ACIT, CHENNAI V. Indian Overseas Bank, CHENNAI

MA 33/CHNY/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3174 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 10-07-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 20-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Application of stay
• Section: 143(3); 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , ! # % & , ' ! ( BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER MISCELLANEOUS PETITIO N NO.33/ MDS/2015 (IN S.P NO.135/MDS/2015 IN ITA.NO.497/MDS/2015 ) (ASSESSMENT YEAR: 2011-12) ASSISTANT COMMISSIONER OF INCOME TAX, LTU-I CHENNAI. VS. M/S. INDIAN OVERSEAS BANK 763, ANNA SALAI, CHENNAI-600 002. PAN: AAACI1223J ( PETITIONER ) RESPONDENT) APPLICANT BY : MR. GURU BASHYAM, JCIT RESPONDENT BY : MR. R.VIJAYARAGHAVAN, ADVOCATE & MR. C.NARESH, C.A. / DATE OF HEARING : 10 TH JULY, 2015 / DATE OF PRONOUNCEMENT : 24 TH JULY, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: BY THIS MISCELLANEOUS PETITION, THE REVENUE PRAYS F OR SETTING ASIDE THE STAY ORDER OF THIS TRIBUNAL DATED 13.03.2015 STATING THAT THERE IS A MISTAKE APPARENT ON RECORD IN S.P.NO.135/MDS/2015 DATED 13.03.2015 IN HOLDING TH AT PRIMA-FACIE THE ASSESSEE HAS A CASE ON MERITS AND G RANTING STAY OF DEMAND BY THE ORDER. M.P.NO.33/MDS/2015 2 2. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE TRI BUNAL ERRED IN COMING TO THE CONCLUSION THAT ASSESSEE IS HAVING PRIMA-FACIE CASE ON MERITS AND THEREFORE, THE MISCE LLANEOUS PETITION IS MOVED. DEPARTMENTAL REPRESENTATIVE SUBM ITS THAT TRIBUNAL WAS OF THE OPINION THAT THE ISSUE REGARDIN G DEDUCTION UNDER SECTION 36(1)(VIIA) WAS THE SUBJECT MATTER O F APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND THEREFORE, COMMISSIONER OF INCOME TAX HAS EXCEEDED HIS JURISDICTION BY INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT IN REWORKING THE DEDUCTION UNDER SECTION 36(1)(VIIA ). THEREFORE, HE SUBMITS THAT THERE IS A MISTAKE APPAR ENT ON RECORD IN COMING TO THE CONCLUSION THAT COMMISSIONE R OF INCOME TAX HAS EXCEEDED HIS JURISDICTION UNDER SECT ION 263 WHICH RESULTED IN GRANTING OF STAY. THEREFORE, HE P RAYS FOR SETTING ASIDE THE ORDER OF THE TRIBUNAL IN S.P.NO.135/MDS/2015 DATED 13.03.2015. 3. COUNSEL FOR THE ASSESSEE SUBMITS THAT THERE IS N O MISTAKE APPARENT ON RECORD IN COMING TO THE CONCLUS ION THAT PRIMA-FACIE ASSESSEE HAS A CASE INASMUCH AS THE ISS UE M.P.NO.33/MDS/2015 3 BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WAS AGAINST THE CLAIM FOR DEDUCTION UNDER SECTION 36(1) (VIIA) AND THEREFORE, PROVISION IS THE SUBJECT MATTER OF APPEA L BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIO NER OF INCOME TAX EXCEEDED HIS JURISDICTION IN PASSING ORDER UNDER SECTION 263 OF THE ACT RESTRICTING THE DEDUCT ION ONCE AGAIN WHICH WAS THE SUBJECT MATTER OF APPEAL BEFO RE COMMISSIONER OF INCOME TAX (APPEALS). THEREFORE, HE SUBMITS THAT THERE IS NO MISTAKE APPARENT ON RECORD IN THE STAY ORDER OF THIS TRIBUNAL. 4. HEARD BOTH SIDES. PERUSED ORDER OF THIS TRIBUNAL DATED 13.03.2015 AND THE PETITION FILED FOR SETTING ASIDE THE STAY ORDER. THIS TRIBUNAL WHILE GRANTING STAY TO THE ASS ESSEE CONSIDERED BOTH SUBMISSIONS OF THE ASSESSEE AS WELL AS REVENUE AND HELD AS UNDER:- 2. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE DEMAND AROSE ON ACCOUNT OF PASSING ORDER BY THE ASSESSING OFFICER GIVING EFFECT TO THE ORDER OF COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263 OF THE ACT. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE IS PRAYING FOR STAY OF OPERATION OF THE OR DER M.P.NO.33/MDS/2015 4 PASSED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT AS WELL AS CONSEQUENTIAL DEM AND OF ` 305,62,90,640/- RAISED BY THE REVENUE. COUNSEL F OR THE ASSESSEE SUBMITS THAT IN ITS CASE DEDUCTION UND ER SECTION 36(1)(VIIA) WAS CLAIMED BY THE ASSESSEE AT ` 1089 CRORES IN THE RETURN OF INCOME FILED. COUNSE L FOR THE ASSESSEE SUBMITS THAT SECTION 36(1)(VIIA) PROVI DES FOR DEDUCTION OF PROVISO MADE FOR BAD AND DOUBTFUL DEBT S NOT EXCEEDING AGGREGATE OF 7.5% OF PROFITS AND 10% OF ADVANCE OF RURAL BRANCHES. THUS, ASSESSEE CLAIMING DEDUCTION OF ` 1089 CRORES UNDER SECTION 36(1)(VIIA) OF THE ACT. WHILE COMPLETING ASSESSMENT UNDER SECTION 143(3) OF THE ACT THE CLAIM UNDER SECTION 36(1)(VII A) WAS EXAMINED BY THE ASSESSING OFFICER AND RESTRICTED TH E SAME TO ` 250.55 CRORES. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE PREFERRED AN APPEAL BEFORE TH E COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) EXAMINED THE ISSUE OF ALLOWANCE OF DEDUCTION UNDER SECTION 36(1) (VIIA) AND GAVE CERTAIN DIRECTIONS TO THE ASSESSING OFFICE R. THE ASSESSING OFFICER PASSED ORDER GIVING EFFECT TO THE COMMISSIONER OF INCOME TAX (APPEALS)S ORDER ALLOW ING THE CLAIM OF THE ASSESSEE UNDER SECTION 36(1)(VIIA) OF ` 1006.08 CRORES. COUNSEL SUBMITS THAT NOW THE COMMISSIONER OF INCOME TAX PASSED ORDER UNDER SECTI ON 263 OF THE ACT RESTRICTING THE DEDUCTION UNDER SECT ION 36(1)(VIIA) TO PROVISO MADE IN RESPECT OF RURAL ADVANCES I.E. ` 102 CRORES AND DIRECTED THAT ` 903.64 CRORES IS TO BE DISALLOWED. COUNSEL FOR THE ASSESSEE SUBMITS T HAT AS THE DEDUCTION UNDER SECTION 36(1)(VIIA) WAS SUBJE CT MATTER OF DISPUTE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSMENT ORDER ON THIS ISSUE MERGED WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND IS NOT AMENABLE TO REVISION UNDER SECTION 263 OF THE ACT. HE SUBMITS THAT COMMISSIONE R OF INCOME TAX HAS REVISED ORIGINAL ASSESSMENT ORDER A S WELL AS ORDER GIVING EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS NOT PERMISSIBLE. THEREFORE, HE PLEADS FOR STAY OF OUTST ANDING DEMAND TILL THE DISPOSAL OF APPEAL BY THE TRIBUNAL. 3. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY OPPOSED FOR GRANTING OF STAY. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THERE IS NO HARDSHIP FO R SCHEDULED COMMERCIAL BANK FOR PAYMENT OF DEMAND OUTSTANDING. HOWEVER, HE SUBMITS THAT TAKING INTO M.P.NO.33/MDS/2015 5 CONSIDERATION PENDENCY OF APPEAL, THE TRIBUNAL MAY DIRECT THE ASSESSEE TO PAY AT LEAST 50% OF THE OUTSTANDING DEMAND. 4. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHORITIES AND THE MATERIALS PLACED BEFORE US. ON GOING THROUGH THE ORDERS OF LOWER AUTHORITIES, WE FIND FO RCE IN THE SUBMISSIONS OF THE ASSESSEE THAT WHEN THE ISSUE OF DEDUCTION UNDER SECTION 36(1)(VIIA) WAS SUBJECT M ATTER OF APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ASSESSMENT ORDER ON THAT ISSUE MERGED WIT H THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) AND COMMISSIONER OF INCOME TAX HAS NO JURISDICTION UNDER SECTION 263 OF THE ACT TO REVISE THE ASSESSME NT ORDER OR THE ORDER PASSED FOR GIVING EFFECT TO THE ORDER COMMISSIONER OF INCOME TAX (APPEALS)S ORDER. PRIM A- FACIE THE ASSESSEE HAS CASE ON MERITS, AS THE COMMISSIONER OF INCOME TAX APPEARS TO HAVE EXCEEDED HIS JURISDICTION IN INVOKING THE PROVISIONS UNDER S ECTION 263 OF THE ACT. IN THE CIRCUMSTANCES, WE GRANT STAY OF RECOVERY OF DEMAND UPTO 180 DAYS OR TILL THE DISPOS AL OF APPEAL WHICHEVER IS EARLIER. THE ASSESSEE IN ITS ST AY PETITION AGREED TO OFFER SECURITY TO THE SATISFACT ION OF THE DEPARTMENT. THEREFORE, IN THE INTEREST OF THE REVEN UE, WE DIRECT THE ASSESSEE TO PROVIDE ADEQUATE SECURITY TO THE SATISFACTION OF THE ASSESSING OFFICER. 5. AS COULD BE SEEN FROM THE ABOVE OBSERVATIONS OF THE TRIBUNAL, WHILE GRANTING STAY TO THE ASSESSEE, THE TRIBUNAL CAME TO THE CONCLUSION THAT THERE IS A PRIMA-FACIE CASE IN FAVOUR OF THE ASSESSEE AS THE COMMISSIONER OF INCOM E TAX APPEARS TO HAVE EXCEEDED HIS JURISDICTION IN INVOKI NG THE PROVISIONS OF SECTION 263 OF THE ACT. WE DO NOT FIN D ANY MISTAKE APPARENT ON RECORD IN HOLDING SO. FURTHER, THE REVENUE HAS NOT POINTED OUT ANY MISTAKE APPARENT ON RECORD M.P.NO.33/MDS/2015 6 IN THE STAY ORDER OF THIS TRIBUNAL. IN THE CIRCUMST ANCES, THE PETITION FILED BY THE REVENUE FOR SETTING ASIDE THE STAY ORDER IS LIABLE TO BE DISMISSED. 6. IN THE RESULT, MISCELLANEOUS PETITION OF THE REV ENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JULY, 2015.. SD/- SD/- ( . ) ( # &' ( ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGEND RA PRASAD ) * / ACCOUNTANT MEMBER &, * / JUDICIAL MEMBER & /CHENNAI, . /DATED, 24 TH JULY, 2015 SOMU (,12 42 /COPY TO: 1. APPLICANT 2. (57 /RESPONDENT 3. 8 () /CIT(A) 4. 8 /CIT 5. 2 (,,; /DR 6. > /GF .