The Quilon Co-op Urban Bank Ltd, Kollam V. The ACIT, Trivandrum

ITA 470/COCH/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7535 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 04-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2015
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Assessee Lawyers: V SATHYANARAYANAN
• Keywords: Opportunity of being heard; Revised return
• Section: 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NO.470/COCH/2015 ASSESSMENT YEAR : 2009-10 THE QUILON CO-OPERATIVE URBAN BANK LTD., YMCA ROAD, KOLLAM. [PAN:AAAAT 1144K] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOLLAM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI V.SATHYANARAYANAN, CA REVENUE BY SHRI K.P. GOPAKUMAR, SR. DR DATE OF HEARING 04/02/2016 DATE OF PRONOUNCEMENT 08/02/2016 O R D E R PER B.P.JAIN, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE ARISES FROM THE O RDER OF THE LD. CIT(A), KOWDIAR, TRIVANDRUM DATED 13-07-2015 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER THE LEARNED COMMISSIONER OF INCOME-TAX(A PPEALS) IS RIGHT IN LAW IN RECKONING THE POPULATION OF RURAL AREA WITH REFE RENCE TO VILLAGE FOR THE PURPOSE OF COMPUTING THE DEDUCTION U/S. 36(1)(VIIA) OF THE INCOME TAX ACT? THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERR ED IN NOT ALLOWING THE DEDUCTION U/S. 36(1)(VIIA) OF THE INCOME TAX ACT CO MPUTED WITH REFERENCE TO THE AVERAGE ADVANCES MADE BY THE RURAL BRANCHES OF THE APPELLANT BANK. I.T.A. NO.470/COCH/2015 2 THE DECISION OF THE HON. HIGH COURT OF KERALA IN TH E CASE OF KANNUR DISTRICT CO-OP. BANK LTD. IS PENDING BEFORE THE HONBLE SUPR EME COURT OF INDIA. 2. WHETHER THE CIT(A) IS CORRECT IN NOT EXCLUDING T HE AMOUNT OF RS.27,05,961/- WHICH HAS BEEN BROUGHT TO TAX IN ASS ESSMENT YEAR 2008-09. THE ASSESSING OFFICER AND CIT(A) ERRED IN BRINGING TO TAX THE AMOUNT OF RS.2705961/- IN ASSESSMENT YEAR 2008-09 & ASSESSMEN T YEAR 2009-10. 3. WHETHER THE CIT(A) IS CORRECT IN LAW IN NOT CON SIDERING THE CLAIM FOR ALLOWING DEDUCTION U/S. 36(1)(VIIA) OF THE IT ACT O N MERITS. THE CIT(A) ERRED IN RELYING ON THE DECISION OF THE SUPREME COURT IN GOETZE (INDIA) LTD., WHICH IS APPLICABLE ONLY TO THE ASSES SING OFFICER AND NOT THE CIT(A). THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERE D THE CLAIM OF STATUTORY DEDUCTION U/S. 36(1)(VIIA) OF THE IT ACT ON MERITS. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE FURTHER ADDUCED AT THE TIME OF HEARING THE ORDER OF THE LEARNED COMMISSIONER OF IN COME-TAX(APPEALS) REQUIRES TO BE MODIFIED. 3. AS REGARDS GROUND NO. 1, THE BRIEF FACTS OF TH E CASE AS EMANATING FROM THE ORDER OF THE LD. CIT(A) AT PGS. 2 & 3 ARE REPRODUCE D HEREINBELOW: IN THE ASSESSMENT ORDER PASSED, THE ASSESSING OFFIC ER HAS NOT ALLOWED 10% OF THE AGGREGATE AVERAGE ADVANCE MADE BY THE BR ANCHES AT MULANKADAKAM, MUNDAKKAL AND VADDY ON THE GROUND THA T THE DEDUCTION IS ALLOWABLE ONLY TO RURAL BRANCHES HAVIN G LESS THAN 10,000 POPULATION BUT IN THE INSTANT CASE OF THE ASSESSEE THE SAID BRANCHES ARE COMING UNDER CORPORATION LIMIT HAVING MORE THAN 10,000 POPULATION THEREBY FAILED TO FULFIL THE CONDITION C ONTEMPLATED UNDER EXPLANATION (IA) TO SECTION 36(1)(VIIA) OF THE ACT. THOUGH THE APPELLANT HAS DISPUTED THIS DISALLOWANCE IN THE GROUNDS OF AP PEAL, DURING THE COURSE OF HEARING BEFORE THE UNDERSIGNED VIDE LETTE R DATED 10.10.2014 HAS NOT PURSUED THIS ISSUE AS UNDER: THE RURAL BRANCHES OF THE BANK ARE SITUATED IN A P LACE WHERE THE POPULATION EXCEEDS TEN THOUSAND AS PER THE LATEST C ENSUS REPORTS. HENCE THE DEDUCTION U/S. 36(1)(VIIA) TO THE EXTENT OF 10% OF THE AGGREGATE AVERAGE ADVANCES DOES NOT APPLY. TAKING INTO CONSIDERATION THE DECISION OF THE HONBLE HIGH COUR T OF KERALA IN THE I.T.A. NO.470/COCH/2015 3 CASE OF KANNUR DISTRICT CO-OPERATIVE BANK, WE ARE N OT PURSUING THIS ISSUE. CONSIDERING THE FACT THAT THE APPELLANT HAS NOT FUL FILLED THE CONDITION TO BE A RURAL BRANCH CONTEMPLATED UNDER EXPLANATION (IA ) TO SECTION 36(1)(VIIA) OF THE ACT AND THE DECISION OF THE HON BLE KERALA HIGH COURT IN THE CASE OF KANNUR DISTRICT CO-OPERATIVE BANK WH ICH IS AGAINST THE APPELLANT AS MENTIONED IN THE LETTER THE APPELLANT HAS FILED, APPEAL ON THIS GROUND IS DISMISSED. 4 . THE LD. COUNSEL FOR THE ASSESSEE CONCEDED THAT GROU ND NO. 1 IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KANNUR DISTRICT CO-OPERATIVE BANK LTD. & OTHERS VS. CIT AND ANOTHER IN I.T.A. NO.179 OF 2012. 5. THE LD. DR ON THE OTHER HAND SUPPORTED THE OR DERS OF BOTH THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS REGARDS GROUND NO. 1 WITH REGARD TO THE CLAIM OF DE DUCTION U/S. 36(1)(VIIA), IT IS A FACT ON RECORD THAT THE ASSESSEE HAS NOT FULFILLE D THE CONDITION TO BE A RURAL BRANCH CONTEMPLATED UNDER EXPLANATION (IA) TO SECTIO N 36(1)(VIIA) OF THE ACT AND THE DECISION OF THE HONBLE KERALA HIGH COURT IN TH E CASE OF KANNUR DISTRICT CO- OPERATIVE BANK LTD. & OTHERS VS. CIT AND ANOTHER (S UPRA) IS AGAINST THE ASSESSEE ON THE ISSUE AND ACCORDINGLY, IN THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE, AND AS CONCEDED BY THE LD. AR, GROUND NO. 1 OF THE ASSESSEE IS DISMISSED. I.T.A. NO.470/COCH/2015 4 7. AS REGARDS GROUND NO. 2, THE BRIEF FACTS OF T HE CASE ARISING FROM THE ORDER OF THE LD. CIT(A) ARE REPRODUCED HEREINBELOW. THE CASE OF THE APPELLANT IS THAT THE ASSESSING OF FICER HAD DISALLOWED INTEREST ACCRUED ON INVESTMENTS UPTO 31.03.2008 AMO UNTING TO RS.27,05,961/- WHILE COMPLETING THE ASSESSMENT FOR THE AY 2008-09. IN THE RETURN FILED FOR THE AY 2008-09 THE APPELLANT H AD CLAIMED DEDUCTION IN RESPECT OF INTEREST ACCRUED ON INVESTMENT UPTO THE YEAR ENDED 31.03.2008 AMOUNTING TO RS.27,05,961. SUCH AMOUNT CLAIMED IN T HE AY 2008-09 WAS OFFERED FOR TAX IN THE AY 2009-10 IN THE RETURN OF INCOME FILED BY THE APPELLANT. WHILE COMPLETING THE ASSESSMENT FOR THE AY 2008-09, THE ASSESSING OFFICER HAD NOT ALLOWED THE CLAIM OF DEDU CTION AND HENCE SUCH INCOME IS NOT TAXABLE IN AY 2009-10. WHILE COMPLETI NG THE ASSESSMENT, THE ASSESSING OFFICER HAS ADOPTED THE INCOME RETURN ED BY THE APPELLANT WHICH INCLUDES THE DISALLOWANCE OF R.27,05,961 MADE BY THE APPELLANT IN THE RETURN FOR THE REASON THAT THE SAID AMOUNT WAS CLAIMED IN AY 2008- 09. THE ACTION OF THE ASSESSING OFFICER HAS RESULTE D IN DOUBLE ADDITION, ONE IN THE AY 2008-09 AND ANOTHER IN THE AY 2009-10 . THIS IS FACTUALLY NOT CORRECT AS NO SUCH INCOME WAS OFFERED FOR TAX FOR THE AY 2009-10. THIS COULD BE CONFIRMED WITH THE STATE MENT OF TOTAL INCOME THE APPELLANT HAS FILED IN THE AY 2009-10. THE ASSE SSING OFFICER HAS NOT DISALLOWED THE SAID AMOUNT OF RS.27,05,961/- IN THE ASSESSMENT ORDER PASSED FOR THE AY 2009-10. THE ONLY DISALLOWANCE HE MADE WAS U/S. 36(1)(VIIA). EVEN OTHERWISE, THE DISALLOWANCE MADE FOR THE AY 2008-09 CAN CONSIDERED FOR DELETION AS DECIDED BY THE HONB LE ITAT, COCHIN BENCH, COCHIN IN THE APPELLANTS OWN CASE FOR THE AY 2007- 08, ONLY IN THE A.Y. 2008-09 BUT NOT IN THE AY 2009-10. IN VIEW OF THE ABOVE, APPEAL ON THIS GROUND IS DISMISSED. 8. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT T HE ACTION OF THE ASSESSING OFFICER HAS RESULTED IN DOUBLE ADDITION AND WHICH A CTION HAS BEEN CONFIRMED BY THE LD. CIT(A). ACCORDINGLY, HE PRAYED TO SET ASID E THE MATTER TO THE FILE OF THE LD. CIT(A) AND DECIDE THE ISSUE AFRESH SO THAT THER E IS NO DOUBLE ADDITION ON THE ISSUE. I.T.A. NO.470/COCH/2015 5 9. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORDE RS OF BOTH THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE AT PB PG. 5 WHICH IS THE COMPUTATION OF INCOME FOR THE ASSESSMENT YEAR 2008- 09, THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.27,05,961/- WHICH THE ASSES SING OFFICER DID NOT ALLOW IN THE ASSESSMENT MADE FOR THE ASSESSMENT YEAR 2008-09 AND THE ORDER OF THE ASSESSING OFFICER IS AVAILABLE AT PB PGS. 9 AND 10 WHEREIN THE ASSESSING OFFICER HAS DISALLOWED THE SAID SUM OF RS.27,05,961/-. THE LD. AR POINTED OUT THE COMPUTATION OF INCOME OF THE ASSESSEE FOR THE ASSES SMENT YEAR 2009-10 AT PB PG. 11 WHEREIN THE ASSESSEE HAD MADE THE CLAIM OF R S.27,05,961/- WHICH HAS NOW BEEN DISALLOWED BY THE LD. CIT(A) BY CONFIRMING THE ACTION OF THE ASSESSING OFFICER. IT IS SETTLED LAW THAT THERE CANNOT BE A DOUBLE ADDITION AS IN THE PRESENT CASE, FIRSTLY IN THE IMPUGNED YEAR AND SECONDLY IN THE ASSESSMENT YEAR 2009-10 PB PGS. 15&16. ACCORDINGLY, THE MATTER IS SET ASI DE TO THE FILE OF THE LD. CIT(A) WHO WILL DECIDE THE ISSUE IN VIEW OF OUR FINDINGS H EREINABOVE AND AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THUS GROUND NO. 2 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. AS REGARDS GROUND NO. 3, THE BRIEF FACTS OF TH E CASE AS EMANATING FROM THE ORDER OF THE LD. CIT(A) ARE REPRODUCED HEREINBELOW : I.T.A. NO.470/COCH/2015 6 THE FOURTH GROUND OF THE APPEAL IS THAT THE APPELL ANT BEING A CO- OPERATIVE BANK IS ENTITLED TO DEDUCTION U/S. 36(1)( VIII) OF THE ACT AND THEREBY THE ASSESSING OFFICER MAY BE DIRECTED TO CO MPUTE THE DEDUCTION IN ACCORDANCE WITH LAW. THIS GROUND OF AP PEAL CANNOT BE CONSIDERED SINCE THE ASSESSING OFFICER HAS NOT REJE CTED ANY SUCH CLAIM THE APPELLANT HAS MADE DURING THE COURSE OF E ITHER FILING THE RETURN OR DURING THE ASSESSMENT PROCEEDINGS. THIS A PART, UNDER THE PROVISION OF SECTION 139(5) OF THE ACT, THE APPELLA NT COULD HAVE FILED REVISED RETURN MAKING SUCH CLAIM, WHICH WAS NOT DO NE BY. AT LEAST COULD HAVE RAISED THIS ISSUE BEFORE THE ASSESSING O FFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THIS WAS ALSO NO T DONE. AS THE ACT PROVIDES FOR APPEAL ONLY AGAINST THE ORDER PASS ED BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER IN THE INSTANT CASE HAS NOT AT ALL ADJUDICATED THE CAPTIONED ISSUE, I AM OF THE CONSIDERED OPINION THAT NO APPEAL COULD BE FILED AGAINST THIS ISSUE AND THEREFORE DESERVED TO BE REJECTED. FURTHER, THE APPELLANT HA S NO CASE EVEN UNDER RULE 46A OF THE IT RULES AS THE APPELLANT HAS NEVER BEEN PROHIBITED TO RAISE THIS ISSUE BEFORE THE ASSESSING OFFICER. WITHOUT FILING REVISED RETURN AND WITHOUT RAISING THIS ISSU E BEFORE THE ASSESSING OFFICER, THE APPELLANT CANNOT RAISE THIS ISSUE AT THIS STAGE. RELIANCE IS PLACED HERE TO THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT REPORTED IN 157 TAXMAN 1 WHEREIN IT WAS HELD THAT A CLAIM FOR DEDUCTION NOT MADE IN THE ORIGINAL RETURN CANNOT BE CONSIDERED OTHER THAN THR OUGH A VALID REVISED RETURN. APPEAL ON THIS GROUND IS THEREFORE , DISMISSED. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE BEFORE US TO BE DECIDED IS THA T THE ASSESSEE HAD NOT MADE ANY CLAIM BEFORE THE ASSESSING OFFICER BUT THE CLAI M WAS MADE BEFORE THE LD. CIT(A). THE LD. CIT(A) REJECTED THE SAME SINCE THE CLAIM WAS NOT MADE BEFORE THE ASSESSING OFFICER IN VIEW OF THE DECISION OF TH E HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA LTD. VS. CIT 284 ITR 323. IN OUR VIEW, THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA L TD. (SUPRA) CANNOT BE MADE APPLICABLE IN THE PRESENT CASE SINCE IN THE CASE OF GOETZE INDIA LTD. (SUPRA), THE I.T.A. NO.470/COCH/2015 7 ASSESSEE HAD CLAIMED THE DEDUCTION BY WAY OF LETTER ADDRESSED TO THE ASSESSING OFFICER AFTER FILING THE RETURN OF INCOME. IT WAS HELD BY THE HONBLE SUPREME COURT THAT THE CLAIM OTHERWISE THAN BY FILING THE REVISED RETURN WAS RESTRICTED TO THE POWER OF THE ASSESSING OFFICER TO ENTERTAIN SUC H CLAIM WHICH ACCORDING TO US MEANS THAT THE ASSESSING AUTHORITIES ARE NOT EMPOWE RED TO ENTERTAIN SUCH CLAIM MADE OTHERWISE THAN BY WAY OF REVISED RETURN. THO UGH THE HONBLE SUPREME COURT HAS SPECIFICALLY MENTIONED THAT IT DOES NOT I MPINGE ON THE POWER OF THE APPELLATE TRIBUNAL U/S. 254 OF THE ACT AND IT IS OP EN TO THE ASSESSEE TO RAISE SUCH POINTS BEFORE THE TRIBUNAL . IN OUR VIEW, THE HONBLE SUPREME COURT HAS RESTRIC TED THE POWER OF THE ASSESSING OFFICER TO ENTERTAIN SUC H CLAIM MADE OTHERWISE THAN BY WAY OF REVISED RETURN BUT NOT THAT OF THE APPELL ATE TRIBUNAL, THE APPELLATE AUTHORITY WHICH INCLUDES THE COMMISSIONER OF INCOME -TAX(APPEALS) AS WELL. ACCORDINGLY, THE LD. CIT(A) HAS THE POWER TO ENTERT AIN SUCH CLAIM ONCE THEY ARE MADE BEFORE HIM. ACCORDINGLY, WE SET ASIDE THIS ISS UE TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO ENTERTAIN THE CLAIM AND DECIDE THE ISSUE DE NOVO AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. THUS GROUND NO. 3 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOS ES. 13. GROUND NO. 4 IS GENERAL IN NATURE AND THEREFO RE, DO NOT REQUIRE ANY ADJUDICATION. I.T.A. NO.470/COCH/2015 8 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I.T.A. NO.470/COCH/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 08-02-2016. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 08TH FEBRUARY, 2016 GJ COPY TO: 1. THE QUILON CO-OPERATIVE URBAN BANK LTD., YMCA R OAD, KOLLAM. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1, KOLLAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS), TRIVAND RUM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T.,COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COC HIN I.T.A. NO.470/COCH/2015 9