Shiveshwari Nagari Sah. Bank Ltd, Hingoli V. Income-tax Officer, Ward - Hingoli, , Parbhani

ITA 997/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1196 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 04-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Bad and doubtful debts
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.997/PUN/2018 / ASSESSMENT YEAR : 2012-13 SHIVESHWARI NAGARI SAH. BANK LTD., A/348, NAGNATH BUILDING, MAMA CHOWK, BASMAT, DIST. HINGOLI 431512. PAN : AABAS3857P. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD AT HINGOLI, CAMPT AT PARBHANI. . / RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK. REVENUE BY : SHRI RAJESH GAWALI. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 1, AURANGABAD DATED 0 6.03.2018 FOR THE ASSESSMENT YEAR 2012-13. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A CO-OPERATIVE BANK ENGAGED IN THE BANKING BUSINESS. IT ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2012-13 ON 18.09.2012 DECLARING TOTAL INCOME AT RS.29,33,550/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S / DATE OF HEARING : 04.04.2019 / DATE OF PRONOUNCEMENT: 03.06.2019 2 ITA NO.997/PUN/2018 143(3) OF THE ACT VIDE ORDER DT.27.03.2015 AND THE TOTAL INCOME WAS DETERMINED AT RS.32,91,210/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.06 .03.2018 (IN APPEAL NO.ABD/CIT(A)-1/190/2015016) DISMISSED THE APPEAL OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. HONORABLE CIT(A) HAS ERRED IN CONFIRMING THE DI SALLOWANCE OF CLAIM OF DEDUCTION U/S 36(1)(VIIA) OF RS. 2,37,855/- . SA ME MAY PLEASE BE ALLOWED. 2. HONORABLE CIT(A) HAS ERRED IN NOT CONSIDERING TH E SUBMISSION AND EXPLANATION, PARTICULARLY IN THE LAST PARA OF STATE MENT OF FACTS. APPELLANT PRAYS FOR CANCELLATION OF SAID DISALLOWAN CE OF RS. 2.37.855/- 3. COMMISSIONER (APPEALS) HAS ERRED IN OBSERVING TH AT 'APPELLANT CO-OPERATIVE BANK HAS NOT MADE ANY PROVISION FOR BA D AND DOUBTFUL DEBTS IN ITS BOOKS OF ACCOUNTS FOR CLAIMING DEDUCTIO N U/S 36(1)(VIIA). APPELLANT BANK HAS MADE PROVISION FOR RS. 3,50,000/ - UNDER THE HEAD 'NPA PROVISION' THEREFORE, CLAIM OF THE APPELLANT MAY PLEASE BE ALLOWED. 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETH ER. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOT ICED THAT ASSESSEE HAD NOT MADE ANY PROVISION FOR BAD AND DOUBT FUL DEBTS IN THE BOOKS OF ACCOUNTS BUT IN THE COMPUTATION OF INCOME H AD CLAIMED DEDUCTION TO THE TUNE OF RS.2,37,855/- U/S 36(1)(VIIA) OF THE ACT. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE DEDUC TION IN THE COMPUTATION OF INCOME NOT BE DISALLOWED AS NO PROVISION WAS MADE IN THE BOOKS OF ACCOUNTS, TO WHICH THE ASSESSEE MADE SUBM ISSIONS WHICH WERE NOT FOUND ACCEPTABLE TO THE AO. AO NOTED TH AT AS PER PROVISIONS OF SEC.36(1)(VIIA) OF THE ACT, ASSESSEE WILL GET DEDUCT ION FOR PROVISIONS OF BAD AND DOUBTFUL DEBTS ONLY OF THE AMOUNT OF SUCH 3 ITA NO.997/PUN/2018 PROVISION ACTUALLY DEBITED TO THE PROFIT AND LOSS ACCOUN T. HE NOTED THAT SINCE ASSESSEE HAS NOT CREATED ANY PROVISION OF BA D AND DOUBTFUL DEBTS IN THE BOOKS OF ACCOUNTS NO DEDUCTION OF RS.2,37 ,855/- AS CLAIMED IN THE RETURN IS ALLOWABLE U/S 36(1)(VIIA) OF THE ACT. HE ALSO RELIED ON THE INSTRUCTIONS OF CBDT INSTRUCTION NO.17/2008 DATED 26.11.2008. HE THUS DISALLOWED RS.2,37,855/- ON ACCOUNT OF DEDUCTION UNDER SEC.36(1)(VIIA) OF THE ACT AND ALSO DISALLOWED RS.1,00,000/- ON ACCOUNT OF EXCESS PROVISION FOR STANDARD ASSETS AND RS.19,805/- ON ACCOUNT OF REVENUE