THE KUPPAM CO-OPERATIVE TOWN BANK LIMITED, Andhra pradesh V. ACIT, Circle-1(1), Tirupathi

ITA 63/Hyd/2023

AI Insights

The case involves the Kuppam Cooperative Town Bank Ltd, which appealed against the order of the CIT (A)-NFAC Delhi concerning the Assessment Year 2016-17. The primary issue was the addition of Rs. 84,79,336 to the bank's income, which was imposed by the Assessing Officer for failing to deduct tax at source on interest payments made to depositors. The bank's return was initially processed under Section 143(1), but was later selected for scrutiny under CASS, leading to the issuance of statutory notices and a detailed assessment under Section 143(3). The CIT (A) confirmed the addition, which was subsequently upheld by the Tribunal due to the bank's failure to provide adequate justification for the non-deduction of tax at source.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128978 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 10-04-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 22-01-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax
• Section: 143(3); 142(1); 40(a)(ia); 143(1); 143(2)

Judgement Text

ITA No 63 of 2023 Kuppam Cooperative Town Bank Ltd Kuppam Page 1 of 7 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B‘ Bench, Hyderabad Before Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member ITA No.63/Hyd/2023 Assessment Year: 2016-17 The Kuppam Cooperative Town Bank Ltd, Kuppam PAN:AABAT7171M Vs. Asstt. C. I. T. Circle 1(1) Tirupati (Appellant) (Respondent) Assessee by : N O N E Revenue by: Shri Kumar Aditya, DR Date of hearing: 11/04/2023 Date of pronouncement: 13/04/2023 ORDER Per R.K. Panda, A.M This appeal filed by the assessee is directed against the order dated 18.11.2022 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2016-17. 2. None appeared on behalf of the assessee at the time of hearing. No application seeking adjournment of the case has been filed. It was seen from the order sheet entries that even in the past also no one was appearing. Under the circumstances, we deem it proper to decide the issue on the basis of the material available on record and after hearing the learned DR. 3. Facts of the case, in brief, are that the assessee is an AOP and filed its return of income for the impugned A.Y on ITA No 63 of 2023 Kuppam Cooperative Town Bank Ltd Kuppam Page 2 of 7 31.12.2016 declaring income of Rs.80,58,590/-. The return was processed u/s 143(1) dated15.03.2017. Subsequently, the case was selected for complete scrutiny under CASS and statutory notices u/s 143(2) and 142(1) were issued to the assessee calling for certain details such as (a) list of persons to whom interest was paid during the relevant financial year along with the reasons for non-deduction of tax at source, (b) copy of ledger a/c in respect of contingencies, (c) contingencies, establishment charges and honorarium debited to P&L A/c, (d) details of appraiser fee, copies of invoices for fixed assets, (e) details of amount disallowed u/s 40(a)(ia). The assessee filed part details. After considering the scanty details filed by the assessee, the Assessing Officer completed the assessment u/s 143(3) on 22.12.2018 determining the total income of the assessee at Rs.1,65,37,926/-wherein he made addition of Rs.84,79,336/- by recording the following: “3.7 In view of the failure on the part of the assessee, to prove that tax at source has been deducted for the interest amount paid to various depositors during the year, aggregating to Rs.2,82,64,453/- as per the table below, and in view of section 40(a)(ia) of the I.T. Act, 1961, an amount of Rs.84,79,336/- being 30% of Rs.2,82,64,453/- is disallowed and brought to tax as income of the assessee for the A.Y 2016-17: S. No Amount (in Rs.) 1 Total interest paid during the year Rs.2,86,05,877 2 Less: interest amount already disallowed by the assessee in the statement of income as per provisions of section 40(a)(ia) Rs.3,39,489 3 Less: Security deposit interest as claimed by the assessee in its submission Rs.1,935/- Interest amount to be brought under the purview of section 40(a)(ia) for disallowance @ 30% Rs.2,82,64,453/- 30% of above Rs.84,79,336/- Addition: Rs.84,79,336/-“ 4. In appeal, the learned CIT (A) confirmed the addition made by the Assessing Officer by observing as under: “5. Decision on Ground of Appeal No.1: