DCIT, Circle, Rohtak V. Sarva Haryana Gramin Bank, Rohtak

ITA 676/DEL/2023

AI Insights

The case involves Sarva Haryana Gramin Bank, which appealed against the penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, for the Assessment Year 2015-16. The penalty was initially based on several disallowances including non-allowance under Section 14A read with Rule 8D, disallowance of deduction for amortization of premium on securities, and disallowance for loss on sale of obsolete stationery. The CIT(A) reversed the penalty, a decision which the Revenue challenged in the ITAT. The ITAT upheld the CIT(A)'s decision, noting that two of the disallowances were deleted in quantum proceedings and the third, regarding the loss on obsolete stationery, was supported by documentary evidence showing the bona fides of the claim.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121717 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 21-08-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 13-03-2023
• Other Referred Cases: ITA No. 1984/Del/2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 2; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.676/DEL/2023 Assessment Year 2015-16 DCIT Circle-Rohtak Haryana Vs. Sarva Haryana Gramin Bank Delhi Road, Rohtak Haryana. TAN/PAN: AAKAS1464M (Appellant) (Respondent) Appellant by: Shri Vivek Gupta, Adv. Respondent by: Shri Anuj Garg, Sr.DR Date of hearing: 22 08 2023 Date of pronouncement: 22 08 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The capt ioned appeal has been fi led b y t he assessee agai nst t he order of t he ld. Commi ssioner of I nco me Tax (Appeal s) - Nat iona l Faceless Appe al Cent re (NF A C), Delhi (‘CI T(A) ’ in s hor t ) dat ed 09. 01. 2023 ar isi ng f r o m the penalt y or der dat ed 28. 03. 2022 passed b y the Assessing Off icer ( AO) under S ecti on 271(1)( c) of t he I ncome Tax Act , 1961 (the Act ) con cer nin g AY 2015-16. 2. As per t he gr ounds of appeal, t he Reve nue has chall enged the re versal of penalt y of Rs.1,79, 17,8 19/- b y t he C I T( A) i mposed under Sect ion 271( 1) (c) of the A ct b y t he Assessi ng Of fi cer. I.T.A. No.676/Del/2023 2 3. When t he matt er was cal l ed f or hear ing, the l d. couns el i n the Reve nue ’s appeal poi nte d out t hat i mpugne d penalt y under Secti on 271( 1)( c) ari ses f rom ( i) di sal lowance of Rs.2,31,1 7,8 69/- under Sect i on 1 4A read wi th R ul e 8D of the Inc o me Tax Rules; (i i ) di sal lowance of deduct i on of Rs.2,33,0 2,7 68/- i n respect o f amor ti zat ion of pre miu m pai d at the t i me of purc hase of sec uri ti es over the re mai ning perio d of securi ti es (i i i) di sal lowa nce of Rs.57,21,00 0/- on acc ount of loss on sal e of obsolet e st at i oner y and ot her pet t y i t e ms. 4. The l d. counsel advert ed to t he deci s ion of t he Co- or di nat e Benc h in the q uant u m pr ocee din gs i n assessee’s ow n case f or the Assess me nt Year 2015- 16 i n I TA N o. 1984/ Del/ 2019 or der dat ed 19. 10. 2022 i n questi on and sub mi tt ed t hat f irst t wo i ssues hav e bee n adj udi cated in fa vour of t he assessee and t he quant u m addit ion it sel f has been delete d. As r egar ds t hi rd i ss ue t owar ds di sall owance of l oss cl ai me d on sa le of obsolete stat i oner y a nd ot her pett y i te ms, t he l d. counsel s ub mit ted that the I TAT has obser ved that t he docu ment ar y e vidences have been placed t o support t he bona f ides of t he cl ai m but however the I TA T remit t ed t he mat t er i n t he quant u m procee dings t o the f il e of the Assessi ng Of fi cer t o t ake cogni zance of the docu mentar y evi de nces. O n meri t s, t he l d. couns el sub mi tt ed t hat the cl ai m towar ds loss on account of obsolet e st at i oner y ari ses owing t o the f act th at erstwhi le Gur ga on G ra mi n Ba nk a nd erst whi l e Har ya na Gra mi n Bank wer e a malga mated i nt o s ingle bank na mel y, t he assessee herein. As a consequence, t he pri nt ed stati oner y i n t he na me of er st whil e ba nk beca me ob solete and the manage ment of t he bank deci de d t o di spose of such unusabl e I.T.A. No.676/Del/2023 3 stock of st at ionar y and t he r es ul tant losses wer e booked i n th e or di nar y course of busi ness. Under t he ci rcu msta nces, it was pl eaded that i mp osit ion of penal t y under S ecti on 271(1) ( c) is hi ghl y unjust if ied and undeser ving. 5. As point ed out o n behal f of th e assessee, t he i mposi ti on of pen al t y f lows fr om t he a ddi ti ons/ disall owances as li st ed i n the prece ding para graph. Tw o of such di sal lowances/ addit i ons st ood del eted i n t he quantu m pr oceedi ngs and t her ef or e, the ver y basis for i mposi t ion o f penal t y d oes not sur vi ve an y mo re. The conse quenti al penal t y u nder Sect ion 271(1) ( c) t hus aut o mat ical l y cea se to sur vive. As regar ds t he t hi rd i te m of di sall owance on acco unt of obsol et e st at ioner y etc., we fi rstl y not ice t hat t he as sessee is a rural bank r un b y t he pr ofessi onal ma nage ment. Si mult aneousl y, w e also take note of t he fact t hat the a mal ga mat i on has taken place r esul ti ng i n the stati oner y bec o mi ng unusabl e and obs olete. In t he wake of such f acts cou ple d wit h t he fact t hat t he docu ment ar y evi dences wer e pl aced i n t he q uant u m pr oceedi ngs as not ed b y t he Co- or dinat e Benc h, we f ind t hat t he b ona f ides of the l osses clai med ar e suffi ci entl y pr oved. The onus t hat l a y u pon t he assessee has bee n pri mari l y di schar ge d on t he para met er s of penalt y pr ocee din gs. Wit hout pr ej udi ce, it i s wel l settl ed that a mer e wr ong cl ai m b y it sel f wil l not, i pso facto, i nvi te i mp osit i on of pen al t y un der Se ct ion 2 71( 1)( c) w here t he b ona f i des of the acti on of t he assessee are be yon d r ea sonabl e doubt. 6. I n the t otal it y of ci rcu mstances, we fi nd meri t i n t he plea of t he assessee for exonerat io n fr o m t he cl utc hes of penalt y I.T.A. No.676/Del/2023 4 under Sect i on 271(1) (c) of the Act. 7. We thus e ndorse t he act i on of t he CIT( A) a nd decli ne t o interfere t her ewit h. 8. I n t he resul t, t he appeal of t he Reve nue i s dis mi ssed. Order pronounced in the open Court on 22/08/2023 Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] VICE PRESIDENT ACCOUNTANT MEMBER DATED: /08/2023 Prabhat