DCIT, Cir-2, Jalpaiguri, Jalpaiguri V. M/s Uttar Banga Kshetriya Gramin Bank, Coochbihar

ITA 706/KOL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1737 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 22-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MD USMAN CIT DR SHRI S K TULS
• Keywords: Revised return
• Section: 148; 154

Judgement Text

ITA NO. 706/KOL/2015 M/S UTTAR BANGA KSHETRIYA GRAMIN BANK 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B B ENCH, KOLKATA BEFORE : SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBE R I.T.A. NO. 706/KOL/2015 A.Y : 2005-06 DCIT, CIRCLE-2, JALPAIGURI 2 ND FLOOR, C.R. BUILDING, RACE COURSE PARA, NAYA BASTY, JALPAIGURI-735101 AP PELLANT -VS- M/S UTTAR BANGA KSHETRIYA GRAMIN BANK HEAD OFFICE, SUNITY ROAD, P.O.+DIST.-COOCHBEHAR PIN-736101 PAN: AAAAK 1555 H RESPONDENT APPEARANCES BY: FOR THE APPELLANT: MD. USMAN, CIT (DR) FOR THE RESPONDENT: SHRI S.K.TULSIYAN, ADVOCAT E DATE OF HEARING : 01-11- 2017 DATE OF PRONOUNCEMENT : 19-01-2018 SHRI. S.S.VISWANETHRA RAVI, JM: 1. THIS APPEAL BY THE REVENUE AGAINST THE ORDER DAT ED 31.03.2015 PASSED BY THE LD. CIT(A)-JALPAIGURI FOR ASSESSMENT YEAR 20 05-06. ITA NO. 706/KOL/2015 M/S UTTAR BANGA KSHETRIYA GRAMIN BANK 2 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) IS JUSTIFIED IN DIRECTING THE AO TO ALLOW TH E DEDUCTION US/ 80P OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS CASE ARE THAT THE ASSES SEE IS A COMPANY WHICH IS DEEMED AS CO-OPERATIVE SOCIETY BY THE AO AND ENGAGE D IN BANKING ACTIVITY AS DEFINED U/S 5(B) OF THE BANKING REGULATION ACT, 1949. THE ASSESSEE FILED ITS RETURN OF INCOME ALONG WITH TAX AUDIT REPORT BY DECLARING A TOTAL LOSS OF RS. 63,51,25,732/-. THE SAID RETURN WAS PROCESSED U /S 143(1) OF THE ACT. THEREAFTER THE SAID ASSESSMENT WAS REOPENED BY ISSU ING A NOTICE U/S 148 OF THE ACT AND SUBSEQUENTLY NOTICES U/S 143(2) AND 142 (1) WERE ISSUED IN RESPONSE TO WHICH, THE ASSESSEE FILED NECESSARY DOC UMENTS AND PAPERS AS REQUESTED UNDER QUESTIONNAIRE. 4. DURING THE COURSE OF SAID PROCEEDINGS, THE AO H ELD THE NET LOSS OF RS. 63,51,25,732/- DECLARED BY THE ASSESSEE IN ITS RE TURN OF INCOME REPRESENTS ACCUMULATED LOSS OF THE ASSESSEE BANK AND THAT THE INCOME FOR THIS YEAR HAS TO BE INDEPENDENTLY COMPUTED. THE AO DETERMINED TH E TOTAL INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 AT RS. 8,5 2,42,840/- VIDE HIS ORDER DATED 24.12.2007 US/ 147/143(3) OF THE ACT AF TER DISALLOWING EXPENDITURE CLAIMED BY THE ASSESSEE TO THE TUNE OF RS. 5,00,86,494.35/-. THE INCOME OF THE ASSESSEE AS PER PROFIT AND LOSS A CCOUNT WAS RS. 3,51,56,351.77/-. 