M/s Kodagu District Co-Operative Central Bank Ltd., Madikeri V. DCIT, Hassan

ITA 761/BANG/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5506 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 07-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU JT BENGALURU
• Assessee Lawyers: V SRINIVASAN
• Keywords: Rectification of order
• Section: 14A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ITA NO.761/BANG/2016 ASSESSMENT YEAR : 2010-11 M/S. KODAGU DISTRICT CO-OPERATIVE CENTRAL BANK LTD., GENERAL THIMMAIAH CIRCLE, MADIKERI 571 201. PAN: AAAAK 3661L VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI M.K. BIJU, JT.CIT(DR)(ITAT-3), BENGALURU. DATE OF HEARING : 18.04.2017 DATE OF PRONOUNCEMENT : 21.04.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR A S THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY , WEIGHT OF EVIDENCE , PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE IMPUGNED ORDER PASSED BY THE LEARNED CIT[A] IS OPPOSED TO LAW AND FACTS OF THE APPELLANT'S CASE IN AS MUCH AS THE LEARNED CIT[A] HAS DIRECTED THE LEARNED A.O. TO REC TIFY THE ITA NO.761/BANG/2016 PAGE 2 OF 5 ASSESSMENT ORDER THAT WAS CHALLENGED IN APPEAL AND THEREAFTER, HE HAS DISMISSED THE APPEAL ON THE GROUND THAT THE ORD ER PASSED U/S. 154 OF THE ACT HAS BEEN CHALLENGED BY THE APPELLANT SEPARATELY UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APP ELLANT ' S CASE . 3. WITHOUT PREJUD I CE TO THE ABOVE, THE LEARNED CIT[A] AFTER OBSERVING THAT THE ASSESSMENT ORDER PASSED BY THE L EARNED A.O. WAS A NON-SPEAKING ORDER OUGHT TO HAVE CANCE LL ED THE ASSESSM E NT INSTEAD OF DISM I SSING THE APPEAL ON THE G R OUND THAT T H E A.O. H AS S I NCE RECTIF I ED THE ORDER U/S . 154 OF THE ACT UNDER THE FACTS AND IN T H E C IR CUMS T ANCES OF THE APPELLANT'S CASE. 4. WITHOUT PREJUDICE TO THE ABOVE, LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ASSESSMENT OF RS.7,76,38 , 490/- AS THE TOTAL INCOME OF THE APPELLANT AS AGAINST THE R ETURNED I NCOME OF RS . 4 , 01,00,700/- BY VIRTUE OF DISMISSAL OF THE APPEA L UNDER THE FACT AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CA SE. 5. THE LEARNED (IT[A] IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.4,79,73,764/- TOWARDS ALLEGED INTEREST ACCRUED ON LOANS AND ADVANCES WITH COMPLETE DISREGARD TO THE S YSTEM OF ACCOUNTING CONSISTENTLY FOLLOWED BY THE APPELLANT SINCE PAST 90 YEARS OF FORMATION OF THE BANK UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 6. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDIN G THE ADDITION OF RS. 19,41,647/- PRESSING THE PROVISION OF SEC. 14A OF THE INCOME-TAX ACT WITHOUT SATISFYING THE CONDITION S STIPULATED THERE IN UNDER THE FACTS AND IN THE CIRCUMSTANCES O F THE APPELLANT'S CASE. 7. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH THE HON'BLE CCIT/DG, THE APPELLANT DENIES ITSELF LIABL E TO BE CHARGED TO INTEREST U/S 234 B AND 234-C OF THE ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT 'S CASE DESERVES TO BE CANCELLED. 8. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE C OSTS. ITA NO.761/BANG/2016 PAGE 3 OF 5 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT THE CIT(APPE ALS) WHILE ADJUDICATING THE APPEAL HAS NOTICED THAT THE AO HAS NOT EXAMINED CER TAIN ISSUES AND HE ACCORDINGLY INSTEAD OF ADJUDICATING ALL THE ISSUES, HAS ASKED THE AO TO PASS A RECTIFICATION ORDER ON THESE ISSUES. CONSEQUENTL Y THE RECTIFICATION ORDER WAS PASSED BY THE AO U/S. 154 OF THE ACT. BEING AG GRIEVED BY THE RECTIFICATION ORDER, THE ASSESSEE HAS FILED AN APPE AL AGAINST THE ADDITIONS MADE IN THAT ORDER. NOW THE APPEAL IS PENDING BEFO RE THE CIT(APPEALS). 3. AGAINST THE DIRECTIONS GIVEN BY THE CIT(APPEALS) TO PASS A RECTIFICATION ORDER BY THE AO, A CHALLENGE IS BEFOR E US THROUGH THIS APPEAL. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT THE CIT(APPEALS) HAS NO JURISDICTION TO ASK THE AO TO P ASS A RECTIFICATION ORDER. HE SHOULD HAVE ADJUDICATED THE ENTIRE ISSUE HIMSELF AND IF NEED BE, HE COULD HAVE CALLED FOR A REMAND REPORT. THEREFORE, THE ACTION OF THE CIT(APPEALS) IS INCORRECT. 5. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED THA T THE CIT(APPEALS) HAS NEITHER REMANDED THE MATTER BACK TO THE AO NOR SET ASIDE HIS ORDER. HE HAS SIMPLY ASKED THE AO TO PASS A RECTIFICATION ORDER ON CERTAIN ISSUES. THEREFORE, THERE IS NO ERROR OR ILLEGALITY IN THE O RDER OF CIT(APPEALS). 6. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT THE APPEAL AGAIN ST THE RECTIFICATION ORDER ITA NO.761/BANG/2016 PAGE 4 OF 5 IS PENDING BEFORE THE CIT(APPEALS), WHERE THE CIT(A PPEALS) OUGHT TO ADJUDICATE ALL THE ISSUES ON MERITS. WE, HOWEVER, FIND FORCE IN THE CONTENTION OF THE ASSESSEE THAT THE CIT(APPEALS) IN STEAD OF ASKING THE AO TO PASS A RECTIFICATION ORDER, SHOULD HAVE DISPOSED THE APPEAL ON MERITS BY CALLING FOR A REMAND REPORT FROM THE AO. UNDER THE SE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE THIS MATTER BE SENT BACK T O THE CIT(APPEALS) TO ADJUDICATE THE ISSUES RAISED IN THIS APPEAL ALONG W ITH THE OTHER APPEAL FILED AGAINST THE RECTIFICATION ORDER. WE ACCORDINGLY SE T ASIDE THE ORDER OF CIT(APPEALS) AND RESTORE THE MATTER TO THE FILE OF CIT(APPEALS) TO ADJUDICATE IT AFRESH ALONG WITH THE APPEAL FILED AG AINST THE ORDER OF AO PASSED ON RECTIFICATION. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF APRIL, 2017. SD/- SD/- ( S. JAYARAMAN ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 21 ST APRIL, 2017. / D ESAI S MURTHY / ITA NO.761/BANG/2016 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.