RECEIPTS. AGGRIEVED WIT H THE DISALLOWANCE OF RS.2,37,855/- U/S 36(1)(VII) OF THE ACT MADE BY THE AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE EX-PARTE ORDER UPHELD THE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US. 5. BEFORE US, LD.A.R. AT THE OUTSET SUBMITTED THAT LD.CIT(A ) HAS PASSED AN EX-PARTE ORDER AND NOT ON MERITS. HE FURTHE R SUBMITTED THAT DUE TO UNAVOIDABLE CIRCUMSTANCES, ASSESSEE COULD N OT APPEAR BEFORE LD.CIT(A) AND FOR NON-APPEARANCE BEFORE LD.CIT(A), REA SONABLE COSTS AS DEEMED FIT MAY BE IMPOSED. HE ALSO UNDERTOOK TH AT IF GIVEN A CHANCE, ASSESSEE SHALL APPEAR BEFORE THE LOWER AUTHORITIES AND FURNISH ALL THE REQUIRED DETAILS TO SUBSTANTIATE ITS CASE. LD.D.R. SERIOUSLY OBJECTED TO THE PRAYER FOR REMITTING THE MATTER BACK T O LD.CIT(A) AND SUBMITTED THAT DESPITE VARIOUS OPPORTUNITIES GIVEN BY AO AND LD.CIT(A), ASSESSEE CHOOSE NOT TO APPEAR BEFORE THE REVE NUE AUTHORITIES. HE SUBMITTED THAT IN CASE THE MATTER IS RES TORED TO THE FILE OF EITHER OF THE REVENUE AUTHORITIES, THEN EXEMPLARY COST SHOULD BE 4 ITA NO.997/PUN/2018 LEVIED ON THE ASSESSEE SO THAT IN FUTURE HE WILL APPEAR BE FORE THE REVENUE AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPEC T TO THE DISALLOWANCE OF RS.2,37,855/- U/S 36(1)(VIIA) OF THE ACT. IN THE PRESENT CASE DUE TO NON-APPEARANCE ON VARIOUS OCCASIO NS, LD.CIT(A) HAS PASSED AN EX-PARTE ORDER DISMISSING THE APPEAL OF AS SESSEE ON THE BASIS OF STATEMENT OF FACTS ENCLOSED WITH FORM NO.35 FILED BY THE ASSESSEE. 7. IT IS A SETTLED LAW THAT LD.CIT(A) HAS NO JURISDICTION TO DISMISS THE APPEAL OF THE ASSESSEE WITHOUT GOING INTO THE MERITS OF THE ISSUE BEFORE HIM. EVEN IN AN EX-PARTE ORDER, THE LD.CIT(A) SHOU LD HAVE DECIDED THE GROUNDS OF APPEAL OF THE ASSESSEE ON MERITS THEREOF. SINCE THERE WAS NON-APPEARANCE BY ASSESSEE BEFORE AO AND LD.CIT(A), WE ARE OF THE VIEW THAT IT CANNOT BE SAID THAT THERE W AS NO NEGLIGENCE ON THE PART OF THE ASSESSEE. HOWEVER, CONSIDERING THE FAC T THAT LD.A.R. HAS GIVEN AN ASSURANCE THAT ASSESSEE WILL CO-OPERATE AN D APPEAR BEFORE LOWER AUTHORITIES AND IN VIEW OF THE WELL SETTLED PRIN CIPLE OF NATURAL JUSTICE THAT SUFFICIENT OPPORTUNITY OF HEARING SHOULD BE AFFORDED TO THE PARTIES AND NO PARTY SHOULD BE CONDEMN ED UNHEARD, WE ARE OF THE VIEW THAT THE ONE FINAL OPPORTUNITY MAY BE GRANTED TO ASSESSEE SUBJECT TO LEVY OF COST OF RS.5,000/-. WE THE REFORE RESTORE THE MATTER BACK TO THE FILE OF LD.CIT(A) TO DECIDE THE ISSU E ON MERITS IN ACCORDANCE WITH LAW SUBJECT TO ASSESSEE DEPOSITING RS.5 ,000/- WITH ARMY WELFARE FUND AND PRODUCING THE CHALLAN BEFORE LD.CIT(A ). 5 ITA NO.997/PUN/2018 SUBJECT TO DEPOSIT OF COSTS, THE APPEAL OF THE ASSESSEE SHALL BE TAKEN UP FOR ADJUDICATION BY THE LD.CIT(A). NEEDLESS TO STATE TH AT LD.CIT(A) SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. ASSESSEE IS ALSO DIRECTED TO PROMPTLY FURNISH ALL THE DETA ILS CALLED FOR BY THE AUTHORITIES. IN VIEW OF OUR DECISION TO RESTORE TH E ISSUE TO LD.CIT(A), WE ARE NOT ADJUDICATING ON MERITS THE GROUNDS OF THE APPEAL RAISED BY THE ASSESSEE. THUS, THE GROUNDS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS AFORESAID. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 3 RD DAY OF JUNE, 2019. SD/- SD/- ( PARTHA SARATHI CHAUDHURY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ' / ACCOUNTANT MEMBER PUNE; DATED : 3 RD JUNE, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A) 1, AURANGABAD. PR. CIT-1, AURANGABAD. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.