5. AGGRIEVED THE ASSESSEE CHALLENGED THE ORDER OF THE AO BEFORE THE CIT(A). THE CIT(A) VIDE ORDER DATED 16.03.2012 CONF IRMED THE SAID ORDER OF AO, BUT HOWEVER, DIRECTED THE AO TO CONSIDER THE A LLOWABILITY OF DEDUCTION U/S 80P OF THE ACT WHILE GIVING APPEAL EFFECT TO HI S ORDER. IN PURSUANCE THE ITA NO. 706/KOL/2015 M/S UTTAR BANGA KSHETRIYA GRAMIN BANK 3 AO PASSED AN ORDER GIVING EFFECT TO THE ORDERS OF T HE CIT(A) DATED 16.03.2012 IN APPEAL NO. 586/JAL/CIT(A)/JAL/2007-08 ON 05.06.2012. IN THIS ORDER GIVING EFFECT, THE GROSS TOTAL INCOME CO MPUTED AT RS. 8,52,42,840/-, WAS SET OFF AGAINST CARRIED FORWARD LOSSES OF EARLIER YEARS. LATER AS THE AO FOUND OUT THAT SUCH SET OFF OF CARR IED FORWARD LOSSES OF EARLIER YEARS WAS WRONGLY GIVEN, FOR THE REASON THA T NO SUCH LOSS REMAINED TO BE SET OFF, HE ISSUED A NOTICE U/S 154 TO RECTIF Y THE ORDER GIVING EFFECT TO THE CIT(A) ORDER. IN THESE RECTIFICATION PROCEEDIN GS THE ASSESSEE MADE A CLAIM FOR DEDUCTION U/S 80P OF THE ACT. THE AO REJE CTED THE SAME ON THE GROUND THAT NO SUCH CLAIM WAS MADE IN THE RETURN OF INCOME BY THE ASSESSEE. AGGRIEVED THE ASSESSEE FILED AN APPEAL BE FORE THE CIT(A) AGAINST THE ORDER PASSED BY THE AO U/S 154 ON 02.12.2014. T HE CIT(A) DIRECTED THE AO TO ALLOW DEDUCTION U/S 80P OF THE ACT. 6. AGGRIEVED WITH THIS ORDER OF THE CIT(A) THE RE VENUE BEFORE US CONTENDING THAT THE CIT(A) HAS NO JURISDICTION TO D IRECT THE AO TO ALLOW DEDUCTION U/S 80P OF THE ACT. THE LD. DR SUBMITS TH AT THE ASSESSEE DID NOT CLAIM THE DEDUCTION U/S 80P OF THE ACT IN THE RETUR N OF INCOME ORIGINALLY FILED ON 30.07.2005 AND WITHOUT THERE BEING REVISED RETUR N, THE AO RIGHTLY DENIED THE DEDUCTION U/S 80P OF THE ACT. THE LD. DR FURTHE R SUBMITS THAT THE CIT(A) HAS NO POWER TO DIRECT THE AO TO CONSIDER THE ALLOW ABILITY OF A FRESH CLAIM AND PLACED RELIANCE IN THE CASE OF GOETZ (I) PVT. L TD. REPORTED IN [2006] 204 CTR 182 (SC). THE LD. AR SUBMITS THAT THE HONBLE S UPREME COURT IN THE CASE OF GOETZ (I) PVT. LTD. SUPRA HAS HELD THAT ANY LEGAL ISSUE CAN BE RAISED BEFORE THE APPELLATE AUTHORITY WHEREIN THE SAID AUT HORITIES CAN DIRECT THE AO TO CONSIDER THE SAME IN THE ABSENCE OF ANY REVISED RETURN AND SUPPORTED THE ORDER OF CIT(A). HE RELIED ON THE JUDGMENT OF THE H ON'BLE SUPREME COURT IN THE CASE OF NTPC LTD. REPORTED IN 229 ITR 383 (SC). ITA NO. 706/KOL/2015 M/S UTTAR BANGA KSHETRIYA GRAMIN BANK 4 7. HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. WE FIND THE FACT REMAINS ADMITTED THAT THERE IS NO CLAIM BY THE ASSESSEE REGARDING ALLOWABILITY OF DEDUCTION U/S 80P OF THE ACT IN THE RETURN OF INCOME FILED BY IT. THIS MIGHT POSSIBLY BE SO, AS THERE WA S NO POSITIVE INCOME DECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME OR IGINALLY FILED. IN THE FIRST ROUND OF APPELLATE PROCEEDINGS THE CIT(A) DIRECTED THE AO TO EXAMINE THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S 80P OF THE A CT, IN VIEW OF POSITIVE INCOME DETERMINED BY THE AO, IN THE ORDER GIVING EF FECT TO THE ORDER OF THE LD. CIT(A). THE AO IN THE ORDER GIVING EFFECT TO TH E ORDER OF THE LD. CIT(A) PASSED U/S 153(5) OF THE ACT (SIC U/S 251) AS ON 05 .06.2012 THE INCOME WAS COMPUTED AS UNDER : IN PURSUANCE OF THE ORDER OF LD. CIT(A), JALPAIGUR