M/S AJMER URBAN COOPERATIVE BANK LTD., Ajmer V. DEPUTY COMMISSIONER OF INCOME TAX, AJMER

ITA 832/JPR/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4812 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 21-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KARANI DAN
• Keywords: Bad and doubtful debts; Assessment record
• Section: 143(3); 148; 263; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 832/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 M/S THE AJMER URBAN COOPERATIVE BANK LTD., BABU MOHALLA, KAISARGANJ, AJMER. CUKE VS. THE DCIT, CIRCLE-1 AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAABT 2333 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE (WRITTEN SUBMISSION) JKTLO DH VKSJ LS @ REVENUE BY : SHRI KARANI DAN (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 08/08/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 09/08/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 03.04.2018 OF THE LD. CIT(A), AJMER ARISING FROM OR DER PASSED U/S 154 OF THE ACT BY THE AO FOR THE ASSESSMENT YEAR 2009-1 0. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. THAT THE CIT(APPEALS) AJMER ERRED IN MAINTAININ G ORDER OF AO PASSED U/S 154 OF IT ACT WITHOUT APPRECIATING THE FULL FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO. 832/JP/2018 M/S THE AJMER URBAN COOPERATIVE BANK LTD. VS. DCIT 2 2. THAT THE CIT(APPEALS) AJMER NOT CONSIDERED THE O RIGINAL ASSESSMENT ORDER PASSED ON 29.12.11 U/S 143(3) OF I T ACT FOR 2009-10 AND CONSIDERED THE ORDER PASSED U/S 263 OF IT ACT WHICH IS QUITE WRONG AND UNJUSTIFIED BECAUSE OF PASSED IN PURSUANCE TO 263 ORDER AND NOT APPLYING HIS MIND WHEREAS THE ORD ER PASSED U/S 143(3) DATED 29.12.2011 WAS CONSCIOUS ORDER PAS SED AFTER APPLICATION OF MIND AND CANNOT BE RECTIFIED AFTER T HE EXPIRY OF FOUR YEA I.E. 31.03.2016. 3. THAT THE ORDER OF BOTH THE LOWER AUTHORITIES ARE BAD IN LAW. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESP ITE THE REPEATED NOTICES WERE ISSUED THROUGH RPAD. THE ASSE SSEE HAS FILED WRITTEN SUBMISSIONS. THEREFORE, WE PROPOSED TO HEAR AND DISPOSED OFF OF THIS APPEAL EX-PARTE BY CONSIDERING THE WRITTEN SUBMISSIONS OF THE ASSESSEE AND ARGUMENT OF THE LD. DR. THE ORIGINAL A SSESSMENT ORDER U/S 143(3) WAS COMPLETED IN THE CASE OF THE ASSESSE E ON 29.11.2011 AT TOTAL LOSS OF RS. 6,35,67,293/-. SUBSEQUENTLY ON PE RUSAL OF THE ASSESSMENT RECORD, THE LD. CIT NOTED THAT THE AO WH ILE FRAMING THE ASSESSMENT HAS ALLOWED THE CLAIM ON ACCOUNT OF PROV ISIONS MADE FOR BAD AND DOUBTFUL DEBTS OF RS. 2,17,06,376/-. ACCORD INGLY, THE LD. CIT ISSUED SHOW CAUSE NOTICE U/S 263 OF THE ACT FOR REV ISION OF THE ASSESSMENT ORDER ON THE ISSUE OF ALLOWING THE CLAIM OF PROVISIONS FOR BAD AND DOUBTFUL DEBTS. THE ORDER U/S 263 WAS PASSE D BY THE LD. CIT(A) ON 24.03.2014. THEREAFTER THE AO PASSED THE ASSESSMENT ORDER ITA NO. 832/JP/2018 M/S THE AJMER URBAN COOPERATIVE BANK LTD. VS. DCIT 3 U/S 143(3) OF THE ACT IN PURSUANT TO THE ORDER