Sangli District Central Co-op. Bank Ltd., Sangli V. Pr. Commissioner of Income-tax : 1,

ITA 728/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4305 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-07-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 18-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Assessee Lawyers: N O N E
• Section: 37(1); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 728 /P U N/201 6 / ASSESSMENT YEAR : 20 12 - 13 SANGLI DISTRICT CENTRAL CO - OP. BANK LTD., PAD. VASANTDADA PATIL ROAD, KARMVEER BHAURAO PATIL CHOWK, SANGLI 416416 PAN : AAAAS1099Q ....... / APPELLANT / V/S. THE COMMISSIONER OF INCOME TAX - 1, KOLHAPUR / RESPONDENT ASSESSEE BY : N O N E REVENUE BY : SHRI M.K. GAUTAM / DATE OF HEARING : 3 0 - 07 - 201 8 / DATE OF PRONOUNCEMENT : 03 - 0 8 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF PR. COMMI SSIONER OF INCOME TAX - 1, KOLHAPUR DATED 18 - 03 - 2016 PASSED U/S. 263 O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR THE ASSESSMENT YEAR 2012 - 13. 2 ITA NO . 728/PUN/2016, A.Y. 2012 - 13 2. THE NOTICE OF APPEAL WAS DULY SERV ED ON THE ASSESSEE ON 26 - 12 - 2017 FOR 25 - 01 - 2018. ON THE SAID DATE AT THE WRITTEN REQUEST OF ASSESSEE/APPELLANT , THE APPEAL WAS ADJOURNED TO 09 - 04 - 2018. ON 09 - 04 - 2018 THE ASSESSEE AGAIN VIDE LETTER DATED 09 - 04 - 2018 SOUGHT ADJOURNMENT. ACCORDINGLY, THE APPEAL WAS ADJOURNED TO 07 - 06 - 2018. ON 07 - 06 - 2018 NONE APPEARED ON BEHALF OF THE ASSESSEE . IN THE INTEREST OF JU STICE FRESH NOTICE WAS ISSUED TO THE ASSESSEE THROUGH RPAD FOR 30 - 07 - 2018. ON 30 - 07 - 2018 AGAIN NONE APPEARED TO REPRESENT THE ASSESSEE. IT SEEMS THAT THE ASSESSEE IS NOT KEEN TO PURSUE THE APPEAL. ACCORDINGLY, WE PROCEED TO DECIDE THE APPEAL OF THE ASSE SSEE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND WITH THE ASSISTANCE OF LD. DR. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE : THE ASSESSEE IS A CO - OPERATIVE BANK AND IS ASSESSED AS AOP. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 26 - 09 - 2012 DECLARING TOTAL INCOME OF RS.14,27,29,646/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY, STATUTORY NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 06 - 08 - 2013. IN SCRUTINY ASSE SSMENT PROCEEDINGS THE ASSESSING OFFICER MADE DISALLOWANCE OF PROVISION FOR EX - GRATIA BONUS TO THE EMPLOYEES RS.38,30,153/ - AND ASSESSED THE TOTAL INCOME AT RS.14,65,59,800/ - . THEREAFTER, PR. COMMISSIONER OF INCOME TAX ISSUED NOTICE U/S. 263 TO THE ASSESS EE ON 12 - 02 - 2016. THE PR. COMMISSIONER OF INCOME TAX OBSERVED THAT THE ASSESSING OFFICER WHILE FRAMING ASSESSMENT HAS FAILED TO MAKE ENQUIRIES WITH RESPECT TO FOLLOWING EXPENDITURES CLAIMED FOR THE FIRST TIME IN PROFIT AND LOSS ACCOUNT : 3 ITA NO . 728/PUN/2016, A.Y. 2012 - 13 I . PROVISIONS FOR S TRENGTHENING PRIMARY INSTITUTIONS RS.3,47,00,000/ - . II . PROVISIONS FOR DEVELOPMENT OF PRIMARY INSTITUTIONS RS.7,25,00,000/ - . THE PR. COMMISSIONER OF INCOME TAX VIDE IMPUGNED ORDER SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF AFORESAID PROVISIONS. AGAINST THE ABOVE DIRECTIONS OF PR. COMMISSIONER OF INCOME TAX IN REVISION PROCEEDINGS, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. SHRI M.K. GAUTAM REPRESENTING THE DEPARTMENT SUBMITTED THAT A PERUSAL OF ASSESSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS NOT EXAMINED ASSESSEES CLAIM OF PROVISIONS FOR STRENGTHENING PRIMAR Y INSTITUTIONS AND DEVELOPMENT OF PRIMARY INSTITUTIONS . THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER WITH RESPECT TO ALLOWABILITY OF ABOVE SAID PROVISIONS CLAIMED BY THE ASSESSEE AS EXPENDITURES U/S. 37(1) OF THE ACT. THE LD. DR POINTED THAT IN PARA 6 .5(IX) OF THE IMPUGNED ORDER PR. COMMISSIONER OF INCOME TAX HAS CATEGORICALLY OBSERVED THAT ON VERIFICATION OF THE LIST OF DISTRIBUTION OF FUNDS IT TRANSPIRED THAT THE AMOUNT AS LOW AS RS.5/ - IN MORE THAN 480 CASES, RS.10/ - IN EQUAL NO. OF CASES OF SOCIETI ES AND BELOW RS.1000/ - IN MANY CASES HAS BEEN DISTRIBUTED TO THE PRIMARY CO - OPERATIVE SOCIETIES FOR STRENGTHENING AND DEVELOPMENT. IT IS BEYOND COMPREHENSION AS TO HOW SUCH A MEAGER AMOUNT OF RS.5/ - , RS.10, OR FOR THAT MATTER RS.1000/ - WOULD STRENGTH AND DEVELOP PRIMARY CO - OPERATIVE SOCIETIES. THE ASSESSEE HAS PROVIDED THE LIST OF 4050 PRIMARY CO - OPERATIVE SOCIETIES WHEREIN FUNDS TO THE TUNE OF RS.7,19,56,347/ - HAVE BEEN DISTRIBUTED. NO BASIS OF DISTRIBUTION OF FUNDS HAS BEEN PROVIDED BY THE 4 ITA NO . 728/PUN/2016, A.Y. 2012 - 13 ASSESSEE. T HE LD. DR POINTED THAT THE PR. COMMISSIONER OF INCOME TAX AFTER VERIFICATION RIGHTLY OBSERVED THAT THE ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE , AS THE CLAIM OF ASSESSEE TO THE TUNE OF RS.10.72 CORES HAS BEEN ALLOWE D WITHOUT VERIFICATION. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY LD. DR AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PR. COMMISSIONER OF INCOME TAX HAS INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT ON THE GROUND THAT THE ASSESSING OFFICER HAS FAILED TO INVESTIGATE/INQUIRE THE ASSESSEES CLAIM OF PROVISIONS FOR STRENGTHENING AND DEVELOPING OF PRIMARY CO - OPERATIVE SOCIETIES. THE ASSESSEE HAS CLAIMED APPROXIMATELY RS.10.72 CRORES U/S. 37(1) FOR THE ABOVE SAID PURPOSE. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THERE IS NO DISCUSSION OR REFERENCE TO THE ABOVE SAID CLAIM MADE BY T HE ASSESSEE. IT IS NOT EMANATING FROM THE ASSESSMENT ORDER WHETHER ANY INQUIRY WAS MADE BY THE ASSESSING OFFICER BEFORE ALLOWING THE CLAIM OF ASSESSEE WITH REGARD TO SUCH EXPENDITURE ON STRENGTHENING AND DEVELOPING OF CO - OPERATIVE SOCIETIES. ON THE BASIS OF MATERIAL AVAILABLE BEFORE US , PRIMA - FACIE IT APPEARS THAT THE ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE AND THE PR. COMMISSIONER OF INCOME TAX WAS WELL WITHIN ITS JURISDICTION TO INITIATE REVISION PROCEEDINGS U/S . 263 OF THE ACT. THE PR. COMMISSIONER OF INCOME TAX SET ASIDE THE ASSESSMENT ORDER WITH THE FOLLOWING DIRECTIONS TO THE ASSESSING OFFICER : THE ASSESSING OFFICER IS DIRECTED TO EXAMINE THE CLAIM OF PROVISIONS FOR GRANTS MADE ON A/C OF STRENGTHENING AND DEVELOPMENT OF PRIMARY CO - OPERATIVE SOCIETIES AND DECIDE ALLOWABILITY OF SUCH PROVISION AS PER PROVISIONS OF SECTION 37(1) OF THE I.T. ACT IN VIEW OF ABOVE FACTS AND OBSERVATIONS AND PASS THE ASSESSMENT ORDER AFRESH AFTER CONDUCTING PROPER ENQUIRIES, PROPE R EXAMINING/ INVESTIGATION ASSESSEES EXPLANATION AND THE EVIDENCES PRODUCED BEFORE THE HIM & PRODUCED DURING PROCEEDINGS U/S. 263 OF THE I.T. ACT. 5 ITA NO . 728/PUN/2016, A.Y. 2012 - 13 WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF PR. COMMISSIONER OF INCOME TAX. ACCORDINGLY, THE SAME IS UPHEL D AND THE APPEAL OF ASSESSEE IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 03 RD DAY OF AUGUST, 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 03 RD AUGUST, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE PR. COMMISSIONER OF INCOME TAX - 1, KOLHAPUR 4. THE INCOME TAX OFFICER, W - 1(3), SANGLI 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE