M/s Vidisha Bhopal Kshetriya Gramin Bank, Bhopal V. ITO, Vidisha

ITA 860/Ind/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4612 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 26-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Question of law
• Section: 80P; 32; 12

Judgement Text

ITA NOS.859 AND 860 OF 2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, HONBLE J .M. AND SHRI MANISH BORAD, HONBLE A.M. I.T.A.NO S . 859 & 860 /IND/20 17 A.Y S . : 20 12 - 13 & 2013 - 14 M/S. VIDISHA BHOPAL KSHETRIYA GRAMIN BANK (NOW MERGED WITH CENTRAL MADHYA PRADESH GRAMIN BANK, ACIT, 4(1), BHOPAL VS. BHOPAL. APPELLANT RESPONDENT PAN NO. AAACV 5199 E APPELLANT BY : SHRI SUMIT KHABYA, CA RESPONDENT BY : SHRI RAJEEB JAIN, SR. DR DATE OF HEARING : 05 . 2 .201 9 DATE OF PRONOUNCEMENT : 06 . 2 .201 9 O R D E R PER SHRI KUL BHARAT, J.M. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AGAINS T THE DIFFERENT ORDERS OF LD. CIT(A)-2, BHOPAL, DATED 22.09.2017 FO R THE ASSESSMENT YEARS 2012-13 & 2013-14, RESPECTIVELY. ITA NO.859/IND/2017 (A.Y. 2012-13) 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NOS.859 AND 860 OF 2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 2 1. THAT THE LD. CIT(A) ERRED IN MAINTAINING DISALL OWANCE OF RS.5,84,76,896/- CLAIMED AS DEDUCTION U/S 80P OF TH E INCOME TAX ACT, 1961. 2. THAT THE LD. CIT(A) ERRED IN NOT ACCEPTING THAT BY VIRTUE OF SECTION 32 OF THE REGIONAL RURAL BANK ACT, 1976, SE CTION 22 OF RRB ACT HAS OVERRIDING EFFECT ON ANY PROVISION O F INCOME TAX ACT, RULE, CIRCULAR ETC AND A REGIONAL R URAL BANK SHALL BE DEEMED TO BE A COOPERATIVE SOCIETY AND SINCE IT IS CARRYING ON BUSINESS OF BANKING, BENEFI T OF SECTION 80P REMAINED IN FORCE? 3. THAT THE LD. CIT(A) ERRED IN NOT ACCEPTING THAT PROVISIONS OF PART V OF BANKING REGULATION ACT ARE NOT APPLICABLE TO THE APPELLANT BANK SINCE THE APPELLANT BANK IS NOT COVE RED UNDER THE DEFINITION OF COOPERATIVE BANKS AS DEFINED IN PART V OF BANKING REGULATION ACT IN AS MUCH AS THE PROVISIONS OF SECTION 80(P)(4) EXCLUDING THE BENEFIT OF SECTION 8 0(P) TO ONLY TO CERTAIN COOPERATIVE BANK AND IS NOT APPLICA BLE TO THE APPELLANTS CASE AND THE APPELLANT BANK IS ENTITLED TO CLAIM BENEFIT OF SECTION 80P SINCE THE EXCLUSION IN THE E XPLANATION IS SPECIFIC AND APPLIED ONLY TO A COOPERATIVE BANK AND IS THEREFORE TO BE CONSTRUED STRICTLY? 3. FACTS, IN BRIEF, ARE THAT THE ASSESSEE FILED RET URN OF INCOME DECLARING TOTAL INCOME AT RS. NIL. THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80P OF THE I.T. ACT. HOWEVER, THE ASSESSING OFF ICER NOTED THAT THE ASSESSEE IS A REGIONAL BANK AND AS PER THE CIRCULAR 6/2010 OF CBDT DATED 20.9.2010, SECTION 80P OF THE ACT WAS AMENDED W.E.F. 01.4.2007 ITA NOS.859 AND 860 OF 2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 3 INTRODUCING SUB-SECTION (4) WHICH LAID DOWN SPECIFI CALLY THAT DEDUCTION U/S 80P WAS NO MORE AVAILABLE TO ANY REGIONAL RURAL BANK FROM A.Y. 2007-08 ONWARDS. FURTHERMORE, THE CIRCULAR NO.319 D ATED 11.1.1982 DEEMING ANY REGIONAL RURAL BANK TO BE COOPERATIVE S OCIETY WAS ALSO WITHDRAWN BY THE CBDT W.E.F. A.Y. 2007-08 ONWARDS. FOLLOWING THE CIRCULARS, THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80P OF THE ACT WAS HELD AS INADMISSIBLE BY THE ASSESSING OFFICER. 4. THE MATTER WAS CARRIED TO LD. CIT(A) AND THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE FOLLOWING THE DECISION O F THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2007-0 8 & 2008-09. 5. THE LD. AUTHORIZED REPRESENTATIVE HAS FILED A DE CLARATION IN FORM NO.8 UNDER THE PROVISIONS OF SECTION 158A(1) OF THE INCOME-TAX ACT, 1961, TO AVOID THE REPETITIVE APPEAL ON THE GROUND THAT THE SUBSTANTIAL QUESTION OF LAW IS ALREADY ADMITTED BY THE HON'BLE HIGH COURT IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 . THEREFORE, FORM NO.8 MAY BE ACCEPTED AND THE MATTER MAY BE RESTORED TO THE AO. 6. LD. SENIOR D.R. DID NOT RAISE ANY OBJECTION IN T HIS REGARD. 7. LOOKING TO THE ABOVE FACTS, WE ACCEPT THE FORM N O.8 (COPY FILED) AND ACCORDINGLY, THE APPEAL OF THE ASSESSEE DESERVE S TO BE RESTORED TO THE FILE OF AO AND THE AO IS DIRECTED TO TAKE THE D ECISION AS PER ITA NOS.859 AND 860 OF 2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 4 OUTCOME OF THE APPEAL IN CASE OF ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR 2007-08, WHICH IS PENDING BEFORE TH E HON'BLE M.P.HIGH COURT IN MAIT 212/2012. 8. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES ONLY. ITA NO.860/IND/2017 (A.Y. 2013-14) 9. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) ERRED IN MAINTAINING DISALL OWANCE OF RS.4,08,43,770/- CLAIMED AS DEDUCTION U/S 80P OF TH E INCOME TAX ACT, 1961. 2. THAT THE LD. CIT(A) ERRED IN NOT ACCEPTING THAT BY VIRTUE OF SECTION 32 OF THE REGIONAL RURAL BANK ACT, 1976, SE CTION 22 OF RRB ACT HAS OVERRIDING EFFECT ON ANY PROVISION O F INCOME TAX ACT, RULE, CIRCULAR ETC AND A REGIONAL R URAL BANK SHALL BE DEEMED TO BE A COOPERATIVE SOCIETY AND SINCE IT IS CARRYING ON BUSINESS OF BANKING, BENEFI T OF SECTION 80P REMAINED IN FORCE? 3. THAT THE LD. CIT(A) ERRED IN NOT ACCEPTING THAT PROVISIONS OF PART V OF BANKING REGULATION ACT ARE NOT APPLICABLE TO THE APPELLANT BANK SINCE THE APPELLANT BANK IS NOT COVE RED UNDER THE DEFINITION OF COOPERATIVE BANKS AS DEFINED IN PART V OF BANKING REGULATION ACT IN AS MUCH AS THE PROVISIONS OF SECTION 80(P)(4) EXCLUDING THE BENEFIT OF SECTION 8 0(P) TO ONLY TO CERTAIN COOPERATIVE BANK AND IS NOT APPLICA BLE TO THE ITA NOS.859 AND 860 OF 2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 5 APPELLANTS CASE AND THE APPELLANT BANK IS ENTITLED TO CLAIM BENEFIT OF SECTION 80P SINCE THE EXCLUSION IN THE E XPLANATION IS SPECIFIC AND APPLIED ONLY TO A COOPERATIVE BANK AND IS THEREFORE TO BE CONSTRUED STRICTLY? 4. THAT THE LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS.32,23,269/- MADE BY THE ASSESSING OFFICER BY DISALLOWING CLAIM OF OTHER EXPENDITURE DULY DEBIT ED IN PROFIT AND LOSS ACCOUNT. 10. SO FAR AS GROUND NOS. 1 TO 3 ARE CONCERNED, BOT H THE PARTIES SUBMITTED THAT FACTS AND ISSUE ARE IDENTICAL TO THE APPEAL FOR THE ASSESSMENT YEAR 2012-13 ABOVE AND THE DECISION TAKE N FOR THE ASSESSMENT YEAR 2012-13 WILL BE APPLICABLE TO THE A PPEAL FOR THE ASSESSMENT YEAR 2013-14 TOO. THEREFORE, FOLLOWING T HE SAME, WE ACCEPT THE FORM NO.8 (COPY FILED) AND ACCORDINGLY, THE APPEAL OF THE ASSESSEE DESERVES TO BE RESTORED TO THE FILE OF AO AND THE AO IS DIRECTED TO TAKE THE DECISION AS PER OUTCOME OF THE APPEAL IN CASE OF ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 , WHICH IS PENDING BEFORE THE HON'BLE M.P.HIGH COURT IN MAIT 212/2012. THUS, GROUND NOS.1 TO 3 ARE ALLOWED FOR STATISTICAL PURPOSES ONL Y. 11. SO FAR AS GROUND NO.4 WITH REGARD TO DISALLOWAN CE OF RS.32,23,269/- IS CONCERNED, THE LEARNED COUNSEL FO R THE ASSESSEE CONTENDED THAT UNDER SCHEDULE 16 OF THE AUDITED ACC OUNTS PERTAINING ITA NOS.859 AND 860 OF 2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 6 TO OPERATING EXPENSES, OTHER EXPENDITURES OF RS.3 2,23,269/- WAS GIVEN. HOWEVER, DURING THE TIME OF FILING OF DETAIL S OF OTHER EXPENDITURES, A BLANK PROFORMA WAS SUBMITTED AT TH E TIME OF THE ASSESSMENT PROCEEDINGS. THE EXPLANATION WAS THAT TH IS BANK HAD BEEN TAKEN OVER BY THE CENTRAL BANK DURING THIS FY AND T HE AUDITED ACCOUNTS WERE PREPARED BY THE SUCCESSOR BANK AND NO DETAILS OF THIS EXPENDITURE WERE FILLED BY THE SUCCESSOR BANK IN THE PROFORMA. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS EXPEND ITURE COMPRISED OF EXPENDITURE RELATED TO DIFFERENT ITEMS SUCH AS, ENT ERTAINMENT EXPENSES, NEWS PAPER EXPENSES, TRAVELLING ALLOWANCE AND OTHERS OF SEVEN BRANCHES OF THE BANK FOR THE ASSESSMENT YEAR 2012-13 PERTAINING TO THE PERIOD 01.4.2012 TO 08.10.2012. AFTER 08.10. 2012, THE BANK WAS TAKEN OVER BY THE CENTRAL BANK OF INDIA. THE ASSESS ING OFFICER HAS NOT DISBELIEVED THE AUDITED ACCOUNTS WHEREIN OTHER EXP ENSES AMOUNTING TO RS.32,23,269/- HAVE BEEN DULY REFLECTED. THE ASS ESSING OFFICER DID NOT CALL FOR ANY EXPLANATION ON THIS POINT TO EXPLA IN THE ALLEGED DISCREPANCY. FURTHER, LEARNED COUNSEL FOR THE ASSES SEE CONTENDED THAT THE TOTAL EXPENDITURE INCURRED DURING THE YEAR COMP ARES WELL WITH THE EXPENDITURE INCURRED UNDER THIS HEAD IN PREVIOUS YE AR WHERE THE SAME HAVE BEEN ACCEPTED. THE ASSESSEE HAD ENCLOSED FULL DETAILS OF ALL SUCH EXPENSES WHICH REMAINED TO BE EXAMINED IN PROPER PE RSPECTIVE. ON ITA NOS.859 AND 860 OF 2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 7 THE OTHER HAND, LD. SR. DR RELIED UPON THE ORDERS O F THE REVENUE AUTHORITIES. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE FIND THAT LEARNED COUNSEL FOR THE ASSESSEE HAS CLAIMED THAT THE ASSES SING OFFICER HAS NOT DISBELIEVED THE AUDITED ACCOUNTS WHEREIN OTHER EXP ENSES AMOUNTING TO RS.32,23,269/- HAVE BEEN DULY REFLECTED AND THE ASSESSING OFFICER DID NOT CALL FOR ANY EXPLANATION ON THIS POINT TO E XPLAIN THE ALLEGED DISCREPANCY. FURTHER, LEARNED COUNSEL FOR THE ASSES SEE ALSO CONTENDED THAT THE TOTAL EXPENDITURE INCURRED DURING THE YEAR COMPARES WELL WITH THE EXPENDITURE INCURRED UNDER THIS HEAD IN PREVIOU S YEAR WHERE THE SAME HAVE BEEN ACCEPTED. THE ASSESSEE HAD ENCLOSED FULL DETAILS OF ALL SUCH EXPENSES WHICH REMAINED TO BE EXAMINED IN PROP ER PERSPECTIVE. TOTALITY OF THE FACTS CLEARLY INDICATES THAT THIS I SSUE REQUIRES RECONSIDERATION AT THE LEVEL OF THE ASSESSING OFFIC ER WHO WILL VERIFY THE DETAILS SUBMITTED BY THE ASSESSEE IN THE LIGHT OF T HE SUBMISSION OF THE ASSESSEE AND DECIDE THE ISSUE AFRESH. THE ASSESSEE WILL BE GIVEN PROPER OPPORTUNITY OF BEING HEARD AND THE ASSESSEE IS ALSO DIRECTED TO COOPERATE IN THIS REGARD BEFORE THE ASSESSING OFFIC ER. ACCORDINGLY, THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE ARE SET ASIDE AND THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFI CER. THUS, THIS GROUND ITA NOS.859 AND 860 OF 2017 VIDISHA BHOPAL KSHETRIYA GRAMIN BANK 8 OF THE APPEAL OF THE ASSESSEE IS ALSO ALLOWED FOR S TATISTICAL PURPOSES ONLY. 13. FINALLY, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 06.2.2019. SD/ - (MANISH BORAD) ACCOUNTANT MEMBER SD/ - ( KUL BHARAT) JUDICIAL MEMBER DATED : 06.2.2019 !VYAS! COPY TO: APPELLANT/RESPONDENT/PR.CIT(A)/PR.CIT/DR, INDORE