CITIZEN CREDIT CO OPERATIVE BANK LTD, MUMBAI V. ADDL CIT RG 1(2), MUMBAI

ITA 6412/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2704 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 20-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR DARSI SUMAN RATNAMDR
• Assessee Lawyers: VIJAY KOTHARIAR
• Keywords: Revision of order; Depreciation; Rectification of order; Revised return

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL C BENC H MUMBAI , , BEFORE S/SHJOGINDER SINGH,JUDICIAL MEMB ER & RAJENDRA,ACCOUNTANT MEMBER ./I.T.A./6412/MUM/2014, /ASSESSMENT YEAR: 2011-12 CITIZEN CREDIT CO-OPERATIVE BANK LIMITED HELENA APARTMENTS, 57 MOUNT CARMEL ROAD, BANDRA (W),MUMBAI-400 050. PAN:AAAAC 0016 F VS. DCIT-RANGE-1(2) MUMBAI. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: DR. DARSI SUMAN RATNAM-DR ASSESSEE BY: SHRI VIJAY KOTHARI-AR / DATE OF HEARING: 30.05.2016 / DATE OF PRONOUNCEMENT: 15.07.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER,DTD.12.06.2014,OF THE CIT(A)- 2,MUMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL.THE EFFECTIVE GROUND OF APPEAL IS AB OUT DENIAL OF DEDUCTION OF RS.1.42 CRORES,U/S.36(1) (VIII)OF THE ACT. BRIEF FACTS : 2. ASSESSEE-BANK FILED ITS RETURN OF INCOME ON 28.09.2 011,DECLARING INCOME OF RS.24.91 CRORES.AS PER THE ACKNOWLEDGEMENT GENERATED,ON RETU RN ELECTRONICALLY TRANSMITTED,THE INCOME WAS SAME.CENTRAL PROCESSING CENTER(CPC)VIDE ITS INTIMATION ISSUE U/S.143(1)OF THE ACT,DETERMINED THE INCOME OF THE ASSESSEE AT RS.27 .12 CRORES.THUS,THERE WAS DIFFERENCE OF RS.2.20 CRORES BETWEEN THE INCOME RETURNED BY THE A SSESSEE AND THE INTIMATION ISSUED BY THE CPC.IT APPLIED FOR RECTIFICATION,VIDE ITS LETTER DA TED 08.02.2013.CPC VIDE LETTER DATED 22.03. 2013,INTIMATED THE ASSESSEE AS UNDER: SUBSEQUENT ASSESSMENT/PROCEEDINGS HAVE BEEN INITIA TED BY YOUR ASSESSING OFFICER AND HENCE YOUR APPLICATION FOR RECTIFICATION CANNOT BE TAKEN UP AT CPC. DURING THE SCRUTINY ASSESSMENT PROCEEDINGS,BEFORE T HE AO,THE ASSESSEE EXPLAINED THAT THE DIFFERENCE OF RS.2.20 CRORES WAS ARISING ON ACCOUNT OF DEDUCTION U/S.36(1)(VIII) OF THE ACT (RS.1.42 CRORES)AND DOUBLE DISALLOWANCE OF INVESTME NT DEPRECIATION ALLOWANCE(RS.78.93 LAKHS).THE AO WHILE COMPLETING THE ASSESSMENT DID N OT ACCEPT BOTH THE CLAIMS FOR THE REASON THAT SUPPORTING DOCUMENTS WERE NOT FILED BY THE ASS ESSEE . 6412/M/14-CITIZEN CREDIT 2 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM,THE ASSESSEE R EITERATED THE FACTS WHICH HAD BEEN NARRATED BY US IN THE EARLIER PARAS.IT WAS CONTENDE D THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S. 36(1)(VIII) OF THE ACT, AND THE SAME OUGHT TO BE ALLOWED. AFTER CONSIDERING THE AVAILABLE MATERIAL,THE FAA HE LD THAT THE CPC HAD PROCESSED THE RETURN ON THE BASIS OF DATA FURNISHED,THAT THE ASSESSEE H AD SHOWN THE PROFIT BEFORE TAX AS PER THE P&L AT RS.26.92 CRORES,THAT CPC, BANGALORE PROCESSE D THE RETURN ON THAT BASIS, THAT ASSESSEE THEREAFTER HAD SOUGHT A RECTIFICATION IN THE FIGURE AND HAD REQUESTED TO TAKE THE FIGURE AT RS. 24,91,05,826/- AS AGAINST THE FIGURE OF RS.26.92 CR ORES, SHOWN IN THE ORIGINAL RETURN, THAT SUCH A CHANGE IN DATA WAS NOT ACCEPTED BECAUSE IT DID NO T MATCH WITH THE OTHER RELEVANT DATA ALREADY FILED FOR THE PURPOSE OF ARRIVING AT THE NE T PROFIT FROM THE BUSINESS/PROFESSION, THAT A PERUSAL OF THE COLUMNS OF THE E-RETURN REVEALED THA T THERE WAS NO SPECIFIC CLAIM MADE U/S. 36(1)(VIII), THAT NO DEDUCTION WAS CLAIMED IN THE R ELEVANT COLUMNS FOR AN AMOUNT OF RS.1.42 CRORES TO MATCH THE CLAIM OF DEDUCTION U/S. 36(1), THAT THE ASSESSEE HAD NOT MADE THE CLAIM FOR DEDUCTION WHILE FILING THE ORIGINAL RETURN, THA T THE ONLY OPTION AVAILABLE TO IT WAS TO FILE A REVISED RETURN OF INCOME, THAT THE ASSESSEE HAD FA ILED TO FURNISH A REVISED RETURN WITHIN THE DUE DATE, THAT IN ABSENCE OF A REVISED RETURN, CLAI M MADE BY THE ASSESSEE COULD NOT BE ENTERTAINED. WITH REGARD TO THE DOUBLE DISALLOWANCE OF RS.78.93 LAKHS, THE FAA ALLOWED THE RELIEF TO THE ASSESSEE. 4. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE (AR) CONTENDED THAT DEDUCTION U/S.361)(VIII) WAS ALLOWABLE TO A CO-OPER ATIVE BANK TO THE EXTENT OF 25% OF THE INCOME ASSESSED UNDER THE HEAD BUSINESS OR PROFESSI ON IF IT WAS CARRIED TO THE RESERVE ACCOUNT, THAT IN THE E-RETURN OF INCOME THERE WAS NO SEPARAT E COLUMN FOR SPECIFYING THE DEDUCTION U/S. 36(1)(VIII) TO THE AMOUNT CARRIED TO SPECIAL RESERV E, THAT THE ONLY COLUMN PROVIDED WAS TITLE, TRANSFER TO RESERVE AND SURPLUS, THAT ACCORDINGLY T HE ASSESSEE DISCLOSED THE AMOUNT CARRIED TO SPECIAL RESERVE IN COLUMN 50 WHILE FILING THE E-RET URN, THAT THE REASONING OF THE AO THAT DEDUCTION COULD NOT BE ALLOWED IN ABSENCE OF SUPPOR TING DOCUMENT WAS INCORRECT, THAT THE CLAIM FOR DEDUCTION WAS MADE IN RETURN OF INCOME AS ALSO IN THE RECTIFICATION APPLICATION MADE U/S.154 OF THE ACT, THAT A SIMILAR ADJUSTMENT WAS MADE BY CPC IN THE INTIMATION ISSUED FOR AY.2012-13,(PG-126-130 OF THE PB),THAT THE ADJU STMENT WAS ON ACCOUNT OF DENIAL OF DEDUCTION U/S.36(1)(VIII), THAT AN APPLICATION FILE D BY THE ASSESSEE FOR RECTIFICATION INTIMATION WAS REVISED AND THE ORIGINAL RETURNED INCOME WAS AC CEPTED (PG-115-118 OF THE PB), HE RELIED UPON THE CASE OF PRUTHVI BROKERS AND SHAREHOLDERS P VT.LTD.(349ITR336), OF THE HON'BLE 6412/M/14-CITIZEN CREDIT 3 BOMBAY HIGH COURT.THE DEPARTMENTAL REPRESENTATIVE(D R)ARGUED THAT THE ASSESSEE HAD NOT FILED A REVISED RETURN FOR THE NEW CLAIM, THAT THE AO HAD RIGHTLY NEGATED THE CLAIM. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE HAD FILED E-RETURN AND LATER ON SUBMITTED AN APPLICATION TO RECTIFY THE MISTAKE, THAT THE ASSESSEE HAD CLAIMED THAT IT WAS ENTITLED TO DE DUCTION U/S. 36(1)(VIII) OF THE ACT, THAT THE AO AND THE FAA REJECTED THE CLAIM MADE BY THE ASSES SEE, THAT IN THE AY 2012-13, IN SIMILAR CIRCUMSTANCES THE CPC HAD ACCEPTED THE CLAIM MADE B Y THE ASSESSEE. HERE,WE WOULD LIKE TO MENTION THAT THE PURPOSE BEH IND ENACTING THE ACT IS TO TAX THE INCOME AND COLLECT DUE TAXES FOR STATE EXCHEQUER. FOR COLL ECTING THE TAXES AND ASSESSING THE INCOME, PROCEDURE HAS BEEN LAID DOWN. IT IS TRUE THAT WITHO UT FOLLOWING A CERTAIN PROCEDURE, NO