DCIT, Circle-1, Salem V. The Salem District Central Co-operative Bank Ltd, Salem

ITA 918/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9364 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATH
• Assessee Lawyers: T VASUDEVAN
• Keywords: Wrong claim; Bad and doubtful debts
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !, # !$ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.918/CHNY/2019 & '& / ASSESSMENT YEAR : 2008-09 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1, NO.3, GANDHI ROAD, SALEM 636 007. V. M/S THE SALEM DT. CENTRAL CO-OP. BANK LTD., NO.65-A, CHERRY ROAD, SALEM 636 001. PAN : AADAT 3382 J ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI S. BHARATH, CIT +,)* - . / RESPONDENT BY : SHRI T. VASUDEVAN, ADVOCATE / - 0# / DATE OF HEARING : 18.11.2019 12' - 0# / DATE OF PRONOUNCEMENT : 03.01.2020 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DATED 07.01.2019 AND PERTAINS TO ASSESSMENT YEAR 2008-09, DELETING THE P ENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN S HORT 'THE ACT'). 2. SHRI S. BHARATH, THE LD. DEPARTMENTAL REPRESENTA TIVE, SUBMITTED THAT IN THE RETURN OF INCOME, THE ASSESSEE HAS MADE PROVISION FOR BAD 2 I.T.A. NO.918/CHNY/19 AND DOUBTFUL DEBTS TO THE EXTENT OF 8,74,58,000/-, HOWEVER, CLAIMED DEDUCTION UNDER SECTION 36(1)(VIIA) OF THE ACT FOR 19,49,35,398/-. APART FROM THAT, ACCORDING TO THE LD. D.R., IN RESPECT OF AVERAGE ADVANCE OF RURAL BRANCHES, 10% OF SUCH ADVANCE IS ADMISSIBLE T O THE EXTENT OF 15,91,57,697/-. HOWEVER, THE ASSESSEE HAS CLAIMED 17,44,41,400/-. THUS, THE ASSESSEE HAS CLAIMED EXCESS DEDUCTION OF 1,52,83,073/-. IN VIEW OF THESE TWO CLAIMS, WHICH IS CONTRARY TO THE PROVISIONS OF INCOME- TAX ACT, ACCORDING TO THE LD. D.R., THE ASSESSING O FFICER FOUND THAT THE ASSESSEE HAS CONCEALED THE INCOME AND FURNISHED INA CCURATE PARTICULARS. SINCE THE DEDUCTION UNDER SECTION 36(1)(VIIA) OF TH E ACT IS PERMISSIBLE ONLY TO THE EXTENT OF PROVISION MADE ALREADY, THE E XCESS CLAIM CANNOT BE ALLOWED. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS FURNISHED INACCURATE PA RTICULARS, HENCE LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HOWEVER, THE CIT(APPEALS) BY PLACING RELIANCE ON THE JUDGMENT OF APEX COURT IN CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (2010) 322 ITR 158 ALLOWED THE CLAIM OF THE ASSESSEE. ACCORDING TO THE LD. D.R., SINCE A WRONG CLAIM WAS MADE IN THE RETURN OF INCOME, THE ASSESSING OFF ICER HAS RIGHTLY LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 3. WE HEARD SHRI T. VASUDEVAN, THE LD.COUNSEL FOR T HE ASSESSEE ALSO. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS F URNISHED ENTIRE DETAILS OF 3 I.T.A. NO.918/CHNY/19 PROVISIONS FOR BAD AND DOUBTFUL DEBTS AND AVERAGE A DVANCE OF RURAL BRANCHES AND ALSO MADE CLAIM UNDER SECTION 36(1)(VI IA) OF THE ACT. THE FIGURES WITH REGARD TO PROVISION MADE FOR BAD AND D OUBTFUL DEBTS IN THE PROFIT & LOSS ACCOUNT AND AVERAGE ADVANCE OF RURAL BRANCHES ARE VERY MUCH AVAILABLE IN THE MATERIAL FILED ALONG WITH THE RETURN OF INCOME. THE ASSESSEE HAS CLAIMED THE STATUTORY DEDUCTION. THE QUESTION ARISES FOR CONSIDERATION IS AFTER FURNISHING ENTIRE DETAILS BE FORE THE ASSESSING OFFICER, WHETHER MAKING THE STATUTORY CLAIM AS PROV IDED UNDER SECTION 36(1)(VIIA) OF THE ACT AMOUNTS TO FURNISHING INACCU RATE PARTICULARS OF INCOME OR CONCEALING ANY PART OF INCOME? THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT AFTER FURNISHING ENTIRE FAC TUAL DETAILS WITH REGARD TO PROVISION FOR BAD AND DOUBTFUL DEBTS AND THE AVE RAGE ADVANCE OF RURAL BRANCHES, MAKING CLAIM UNDER SECTION 36(1)(VIIA) OF THE ACT DOES NOT AMOUNT TO CONCEALING ANY PARTICULARS OF INCOME OR F URNISHING INACCURATE PARTICULARS. THEREFORE, THE CIT(APPEALS) HAS RIGHT LY DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER BY PLACING RELIANCE ON THE JUDGMENT OF APEX COURT IN RELIANCE PETROPRODUCTS (P) LTD. (SUPR A). THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. 4 I.T.A. NO.918/CHNY/19 ORDER PRONOUNCED IN THE COURT ON 3 RD JANUARY, 2020 AT CHENNAI. SD/- SD/- (. !) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 3 RD JANUARY, 2020. KRI. - +056 76'0 /COPY TO: 1. )*/ APPELLANT 2. +,)*/ RESPONDENT 3. / 80 () /CIT(A), SALEM 4. PRINCIPAL CIT, SALEM 5. 69 +0 /DR 6. :& ; /GF.