I, DATED 16.03.2012 IN APPEAL NO. 586/JAL/CIT(A)/JAL/2007-08 DATED 20.02.2008, THE AS SESSMENT ORDER U/S 147/143(3) DATED 24.12.2007 OF THIS OFFICE IS REVISED AS PER CALCULATION OF TOT AL INCOME AND TAX THEREON GIVEN HEREUNDER: TOTAL INCOME AS PER ORDER U/S 147/143(3) DATED 24.1 2.2007 RS. 8,52,42,840/- LESS: RELIEF ALLOWED BY LD. CIT(A), JALPAIGURI RS . NIL TOTAL REVISED INCOME RS. 8,52,42,840/- LESS: TOTAL LOSS FROM A.Y. 1997-98 TO 2004-05 (-) RS. 32,23,84,000/- REMAINING LOSS (-) RS. 23,71,41,160/- TAX PAYABLE RS. NIL LOSS TO BE CARRIED FORWARD AND SET OFF IN THE SUBSE QUENT ASSESSMENT YEAR DEDUCTION U/S 80P IS BEING DISALLOWED SINCE THE ASS ESSEE HAS NOT CLAIMED DEDUCTION U/S 80P IN THE RETU RN OF INCOME. HE DISALLOWED THE CLAIM OF DEDUCTION U/S 80P ON THE GROUND THAT THE ASSESSEE HAS NOT CLAIMED HE SAME IN ITS RETURN OF I NCOME. LATER THE AO REALIZED THAT SET OFF OF CARRY FORWARD LOSSES OF RS . 32,23,84,000/- WAS WRONGLY ALLOWED IN THIS ORDER DATED 05.06.2012 TO T HE ASSESSEE. HE INITIATED RECTIFICATION PROCEEDING U/S 154 OF THE ACT. IN THE SE PROCEEDING U/S 154 THE ASSESSEE HAS ONCE AGAIN CLAIMED DEDUCTION U/S 80P O F THE ACT. THIS WAS ITA NO. 706/KOL/2015 M/S UTTAR BANGA KSHETRIYA GRAMIN BANK 5 AGAIN DENIED BY THE AO BY REITERATING HIS STAND THAT THIS DEDUCTION CANNOT BE ALLOWED AS THE ASSESSEE HAS NOT CLAIMED THE SAME IN ITS RETURN OF INCOME. ON APPEAL THE LD. CIT(A) IN THE SECOND ROUND OF APP EAL PROCEEDINGS DIRECTED THE AO TO ALLOW THIS CLAIM OF THE ASSESSEE. IN OUR VIEW, THE LD. CIT(A) WAS WRONG IN HIS ABOVE DECISION FOR VARIOUS REASONS WHI CH WE DISCUSS BELOW. WE FIND THAT HONBLE SUPREME COURT IN THE CASE OF GOET Z (I) LTD. REPORTED IN [2006] 204 CTR 182 (SC) : 2006 284 ITR 323 (SC) HA S HELD AS UNDER: 2. THE QUESTION RAISED IN THIS APPEAL RELATES TO WH ETHER THE APPELLANT ASSESSEE COULD MAKE A CLAIM FOR DEDUCTION OTHER THAN BY FILING A REVISED RETURN. THE ASSESSMENT YEAR IN QUESTION WAS 1995-96. THE RETURN WAS FILED ON 30-11-1995, BY THE APPELLANT FOR THE ASSESSMENT YEAR IN QUESTION. ON 12-1-1998, THE APPELLANT SOUGHT TO CLA IM A DEDUCTION BY WAY OF A LETTER BEFORE THE ASSESSING OFFICER. THE DEDUCTION WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THERE WAS NO PROVISION UNDER THE INCOME TAX ACT TO MAKE AMENDMENT IN THE RETURN OF INCOME BY MODIFYING AN APPLICATION AT THE ASSESSMENT STAGE WITHOUT REVISING THE RETURN. 3. THIS APPELLANT'S APPEAL BEFORE THE COMMISSIONER (APPEALS) WAS ALLOWED. HOWEVER, THE ORDER OF THE FURTHER APPEAL OF THE DEPARTMENT BEFORE THE INCOME TAX APPELLATE TRIBUNAL WAS ALLOWED. THE APPELLANT HAS APPROACHED THIS COURT AND HAS SUB MITTED THAT THE TRIBUNAL WAS WRONG IN UPHOLDING THE ASSESSING OFFICER'S ORDER. HE HAS REL IED UPON THE DECISION OF THIS COURT IN NATIONAL THERMAL POWER COMPANY LTD. V. CIT (1998) 229 ITR 383, TO CONTEND THAT IT WAS OPEN TO THE ASSESSEE TO RAISE THE POINTS OF LAW EVEN BEFORE THE APPELLATE TRIBUNAL. 4. THE DECISION IN QUESTION IS THAT THE POWER OF TH E TRIBUNAL UNDER SECTION 254 OF THE INCOME TAX ACT, 1961, IS TO ENTERTAIN FOR THE FIRST TIME A POINT OF LAW PROVIDED THE FACT ON THE BASIS OF WHICH THE ISSUE OF LAW CAN BE RAISED BEFORE THE TRI BUNAL. THE DECISION DOES NOT IN ANY WAY RELATE TO THE POWER OF THE ASSESSING OFFICER TO ENT ERTAIN A CLAIM FOR DEDUCTION OTHERWISE THAN BY FILING A REVISED RETURN. IN THE CIRCUMSTANCES OF TH E CASE, WE DISMISS THE CIVIL APPEAL. HOWEVER, WE MAKE IT CLEAR THAT THE ISSUE IN THIS CASE IS LIM ITED TO THE POWER OF THE ASSESSING AUTHORITY AND DOES NOT IMPINGE ON THE POWER OF THE INCOME TAX APPELLATE TRIBUNAL UNDER SECTION 254 OF THE INCOME TAX ACT, 1961. THERE SHALL BE NO ORDER A S TO COSTS. 8. IN THE AFOREMENTIONED DECISION, THE HONBLE SUPR EME COURT MADE IT CLEAR THAT THE POWER OF ASSESSING AUTHORITY IS LIMI TED IN ENTERTAINING A NEW CLAIM, IN THE ABSENCE OF A CLAIM IN ORIGINAL RETURN OF INCOME. THE AO HAS POWER TO ENTERTAIN THE SAME ONLY THROUGH A REVISED RETURN OF INCOME. IN THE PRESENT CASE, THE LD. CIT(A) IN THE FIRST ROUND OF APPELLATE PROCEEDINGS HAS DIRECTED THE AO TO CONSIDER THE FRESH CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80P IN THE ORDER GIVING EFFECT TO HIS APPELLATE ORD ER. IN OUR VIEW, A FRESH CLAIM U/S 80P CANNOT BE CONSIDERED IN AN ORDER GIVI NG EFFECT TO THE ORDER OF ITA NO. 706/KOL/2015 M/S UTTAR BANGA KSHETRIYA GRAMIN BANK 6 THE LD. CIT(A). AN ORDER U/S 153(5) IS NOT A FRESH ASSESSMENT ORDER. IT IS TO BE PASSED MECHANICALLY AND THERE IS NO SCOPE FOR FR ESH ADJUDICATION AND FRAMING AN ASSESSMENT ORDER. GRANT OF DEDUCTION U/S 80P IS A FRESH EXERCISE AND REQUIRES EXAMINATION AND ADJUDICATION. THIS CAN NOT BE DONE IN PROCEEDING GIVING EFFECT TO THE ORDER OF THE LD. CI T(A) IN AN ORDER TO BE PASSED U/S 153(5) OF THE ACT. IN THIS ORDER THE AO HELD AS FOLLOWS: DEDUCTION U/S 80P IS BEING DISALLOWED SINCE, THE A SSESSEE HAS NOT CLAIMED DEDUCTION U/S 80P IN THE RETURN OF INCOME. THIS DECISION OF THE AO IN HIS ORDER DATED 05.06.2 012 WAS NOT CHALLENGED BY THE ASSESSEE. BE AS IT MAY, THE ASSESSEE SEEKS G RANT OF DEDUCTION U/S 80P IN A PROCEEDING U/S 154 WHICH WAS INITIATED TO RECTIFY THE MISTAKE APPARENT ON RECORD IN THE ORDER OF THE AO DATED 05. 06.2012. THIS FRESH CLAIM CANNOT BE ENTERTAINED IN A PROCEEDING U/S 154. ONL Y MISTAKES APPARENT ON RECORD CAN BE RECTIFIED. THUS, THE DIRECTION OF THE LD. CIT(A) IN THE IMPUGNED ORDER IS ERRONEOUS AND BAD IN LAW. HENCE, WE ALLOW THIS GROUND OF APPEAL OF THE REVENUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19-01-2018. SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 19-01-2018 SB,SR. PS ITA NO. 706/KOL/2015 M/S UTTAR BANGA KSHETRIYA GRAMIN BANK 7 COPIES TO : (1) APPELLANT/DEPARTMENT: DCIT, CIRCLE-2, JALPAIGURI (2) RESPONDENT/ASSESSEE: M/S UTTAR BANGA KSHETRIYA GRAMIN BANK (3)COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SR.PS/H.O.O ITAT, KOLKATA