M/S.PUNALUR SERVICE CO-OPERATIVE BANK LTD.,KOLLAM V. INCOME TAX OFFICER, WARD 2 , KOLLAM

SA 177/COCH/2023

AI Insights

The case involves Punalur Service Co-operative Bank Limited appealing against a penalty of Rs. 10,24,792 imposed under section 271(1)(c) of the Income-tax Act, 1961, related to a disallowance of deduction under section 80P amounting to Rs. 33,26,482 for the assessment year 2015-2016. Initially, the CIT(A) had reversed the disallowance, but following a departmental appeal and a subsequent Supreme Court decision in Mavilayi Service Cooperative Bank Ltd. vs. CIT, which reversed the High Court's decision that supported the CIT(A)'s rectification, the CIT(A) recalled his earlier order. This led to the imposition of the penalty, which the Tribunal found to be incorrectly applied, leading to the allowance of the Bank's appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471690 (ITAT-COCHIN)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Others
• Pronouncement Date: 07-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 14-11-2023
• Other Referred Cases: Pr. CIT vs. Mavilayi Service Cooperative Bank Ltd., Mavilayi Service Cooperative Bank Ltd. vs. CIT, CIT vs. Reliance Petro Products
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V.SWARNALATHA
• Keywords: Application of stay; Deduction Disallowance

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No.784/Coch/2023 ALONG WITH SA No.177/Coch/2023 – Assessment Year - 2015-2016 Punalur Service Co-operative Bank Limited, Office Building Punalur Post Kollam – 691 305. PAN : AAGAS6534C. vs. The Income Tax Officer Ward 2 Kollam. (Appellant/Applicant) (Respondent) Appellant/Applicant by : Sri.Santhosh P.Abraham Respondent by : Smt.V.Swarnalatha, Sr.DR Date of Hearing : 23.08.2024 Date of Pronouncement : 07.11.2024 O R D E R PER BENCH : This assessee’s appeal ITA.No.784/Coch/2023 (along with it’s stay application SA.No.177/Coch/2023 therein) for assessment year 2015-2016 arises out of the order of the CIT(A)/NFAC’s DIN & Order No.ITBA/NFAC/S/ 250/2023-24/1054618457(1) dated 26.07.2023 in proceedings u/s.143(1) of the Income-tax Act, 1961; in short “the Act” hereinafter, respectively. ITA No.784 & SA No.177/Coch/2023. M/s.Punalur SCB Limited. 2 Heard both the parties. Case file perused. 2. We come to the assessee’s appeal ITA.No.784/Coch/ 2023 along with it’s stay application SA.No.177/Coch/2023 therein for the former assessment year 2015-2016 challenging both the learned lower authorities action imposing sec.271(1)(c) penalty of Rs.10,24,792/- pertaining to it’s sec.80P deduction disallowance of rs.33,26,482/-. A perusal of the instant appeal file indicates that the same pertains to interest received from cooperative banks and similar other institutions as well as state treasury. The Assessing Officer had framed his sec.143(3) assessment on 15.12.2017 disallowing the assessee’s aforesaid deduction claim. The assessee preferred it’s quantum lower appeal before the CIT(A), who, in his order reversed the said disallowance. 3. We are informed during the course of hearing as per the assessee’s pleadings that in the meantime, hon’ble jurisdictional high court’s decision in case of Pr. CIT vs. Mavilayi Service Cooperative Bank Ltd., [2019] 414 ITR 67 (Ker.) came to be pronounced in department’s favour. This made the learned CIT(A) to invoke his sec.154 rectification ITA No.784 & SA No.177/Coch/2023. M/s.Punalur SCB Limited. 3 jurisdiction to recall his foregoing order allowing the assessee’s appeal. There is hardly any dispute between the parties that it is in consequence to the said rectification that the assessee has been held to have furnished it’s inaccurate particulars of income thereby inviting sec.271(1)(c) penalty under challenge. 4. We have given our thoughtful consideration to the vehement rival stands against and in support of the impugned penalty. There would be hardly any dispute between the parties qua the clinching fact that hon’ble apex court’s recent landmark decision in Mavilayi Service Cooperative Bank Ltd., vs. CIT [2021] 431 ITR 1 (SC) has already reversed the hon’ble jurisdictional high court’s decision forming the basis of the CIT(A)’s rectification withdrawing the relief granted to the taxpayer u/sec.80P of the Act. This is indeed apart from the fact that we find that case law CIT vs., Reliance Petro Products [2010] 322 ITR 158 (SC) would also apply herein as it is only an instance of a quantum disallowance simplicitor than that of furnishing of inaccurate particulars. We thus accept the assessee’s instant penalty appeal on both these counts. Ordered accordingly. ITA No.784 & SA No.177/Coch/2023. M/s.Punalur SCB Limited. 4 5. Delay of 51 days in filing the instant appeal is condoned as per assessee’s solemn averments in light of Collector, Land Acquisition vs., MST Katiji [1987] 167 ITR 471 (SC) having settled the law long back that all such technical aspects must make a way for the cause of substantial justice. 6. This assessee’s appeal is allowed in above terms and the stay application SA.No.177/Coch./2023 of the assessee dismissed as stand rendered academic. A copy of this common order be placed in the respective case files. Order pronounced in the open court on this 7th day of November, 2024. Sd/- (AMARJIT SINGH) Sd/- (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin ; Dated : 7th November, 2024. VBP/- Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT Concerned. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "