE AFORESAID GROUNDS OF APPEAL AS THEY MAY THINK FIT BY THEMSELVES OR BY THEIR REPRES ENTATIVES. 6.1.FACTS OF THE CASE- ORIGINAL ASSESSMENT WAS FINALISED BY THE AO ON U/S. 143(3) OF THE ACT ON 15.12.2008 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.21.85 CRORES . ASSESSEE VIDE ITS APPLICATIONS FILED ON 03.03. 2009 AND 17.03.2009 U/S.154 OF THE ACT REQUESTED T HE AO TO RECTIFY THE MISTAKE APPARENT FROM THE RECORD.ONE OF THE GROUND IN THE RECTIFICATION W AS ABOUT CALCULATION OF BOOK PROFITS U/S.115JB OF THE ACT.ON 29/03.2010 AO PASSED ORDER U/S.154 AN D GRANTED RELIEF TO THE ASSESSEE.CIT VIDE HIS NOTICE DTD.24.05.2011;ISSUED AS PER THE PROVISI ONS OF THE SECTION 263 OF THE ACT;ASKED THE ASSESSEE-BANK WHY THE ORDER PASSED BY THE AO SHOULD NOT BE TREATED ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE.AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE-BANK CIT HELD THAT AO HAD COMMITTED AN ERROR IN ALLOWING THE DEDUCTION FO R PROVISIONS FOR STANDARD ASSETS AMOUNTING TO RS.42.92 CRORES,THAT THE RECTIFICATION ORDER OF THE AO HAD LED TO A LOWER VALUE OF THE BOOK PROFIT FOR THE YEAR.HE DIRECTED THE AO TO MODIFY TH E ORDER PASSED U/S.154 OF THE ACT TO THE EXTENT OF ALLOWING PROVISIONS FOR STANDARD ASSETS FOR COMP UTING BOOK PROFIT. 6.2. BEFORE US,AR SUBMITTED THAT ORDER PASSED BY THE CIT U/S.263 WAS BAD IN LAW AD SAME WAWS ISSUED BEYOND TIME LIMIT PRESCRIBED BY THE PROVISIO NS OF THE ACT,THAT PROVISIONS OF SECTION 115 JB OF THE ACT WERE NOT APPLICABLE IN THE CASE UNDER CONSIDERATION,THAT BEFORE THE FAA ISSUE OF MAT PROVISIONS WAS RAISED.HE RELIED UPON THE CASES OF UNION BANK OF INDIA(ITA/4702-4706/ 2010DTD.30.06.2011),INDIAN BANK(ITA/469/MDS/2010 DT D.03.08.2011 AND ICICI LOMBARD 2012- TIOL-690-ITAT MUM.DR SUPPORTED THE ORDER OF THE CIT . THAT . 6.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD.WE FIND THAT ISSUE OF APPLICABILITY OF MAT PROVISIONS IN TH E CASE OF THE ASSESSEE HAD ARISEN IN THE APPEALS FILED BY THE ASSESSEE FOR THE YEAR 2006-07 (ITA/233 7/M/2001-DTD.03.04.2013)WHILE DECIDING THE ISSUE WE HELD AS UNDER : 9.2. WE FIND THAT THE ISSUE OF APPLICABILITY OF SECTION 115JB HAS BEEN DISCUSSED BY THE B BENCH OF MUMBAI TRIBUNAL IN THE CASE OF UNION BANK OF INDIA (SUPRA) IN FAVOUR OF THE ASSESSEE.IN THAT MATTER TRIBUNAL HAS HELD AS UNDER: 18. GROUND NO. 5 (IN ITA NO. 4706/M/10 -A.Y.2006-0 7) RELATES TO APPLICABILITY OF THE PROVISIONS OF SEC.115JB 19.THIS ISSUE IS COVERED BY THE DECISION OF THE JUR ISDICTIONAL HIGH COURT IN THE CASE OF KURUNG THAI BANK PCL)(ITA NO. 3390/M/90 DT. 30.9.2010.THE LD.CIT(A)HOWEVER FOLLOWED THE DECISION OF THE ITAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 IN ITA NO. 9061 / M/0420.THE LD. AR OF THE ASSESSEE HAS SUBMITTED AS FOLLOWS: THE APPELLANT FURTHER SUBMITS THAT THE APPELLANT I S NOT A COMPANY UNDER COMPANIES ACT BUT IS ONLY DEEMED TO BE A COMPANY AS PER THE PROVI SIONS OF SEC. 11 OF THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKING) ACT,1970.THEREFORE AS HELD BY THE JURISDICTIONAL ITAT IN THE CASE OF MAHARASHTRA STAT E ELECTRICITY BOARD (82 LTD 422) THE PROVISIONS OF SEC. 11 5JB CANNOT BE MADE APPLICABLE TO THE APPELLANT. RELIANCE IS ALSO PLACED ON THE DECISION OF KERALA HIGH COURT IN THE CASE OF KERALA STATE ELECTRICITY BOARD (329 ITR 91). 21. WE FIND THAT IN THE CASE OF KURUNG THAI BANK PC L) IN ITA NO. 3390/M/90 FOR A.Y. 2004-05 IT HAS BEEN HELD AS FOLLOWS: IN VIEW OF THE ABOVE DISCUSSIONS, AND FOLLOWING TH E VIEW TAKEN BY A CO ORDINATE BENCH IN THE CASE OF MAHARASHTRA STATE ELECTRICITY BOARD VS JCIT (82ITD422),WHICH HOLDS THAT PROVISIONS OF MAT CANNOT BE APPLIED TO ELECTRICITY COMPANIES FOR MUTUALLY SIMILAR REASON WE UPHOLD THE PLEA OF THE ASSESSEE.THE PRO V ISIONS OF SEC. 115JB DO NOT APPLY TO THE ASSESSEE AND, AS SUCH, THE AO WAS IN ERROR IN C ONCLUDING THAT INCOME HAD ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE THE VENJ IN ITIATION OF REASSESSMENT PROCEEDINGS WAS BAD IN LAW, AND WE QUASH THE SAME. 22.THE DECISION OF THE LD. CIT(A) IS REVERSED AND W E HOLD THAT PROVISIONS OF SEC.115JB CANNOT BE MADE APPLICABLE TO THE ASSESSEE.THIS GROUND OF T HE ASSESSEE IS DISMISSED. 9.3. WE HAVE PERUSED THE OTHER ORDERS CITED BY THE AR OF THE ASSESSEE-BANK.WE FIND THAT ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE.THEREFORE, RESPECTFULLY FOLL OWING THE ORDERS OF THE COORDINATING BENCHES OF THE ITAT,WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. AS THE ISSUE HAS ALREADY ADJUDICATED IN FAVOUR OF T HE ASSESSEE BY OUR EARLIER ORDER (SUPRA),THERE- FORE FOLLOWING THE SAME,WE HOLD THAT PROVISIONS OF SECTION 115JB ARE NOT APPLICABLE TO THE ASSESSEE-BANK.IN THESE CIRCUMSTANCES PROVIDING RELI EF TO THE ASSESSEE IN THE ORDER PASSED U/S.154 OF THE ACT BY THE AO BECOMES ACADEMIC.IN OTHER WORD S IF THE ASSESSEE IS NOT COVERED BY MAT PROVISIONS WHEN THE ORIGINAL ORDER WAS PASSED THEN ORDER OF THE AO GRANTING RELIEF UNDER THE SAME PROVISIONS WHILE PASSING RECTIFICATION ORDERS DOES NOT ALTER THE LEGAL POSITION.IN THESE CIRCUMSTANCES ORDER PASSED BY THE CIT U/S.263 OF TH E ACT IS NOT IN CONFORMITY OF LAW.SECONDLY,AS SUBMITTED BY THE ASSESSEE,ORDER PASSED BY THE CIT I S BARRED BY TIME LIMIT PRESCRIBED BY THE PROVISIONS OF SECTION 263 OF THE ACT.THEREFORE,AS H ELD IN EARLIER YEARS,ACTION OF THE CIT CANNOT BE ENDORSED. APPEAL FILED BY THE ASSESSEE FOR THE AY. UNDER CONS IDERATION IS ALLOWED. APPEALS OF THE ASSESSEE-BANK FOR THE AYS. 2003-04,2 004-05 AND 2006-07 STAND ALLOWED. % 1- 2 3 , 4 % & 2003-04,2004-05 -' 2006-07 , 5 6 , - 78 ORDER PRONOUNCED IN THE OPEN C OURT 10 TH APRIL, 2013 #0 , ./& # 5 9 % 10 )<,2013 / , 4 ? SD/- SD/- ( / VIJAYPAL RAO ) ( #$ / RAJENDRA) ! ! ! ! JUDICIAL MEMBER # ! /ACCOUNTANT MEMBER / MUMBAI, 9 %/ DATE: 10 TH APRIL, 2013 TNMM #0 #0 #0 #0 , ,, , )- )- )- )- A#&- A#&- A#&- A#&-/ COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / '( 2. RESPONDENT/ )*'( 3. THE CONCERNED CIT (A)/ BC D . 4. THE CONCERNED CIT/ BC D 5. DR D BENCH, ITAT,/MUMBAI E4 )-% . . . . 6. GUARD FILE/ 4 F *- )- //TRUE COPY// #0% #0% #0% #0% / BY ORDER, G GG G/ // /7 7 7 7 DY./ASST. REGISTRAR , , , , / ITAT, MUMBAI