SYSTEM CAN WORK.BUT,THE PROCEDURE CANNOT TAKE PLACE OF SUB STANCE. THE ACT CONTAIN PROVISIONS THAT DEAL WITH ASSESSMENT,RE-ASSESSMENT AND RECTIFICATIO N OF MISTAKES/REVISION OF ORDERS ETC.THE BASIC PURPOSE OF ALL THESE EXERCISES IS THAT SOVERE IGN IS NOT DEPRIVED OF ITS SHARE OF TAXES AND THE TAXPAYERS ARE NOT FASTENED WITH UNWARRANTED TAX -LIABILITY. AS EARLY AS 1955 CBDT HAD DIRECTED ITS FIELD OFFICERS NOT TO TAKE ADVANTAGE O F IGNORANCE OF THE ASSESSES WHILE FRAMING ASSESSMENTS.BECAUSE,NO STATE WOULD LIKE TO ROB ITS TAXPAYERS OF RIGHTFUL FRUITS OF THEIR HARDWORK.THEREFORE,IT IS THE DUTY OF THE OFFICERS,A DMINISTERING THE ACT,TO SEE TO IT THAT ACT IS IMPLEMENTED IN LAW AND SPIRIT.IN THE CASE UNDER CON SIDERATION THE ASSESSEES RECTIFICATION ORDER WAS NOT PASSED BECAUSE PROCEDURE,AS INTERPRET ED BY THE OFFICERS,DID NOT ALLOW THE CORRECTION OF MISTAKE.THE STAND TAKEN BY THE AO AND THE CPC RESULTED IN NON ADJUDICATION OF AN ISSUE THAT WOULD HAVE BEEN DECIDED,HAD THERE BEE N NO CPC.WE ARE UNABLE TO UNDERSTAND AS TO WHETHER THE COMPUTERISATION IS MEANT FOR MAKING THE LIFE OF A COMMON TAXPAYER EASIER OR TO COMPLICATE THE ASSESSMENT PROCEDURE. LEAVING THE DISCUSSION BEHIND,WE WOULD LIKE TO HOLD THAT THE STAND TAKEN BY THE FAA CANNOT BE ENDORSED.AS AN APPELLATE AUTHORITY AND A SENIOR OFFICER OF THE DEPARTMENT IT IS EXPECTED OF HIM TO ENSURE THAT JUSTICE IS DONE TO BOTH THE SIDE S-TO THE STATE AND THE SUBJECT.IN THE MATTER OF PRUTHVI BROKERS(SUPRA)THE HONBLE BOMBAY HIGH CO URT HAS HELD AS UNDER: AN ASSESSEE IS ENTITLED TO RAISE NOT MERELY ADDITIO NAL LEGAL SUBMISSIONS BEFORE THE APPELLATE AUTHORITIES BUT IS ALSO ENTITLED TO RAISE ADDITIONA L CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION TO PERMIT SUCH ADDI TIONAL CLAIMS TO BE RAISED. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO DEAL NOT MERELY WI TH ADDITIONAL GROUNDS, WHICH BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW, BUT WITH ADDITIONAL GROUNDS WHICH WERE AVAILABLE WHEN THE RETURN WAS FILED. THE WORDS COULD NOT HAVE BEEN RAISED MUST BE 6412/M/14-CITIZEN CREDIT 4 CONSTRUED LIBERALLY AND NOT STRICTLY. THERE MAY BE SEVERAL FACTORS JUSTIFYING THE RAISING OF A NEW PLEA IN AN APPEAL AND EACH CASE MUST BE CONSIDE RED ON ITS OWN FACTS. FROM THE ABOVE IT IS CLEAR THAT THE FAA IS EMPOWERE D TO ENTERTAIN A NEW CLAIM,EVEN IF A FRESH RETURN OF INCOME IS NOT FILED BY THE ASSESSEE .IT I S ALSO A FACT THAT FOR THE SUBSEQUENT YEAR THE CPC HAS ALLOWED THE SIMILAR CLAIM OF DEDUCTION MADE BY IT.THEREFORE,WE ARE OF THE OPINION THAT IN THE INTEREST OF JUSTICE,MATTER SHOULD BE RE STORED BACK TO THE FILE OF THE FAA FOR FRESH ADJUDICATION,WHO WILL DECIDE THE ISSUE AFTER CONSID ERING THE JUDGMENT REFERRED IN THE EARLIER PART OF OUR ORDER.EFFECTIVE GROUND OF APPEAL IS DEC IDED IN FAVOUR OF THE ASSESSEE, IN PART. AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS PA RTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY,2016. 15 , 2016 SD/- SD/- ( /JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 15.07.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.