OF T HE LD. CIT PASSED U/S 263 OF THE ACT ON 30.04.2014. THE ASSESSING OFFICER THEN ISSUED A NOTICE U/S 154 OF THE ACT ON 28.02.2017 FOR RECTIFY ING THE MISTAKE IN RESPECT OF THE BROUGHT FORWARD LOSSES IN PURSUANT T O THE REASSESSMENT ORDER PASSED U/S 148 R.W.S. 143(3) OF THE ACT FOR T HE ASSESSMENT YEAR 2008-09 WHEREBY THE LOSSES OF RS. 8,22,49,560/- WER E REDUCED TO RS. 5,28,05,175/-. THUS IN ORDER TO GIVE EFFECT TO THE REASSESSMENT ORDER FOR THE ASSESSMENT ORDER 2008-09 THE AO PROPOSED TO PASS AN ORDER U/S 154 OF THE ACT FOR MODIFYING THE BROUGHT FORWA RD LOSSES PERTAINING TO THE ASSESSMENT YEAR 2008-09 AND TO BE CARRIED FO RWARD AS THERE WAS LOSS FOR THE YEAR UNDER CONSIDERATION ALSO. THE AO THEN PASSED THE ORDER DATED 07.03.2017 WHEREBY THE LOSSES TO BE CAR RIED FORWARD WERE MODIFIED TO RS. 4,13,31,557/- AS AGAINST RS. 5,43,3 4,290/- IN THE ORIGINAL ASSESSMENT. THE ASSESSEE CHALLENGED THE SA ID ORDER OF THE AO PASSED U/S 154 OF THE ACT BEFORE THE LD. CIT(A) BUT THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING THA T THE ORDER PASSED BY THE AO IS VALID IN ACCORDANCE WITH THE PROVISION S OF LAW. 3. IN THE WRITTEN SUBMISSIONS THE ASSESSEE CHALLENG ED THE ORDER PASSED U/S 154 OF THE ACT ON THE GROUND OF LIMITATI ON AND CONTENDED THAT THE LIMITATION FOR RECTIFICATION CARRIED OUT U /S 154 OF THE ACT RECKONS ITA NO. 832/JP/2018 M/S THE AJMER URBAN COOPERATIVE BANK LTD. VS. DCIT 4 FROM THE ORIGINAL ORDER U/S 143(3) OF THE ACT ON 29 .11.2011 AND THEREFORE THE ORDER PASSED BY THE AO U/S 154 OF THE ACT ON 03.04.2018 IS BARRED BY LIMITATION AND LIABLE TO BE QUASHED AS A LEGAL. 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE IMPUGNED ORDER WAS PASSED BY THE AO IN ORDER TO GIVE EFFECT TO THE REASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2008-09. THERE FORE, THE SAID ORDER CANNOT BE HELD TO BE ILLEGAL AS IT IS ONLY A CONSEQUENTIAL ORDER REQUIRED TO BE PASSED BY THE AO. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FUL PERUSAL OF THE RECORD WE FIND THAT THE IMPUGNED ORDER PASSED U /S 154 OF THE ACT BY THE AO IS ONLY A CONSEQUENTIAL GIVING EFFECT ORD ER TO THE REASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2 008-09 WHEREBY THE LOSS OF RS. 8,22,49,560/- AS DETERMINED IN THE ORIGINAL ASSESSMENT COMPLETED U/S 143(3) OF THE ACT WAS REDUCED TO RS. 5,28,05,175/-. THEREFORE, THERE WAS REDUCTION IN THE CARRY FORWARD OF THE LOSSES FOR THE ASSESSMENT YEAR 2008-09 AND CONSEQUENTLY BROUGHT FO RWARD LOSSES TO BE CONSIDERED FOR THE YEAR UNDER CONSIDERATION WAS ALSO GOT CHANGED FROM RS. 8,22,49,560/- TO RS. 5,28,05,175/-. IT IS PERTINENT TO NOTE THAT THE ORDER PASSED BY THE AO U/S 154 OF THE ACT IS NO T IN THE NATURE OF ITA NO. 832/JP/2018 M/S THE AJMER URBAN COOPERATIVE BANK LTD. VS. DCIT 5 TAKING ANY DECISION OR CHANGING ANY TAX LIABILITY O F THE ASSESSES. BUT IT IS ONLY A CONSEQUENTIAL EFFECT TO BE GIVEN BY THE AO O F THE REASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2008-09. SINCE , THE ASSESSEE HAS REPORTED LOSS FOR THE YEAR UNDER CONSIDERATION AND THE ASSESSMENT COMPLETED BY THE AO FOR THE YEAR UNDER CONSIDERATIO N IS ALSO AT LOSS THEREFORE, THERE WILL BE NO CHANGED IN THE TAX LIAB ILITY OF THE ASSESSEE. IN ANY CASE THE CARRY FORWARD OF LOSSES FOR THE ASS ESSMENT YEAR 2008- 09 ARE TO BE CONSIDERED ONLY IN THE YEAR WHEN THE A SSESSEE REPORTS POSITIVE INCOME AND THE SAID LOSS BROUGHT FORWARD F ROM THE EARLIER YEARS IS CLAIMED TO BE SET OFF AGAINST THE PROFIT OF THE YEAR IN FUTURE. ACCORDINGLY, WE DO NOT FIND ANY SUBSTANCE OR MERITS IN THE OBJECTION RAISED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER P ASSED U/S 154 OF THE AC BY THE AO. THE LD. CIT(A) HAS CONSIDERED THI S ISSUED IN PARA 4.2 IS AS UNDER:- 4.2 I HAVE GONE THROUGH THE ORDER, STATEMENT OF FA CTS, GROUNDS OF APPEAL AND WRITTEN SUBMISSIONS CAREFULLY. IT IS SEEN THAT THE APPEAL HAS BEEN FILED BY THE APPELLANT AGAINST THE ORDER DATED 07.03.2017 PASSED U/S 154, RECTIFYING THE ORDER DAT ED 30.12.2014 PASSED U/S 143(3) R.W.S. 263. WHILE MAKI NG THE ASSESSMENT ORDER DATED 30.12.2014, THE AO DID NOT T AKE INTO CONSIDERATION THE REASSESSED LOSS OF RS. 5,28,02,17 5/- FOR A.Y. 2008-09 AS PER THE REASSESSMENT COMPLETED ON 30.03. 2012. THE AO HAS RECTIFIED THE ORDER DATED 30.12.2014 TO WITH DRAW THE EXCESS CLAIM OF THE LOSS OF RS. 1,30,02,733/- ALLOW ED BY THE AO ITA NO. 832/JP/2018 M/S THE AJMER URBAN COOPERATIVE BANK LTD. VS. DCIT 6 FOR A.Y. 2008-09 WHILE COMPLETING THE ASSESSMENT OF THE A.Y. 2009-10 VIDE ORDER DATED 30.12.2014. I AM OF THE C ONSIDERED VIEW THAT SET OFF OF EXCESS BROUGHT FORWARD LOSS OF RS. 1,30,02,733/- OF A.Y. 2008-09 WHILE COMPLETING THE ASSESSMENT OF A.Y. 2009.10, IS MISTAKE APPARENT FROM RECORD. T HEREFORE, ORDER DATED 07.03.2017 PASSED BY THE AO U/S 154 REC TIFYING THE ORDER DATED 30.12.2014 OF A.Y. 2009-10 BY WITHDRAWI NG THE EXCESS SET-OFF OF BROUGHT FORWARD LOSS OF RS. 1,30, 02,733/- PERTAINING TO A.Y. 2008-09 IS HELD TO BE VALID AND IN ACCORDANCE WITH THE PROVISIONS OF LAW. THUS IT IS NOTHING BUT JUST TO PASS A CONSEQUENTIA L ORDER IN PURSUANT TO A REASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2008-0 9 AND THEREBY REDUCED THE LOSS FOR THE SAID YEAR WHICH WAS TO BE CARRIED FORWARD AND TO BE TAKEN AS BROUGHT FORWARD LOSSES NOT CLAIM AS SET OFF DUE TO THE LOSSES REPORTED FOR THE YEAR UNDER CONSIDERATION. A CCORDINGLY, THE APPEAL OF THE ASSESSEE HAS NO MERITS AND DESERVES T O BE DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/08/2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09/08/2019. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: ITA NO. 832/JP/2018 M/S THE AJMER URBAN COOPERATIVE BANK LTD. VS. DCIT 7 1. VIHYKFKHZ@ THE APPELLANT- M/S THE AJMER URBAN COOPERATIVE BANK LTD., AJMER. 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CIRCLE-1, AJMER. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 832/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR.